Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In May 2024, Array Technologies, Inc. (“Array”, Lessee) entered into a triple net lease (“NNN term lease”) with GDC Sunshine, LLC (“GDC”, Lessor) for 13 ½ years (162 months) for a new manufacturing and office facility located in Bernalillo County, New Mexico. Among other things, Array would be responsible for the payment of personal property taxes, if any, and all real property taxes related to the facility and real property that is subject to the NNN term lease. The NNN term lease was contingent upon the closing of the Lessor’s successful financing to construct the facility. On October 16, 2024, the Lessor closed the financing and consequently the lease agreement became effective. The Lessee has an option to renew the lease for an additional ten years.

The new facility that is mixed use and built for general purposes will be approximately 216,000 square feet when constructed, and the NNN term lease commences upon the earliest occurrence of several events, including the Lessor’s completion of the construction of the building, which is currently expected to occur in the fourth quarter of 2025.

Under the construction agreement with GDC, Array also contributed approximately $11.2 million to the construction costs for the facility during October 2024.

In connection with this NNN term lease and the Company’s planned acquisition of machinery and equipment related to the new facility, GDC and the Company entered into a series of transactions with Bernalillo County (the “County”) related to a tax abatement plan. These transactions had no net impact to the consolidated financial statements of the Company. The tax abatement plan provides for the effective elimination of 75% of the real property taxes and 100% of the personal property taxes payable to the County by the Company and GDC during the term of the NNN term lease, and the abatement of 100% of the sales and use taxes that would be incurred by the Company and GDC related to the purchase and use of machinery and equipment.