Detroit City Council delays vote on $60M tax break for Hudson's site project amid pushback

Candice Williams
The Detroit News

Bedrock will have to wait longer for an answer to its request for $60 million in property tax breaks for its Hudson’s site development in downtown Detroit.

Following a lengthy discussion Tuesday that included criticism of the proposed abatement from residents, the Detroit City Council voted 7-1 to delay for one week a vote on the firm’s request for a commercial rehabilitation exemption certificate.  

The People Mover passes between the Hudson's site and the Skillman Branch of the Detroit Public Library along Farmer at Gratiot, Tuesday, June 7, 2022.

Those in favor of delaying a vote on the measure were: Council members Scott Benson, Fred Durhal III, Latisha Johnson, Gabriela Santiago-Romero, Mary Waters, Angela Whitfield-Calloway and Coleman Young II. Detroit City Council President Pro Tem James Tate objected to the postponement. Detroit City Council President Mary Sheffield was absent.

Durhal said that although he supports the tax abatement for the project, he requested that the issue be brought back at a later time to focus on educating residents regarding tax abatements. He said he gets a mix of email responses from the public, positive and negative, regarding the project.

“... So we can get rid of that myth that, for some reason folks think there's a vault of money that you go turn and then they give it to Dan Gilbert or give it to anybody, for that matter,” he said. “It doesn’t work that way. Government does not work that way.”

The decision to delay the vote followed some pushback from residents and at least two council members. More than a dozen commenters from the public spoke against the tax incentives. A few commenters spoke in favor of the measure.

Bedrock officials did not speak during the meeting Tuesday.

In an emailed statement following the meeting, the firm said: “Bedrock understands and supports the Council’s desire to bring the matter back in one week, allowing them time to properly educate their constituents on the importance of the development. Clearly, there is a great deal of misinformation surrounding how the PA210 abatement works. The bottom line is that under the abatement, not a single penny is diverted from city services, schools or libraries. Instead, the only entity impacted is the Downtown Development Authority — nowhere else.”

Johnson said she’s heard misinformation about the project and she’s received questions about how much funding the project has already received.

“I do support bringing this back in a couple of weeks because that is one of the things that I really want to delve into to make sure I understand fully and that I can educate residents of District 4 what this means, the impact that it has and whether or not this is a development project that we should support, recognizing whether or not there's a net gain, a net benefit to Detroiters, the city of Detroit,” she said.

“I look forward to having additional conversations with residents about all of this and that's one of the things that we are planning to do is to have a discussion around tax abatements and the implications of those on Detroit and Detroiters,” Johnson said.

While Whitfield-Calloway also voted to delay the vote, she said Tuesday she was not in favor of the tax abatement. She said it was not needed.

“If we do not grant this tax abatement, I can assure you, the project will go on,” she said. “Mr. Gilbert has more than enough money to complete his project.”

Calloway said council members should listen to Detroiters who are speaking up against Bedrock's request.

“They don't want us to grant this tax abatement to Dan Gilbert and his companies,” she said. “That's what they're saying.”

Among the people to speak against the tax incentive was Theo Pride, a community organizer with Detroit People’s Platform.

“I understand development in Detroit is important,” he said. “Jobs, tax revenue, density, economic growth. All that. But there has to be a balance between the city as a place for profit and the city as a place for people. Development has to be equitable.

"And I get it, it's complex, but we have to do a better job right now because absolutely zero is trickling down to thousands of Detroiters as they are being forced to leave the city or places like Romulus and Taylor to find housing and opportunities that should exist here for Black folks in the largest majority Black city in the country," Pride said. "But that's not what we're doing.

"What we are doing is providing luxury downtown housing to, in many cases, suburban residents," Pride said. "Dan Gilbert don’t need that $60 million. I know he likes it, but he don't need it. Our low-income renters need that $60 million, Black folk losing their homes on Dexter and Linwood need that $60 million, our libraries and our kids need that $60 million and the developers that can't understand that, we should already know what to say to them.”

A few commenters Tuesday spoke in favor of the tax abatement, including Detroit resident Kristin Lusn, a member of the Neighborhood Advisory Council, the group tasked with negotiating with the developer for benefits for the neighborhood.

“The (community benefits ordinance) process was completed to our satisfaction,” she said. “We had a robust discussion. We had many active members and Rocket/ Bedrock has done a great job of satisfying our requirements. We are in support of this project because of all the economic development it will give us in our neighborhood.

"I'm personally also a resident of Detroit and the economic impact outweighs the cost up front to give them the tax abatement," Lusn said. "It contributes to our community and will for generations to come, and it will be a retail and hospitality destination.”

If approved, the tax break would be effective Dec. 31, 2024, and result in savings of $6 million annually for 10 years, officials said. 

Bedrock continues construction on the 1.5 million gross-square-foot development downtown, which has ballooned to a cost of $1.4 billion, up from the $909 million estimate when the developer broke ground on the mixed-use skyscraper project five years ago. While the firm has said the request was not related to the price tag, it says it’s needed to make the development viable.

If the tax incentive is approved and the development is complete, property taxes for the site will be $2.6 million a year, according to the Detroit Economic Growth Corporation. The full taxes without the tax abatement would be more than $8 million. Once the abatement expires in year 11, the developer will begin to pay the full amount of property taxes, estimated at more than $10 million annually, officials said.

According to the city’s Legislative Policy Division, taxing authorities would receive $89 million in benefits during the 10-year period, including property tax, income tax and state revenue sharing.

cwilliams@detroitnews.com

Twitter: @CWilliams_DN