Warren approves tax break for possible $419M GM project

Melissa Burden
The Detroit News

Warren — The Warren City Council unanimously approved a tax abatement Tuesday for its largest taxpayer, General Motors Co., which is considering spending $419.4 million to renovate and expand its sprawling Tech Center.

The council, in a special meeting following a public hearing, approved a 12-year, 50-percent tax abatement, for GM that also includes years for construction.

Senior leaders as early as this week will be briefed on the tax abatement approval, said John Blanchard, GM's director of local government relations. Blanchard called the approval a "critical step in the process."

The project could keep about 3,800 employees and create 2,600 jobs in areas such as engineering, product development and information technology over the next several years, Blanchard said. He said some jobs could be transfers, but many would be new hires.

Warren officials have said if the tax abatement is approved and GM finalizes its plans, the total investment at the Tech Center could be $1 billion.

The proposed $419.4 million project includes modernizing the Tech Center, which dates back to the mid 1950s, with new buildings, renovations and additions and parking decks.

"It would really be an opportunity, if this goes forward, to really bring the Tech Center back into a world-class, leading-edge technical center," Blanchard said.

City officials said they did not have figures on tax savings for GM immediately available. The figure is likely in the millions of dollars. GM declined to comment on potential tax savings.

Many council members spoke in support of the project, saying it will create spin-off jobs and could attract new residents. Council President Cecil St. Pierre said the city and school district will gain more in tax revenue if the project happens.

"This is going to jump-start our city center area," said Scott Stevens, council secretary. "I think this is going to really help us bring a lot of new people to the area."

The Detroit News two weeks ago first reported the possible GM Tech Center expansion.

GM said the project could run through the end of 2020. In its tax abatement application, GM listed several potential projects including $180 million for the Design Studio and a new parking deck; $63.7 million for a building not identified; $54 million for an unidentified parking deck; nearly $60 million for renovations at Research and Development buildings; a $39 million addition to the Pre-Production Operations building, where GM tests manufacturing equipment; a $20 million renovation/addition to an Advanced Engineering Center lab; and $750,000 renovation to a cafeteria.

Blanchard said an area that houses information technology also would be renovated.

The Tech Center, which includes more than 60 buildings and sits on 330 acres, is home to about 19,000 GM employees and contractors. In August, flooding at the Tech Center caused about $132 million in damage, GM said.

GM spokesman Dan Flores said GM did not pursue an amendment to GM's global state tax credit (Michigan Economic Growth Authority) for the Tech Center project.

GM in July 2014 received an amendment to that state tax credit from the Michigan Strategic Fund, increasing the number of employees for which GM is able to receive tax breaks at the Tech Center by 1,750. The company told the Michigan Economic Development Corp. then that it would create 1,750 new jobs, as various engineering functions from outside the state were consolidated to a site in Michigan.