GM could get $97M in tax breaks for Warren project
General Motors Co. could receive nearly $97.1 million in property tax savings over more than a decade through tax breaks the City of Warren approved for a possible expansion of GM's Tech Center.
Last week, Warren City Council unanimously OK'd a 50-percent tax abatement on the proposed $419.4 million expansion and renovation at the company's sprawling Tech Center. The city approved three abatements that would each last 14 years, including years for construction. One tax break is to begin next year for part of the investment, one in 2018 and one in 2020, according to City Council documents obtained by The Detroit News.
The estimated $97.1 million in abatements must be approved by the State Tax Commission. Warren Deputy Assessor Tom Agrusa said last week that exact amounts for the tax breaks would not be known until the buildings are constructed and actual assessed values for the buildings and parking decks are determined.
GM's proposed project includes new construction, renovations and additions to current buildings and new parking garages at the complex. The campus has more than 60 buildings that date to the 1950s. The project could retain about 3,800 employees and create 2,600 jobs in engineering, product development, information technology and other areas over the next several years, John Blanchard, GM's director of local government relations, said last week.
The Warren Tech Center employs about 19,000 GM workers and contractors.
GM says senior management is still reviewing the project and it has not been approved, but spokesman Dan Flores noted the tax incentive approvals were an important part of the project.
The Detroit automaker would not confirm the tax abatement amount.
"GM has paid its fair share of property tax and will continue to do so," Flores said. "We think the tax abatement is a win-win because the city will realize 50 percent of any real property taxes with this possible expansion. At the same time, we get a savings over the period of a tax abatement."
The company pays millions of dollars to the City of Warren annually in property taxes and is the city's largest taxpayer.
The City of Warren could receive some $43.9 million in property taxes from the Tech Center project, while other government units such as Warren schools and Macomb Community College, could receive more than $53 million over the course of the abatements, according to Warren documents.
Warren officials have said if GM finalizes its plans, total investment at the Tech Center could reach $1 billion.
Warren Council Secretary Scott Stevens said he supported tax abatements for the project because of the employment it will bring to Warren, including spin-off jobs. He also said the GM investment could help lead to improvements to the Warren's city center area near the Tech Center.
"Not all of these people are going to locate and live in the city of Warren, but a percentage will," Stevens said. "But if we can create a nice city center area, a downtown area, they'll utilize it after hours."
GM, in its tax abatement application to Warren, listed several potential projects including $180 million for the Design Studio and a new parking garage; $63.7 million for a building not identified; $54 million for an unidentified parking area; nearly $60 million for renovations at Research and Development buildings; a $39 million addition to the Pre-Production Operations building; a $20 million renovation/addition to an Advanced Engineering Center lab; and $750,000 renovation to a cafeteria.
Warren's tax rolls include more than $97.5 million in city operating revenue, including special assessments and administration fees, according to its website. Additionally, $206.3 million in levies are for city, county, state education and school taxes.