Ford wants $104M in tax incentives from Detroit
Ford Motor Co. has submitted a tax incentive package to the city of Detroit with a request for $104 million in tax breaks for its Corktown campus. The company wants the Detroit City Council will approve the funding by mid-October so it can begin winterization work on Michigan Central Station.
The Mayor’s Office is expected to submit to the city council by Sept. 19 the automaker’s request for the city to abate $104 million in city taxes over 35 years, according to the Detroit Economic Growth Corp. The request is part of $238 million in tax breaks that Ford is seeking for its $740 million project that will create a 1.2-million-square-foot campus in Corktown.
Ford is hoping to get approval by Oct. 16 from city council to be granted a designation under Michigan's Obsolete Property Rehabilitation Act (OPRA) by the Oct. 31 deadline.
“We would like Ford to begin the securing and stabilization of this building immediately, and if they do that without these approvals then they don’t have the benefit of these incentives that allow them to make the investment,” said Arthur Jemison, chief of services and infrastructure for Mayor Mike Duggan’s Office. “We’re working with the community in the community benefits ordinance, and we’re working with city council to get approval of these benefits over the next weeks and months so that they can begin the stabilization of this historic asset in the beginning of 2019.”
According to the DEGC, under state law, work cannot begin on the project until the State Tax Commission grants Ford’s Corktown property the OPRA designation.
The train station, which sat empty and open to the elements for decades, has suffered severe structural issues that has made it difficult for Ford to preserve and restore the historic structure, according to the DEGC.
Ford's eagerness to move forward in the tax incentive process, just months after its purchase of the train station is a testament to its commitment to the project, said Sarah Pavelko, senior real estate manager for DEGC.
"It’s also a reflection that the train station is in desperate need," she said.
The Dearborn automaker has previously said it plans to bring 2,500 people from its autonomous technology and electrification departments to Corktown; another 2,500 employees will arrive from startups and other partner companies. Offering tax incentives to Ford is necessary for the city to attract such an investment, Jemison said.
“We’ve got some of the highest taxes in the country among cities of our size and certainly we’ve got the highest taxes in the state of Michigan,” He said. “So in order for us to be competitive and attract projects like this and create jobs, which we’re going to create 5,000, we’ve got to use the tools in the toolbox to ensure these projects are sustainable and feasible. This is the way we’re going to generate new tax revenue.”
Currently the train station earns the city about $200,000 in taxes. After the project is completed because of the number of people who will be paying income taxes, Jemison said the city will receive $10 million in tax revenue each year.
“We get to spend that money on Detroiters and Detroit neighborhoods,” he said.