Ford closer on $104M in tax breaks for Detroit train station campus
Detroit — Ford Motor Co. is one step closer in its quest for $103.5 million in tax breaks it seeks from the city for its Corktown campus.
The City Council is expected to weigh in as early as Tuesday on three of the four requested tax abatements after the council’s planning and economic development committee on Thursday moved the items forward with a recommendation to approve them.
“We feel a really strong partnership with the city,” said Gabby Bruno, director of Ford's government relations, Thursday following the public hearings. “I’m excited with how things came together with our community partners, with the city. We’re very excited to strengthen our commitment to the city of Detroit to the Corktown neighborhood.”
The tax abatements Ford seeks for city approval are: an obsolete property rehabilitation exemption for the Michigan Central Station and Book Depository that would reduce the millage rate for 12 years; a commercial rehabilitation exemption for the brass factory and parking decks that reduces the millage rate for 10 years and a renaissance zone that would last 30 years with a deferment by up to five years. The renaissance zone would exempt real and personal property taxes except for debt mills, city corporate income tax and utility users tax. Personal city income tax revenue would be generated and collected from the project.
Ford has also requested a neighborhood enterprise zone that would reduce the millage rate for a potential of 40 condominium units in the Michigan Central Station. That issue will return to the committee Nov. 15 as there is a 60-day waiting period before City Council can vote on the resolution to establish such a zone.
One of the most pressing issues for Ford is its desire for designation under Michigan's Obsolete Property Rehabilitation Act. The automaker has said it hopes to get approval by the Oct. 31 deadline so that it can begin winterization work on Michigan Central Station.
According to the Detroit Economic Growth Corp., under state law, work cannot begin on the project until the State Tax Commission grants Ford’s Corktown property designation under the rehabilitation act.
“We still, obviously, have to get through full city council and the State Tax Commission,” Bruno said. “We’re on track.”
The automaker’s request is part of $239 million in tax breaks that it is seeking for its $740 million project, which will create a 1.2-million-square-foot campus in Corktown. The company 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.
Currently, the train station earns Detroit about $200,000 in taxes, according to the city. After the project is completed because of the number of people who will be paying income taxes, the city expects to receive $10 million in tax revenue each year.
City Councilman Scott Benson expressed his approval of Ford’s efforts saying that it will add a 1 percentage point increase to the city’s annual revenue.
“That’s huge,” said Benson, adding that it’s “revenue for police, our fire, our employees, our bus drivers who are looking for pay raises. … This is how we pay for that. It’s not about how we’re going to save our way out of issues.
Benson noted the city faces a $145 million payment due annually for pensioners in the year 2024 as part of Detroit's historic bankruptcy exit plan.
"That day is quickly approaching," he said. "I just want to remind people what these projects mean and where investment goes.”