FCA land deal, benefits agreement move to Detroit council for a vote
Detroit — Fiat Chrysler Automobiles NV is another step closer in its proposed plant expansion on the city’s east side.
The City Council is expected to weigh in Tuesday on key elements of the project, including a community benefits agreement and land swap proposals for the deal. The council’s planning and economic development committee on Thursday unanimously moved the items forward with a recommendation to approve them.
City Councilman Andre Spivey said Thursday he hopes the deal gets approved next week and wants to get Detroiters trained for the jobs the project will bring. He said it’s up to the city to create an atmosphere for businesses to create the jobs.
“I don’t know of any other company willing to come or want to come right now in the queue with that many jobs all at one time,” he said. “I think we ought to be careful how we move forward. There are people probably in the queue waiting to come with similar deals and those who we do not know that are watching Detroit to see how we conduct business here.
"Whatever happens with this deal here will set the precedent moving forward."
FCA plans to invest $1.6 billion in expanding its Mack Avenue facilities with a new plant and investing $900 million to modernize its Jefferson North Assembly Plant. The plant expansion is expected to add 4,950 jobs. The deal awaits city council approval. The city administration and FCA hope to have approval by May 21 to meet construction and hiring schedules.
Spivey said he believes the city could have a gotten a better deal but still thought the one before them was worth moving to the full council.
"I don’t like it in its totality, but I think it’s good for us right now to bring forth to bring the first phase knowing that after that, suppliers will soon follow, and we don’t know the reverberation of how far we can go with employment here,” he said.
City administration and FCA officials came before the planning and economic development standing committee Thursday following the body’s vote last week to bring several project-related items back for further discussion. The city has assembled acreage needed for the project and the automaker, the city and a neighborhood advisory council have agreed to a community benefits agreement. In the agreement, FCA says it will invest $13.8 million into workforce training, education, housing and neighborhood revitalization.
The committee on Thursday also moved to full city council with a recommendation to approve Industrial Facilities Exemption Certificates for 2101 Conner Street and 4000 St. Jean. The certificate would allow for a 50% tax abatement for the automaker for up to 12 years.
Tom Lewand, group executive for jobs and economic growth for the mayor’s office, said the subsidies provided for the project including land purchased, is about $57,000 per job, a third of the average subsidy provided for auto plants built in the United States in the last 10 years.
Lewand said he’s been working on the FCA deal since July or August.
“I’ve been doing deals for 50 years,” Lewand said. “This is the best deal I’ve ever done. It could not have been any better. … It’s a really good deal. I don’t think we left a nickel on the table.”
Not all FCA-related items under consideration Thursday received approval from the committee.
City Councilmen James Tate and Gabe Leland opposed the sale of the city-owned Millennium Parking Garage on Congress, which city officials have said is needed to help fund the city’s contribution in the land purchases. The committee moved that item to the full city council without recommendation to approve.
“My challenge though, and we’ve talked about it, once you make the deal, it’s gone,” Tate said. “I don’t think we’re in the business of creating parking structures anymore, especially in downtown. Especially how much the land is a premium. So that’s my biggest challenge with it.”
Land swap proposals in the deal will move forward to the City Council amid resident concern about property the Moroun family will receive in exchange for 82.2 acres of land it owns through its real estate arm Crown Enterprises. The land was a critical piece of the deal, Lewand said Thursday.
“We didn’t go to Crown and decide we wanted to buy their land,” he said. “Fiat Chrysler said we can’t do the deal without owning that land, so we had to do it.”
The city administration on Thursday worked to address concerns council members have expressed regarding the hiring of Detroit workers. The discussion included the city's plans for eight Detroit at Work hiring centers throughout the city by the end of the year. The automaker has already said it plans to give Detroiters exclusive access for four weeks to apply for the jobs, and ongoing priority for job openings for the life of the plant.
Councilman Scott Benson noted the east side of Detroit is expected to have two of the eight hiring centers, while none have been proposed for his district in the northeast section of the city.
Nicole Sherard-Freeman, president and CEO of Detroit Employment Solutions Corp., which operates the city's Detroit at Work program, said the eastside strategy is not finished. She said she expects an in-kind partnership as well as other sites on the east side for Detroiters to have access to hiring information.
Benson asked for an agreement in writing.
"In this situation, time is of the essence,” he said. “It is not easy to get into a location. You pay for what you get. … I want verification that the residents in my district on the northeast side of Detroit will have equal access to this opportunity."