For Ford, returning to the city of Detroit means first checking off a long list of tax abatements — breaks it says it needs in order to pull off its planned Corktown campus. That would mean $103 million in lost future tax revenue for the city itself, though total incentive package Ford wants amounts to $238.6 million.
Depending on which direction you’re coming from, it’s either agregious or just the cost of doing business.
The automaker hopes to turn the now-purchased Michigan Central Station and a slew or surrounding buildings and properties into a high-tech hub. From this campus, in which Ford says will invest $740 million, up to 5,000 workers, half of them Ford employees, will develop the next generation of vehicle-related tech, as well as vehicles themselves — just not of the internal combustion, pickup variety. Renovating the long-abandoned train station and transforming it into a public/corporate nerve center stands to eat up a large slice of the cash.
Monday night, the automaker laid out its wish list to the Detroit Economic Growth Corp. According to the Detroit Free Press, Ford hopes to gain $103,591,804 in tax incentives from the city, with the remaining abatements bringing the total to $238,559,497.
The largest abatement on the list concerns just over $208 million in deferred property taxes, city corporate income tax, and utility users tax over the period of 30 years, of which the city’s on the hook for over $90 million. Nearly $29 million in incentives would come from commercial and rehabilitated sites having their property taxes frozen for a period of 12 to 15 years, while a smaller sum concerns residential development in the campus. Those breaks would save future residents money, not Ford.
Each campus property lies in a Renaissance Zone — places where residents and businesses are eligible for combined tax breaks from the city, Wayne County, and the State of Michigan. The three entities formed the zones to attract residents and employment in the hopes of stabilizing economically depressed areas of Detroit. Economic opportunity, neighborhood improvement, and a boosted local economy serving those extra paychecks is the goal of the program.
The Free Press heard an earfull against the abatements, though the city and state were apparently willing to hand over $4 billion in tax breaks if Amazon decided to locate its second headquarters in the Motor City. Ford is hardly the only company to arrive in Detroit and ask for incentives it’s eligible for. It’s just the most recent. Could it go without? Sure —the extra tax it would have to pay over the coming few decades would be the equivalent of one or two big product recalls, and there’s been no shortage of those recently. But neither is it being forced to come to Corktown.
The city votes on the tax package on October 16th.