by Scott McClallen
The state signed off on $615 million of taxpayer incentives in the transformational Brownfield Plan for District Detroit.
The Michigan Strategic Fund approved funds for the $1.5 billion development from the Related Companies and Olympia Development of Michigan, which aim to renovate the area near Little Caesars Arena, Comerica Park, Ford Field, the Fox Theatre, Cass Park, and the Masonic Temple.
The $615 million of funding comes from various tax breaks. Income tax capture and withholding tax capture would total $352.3 million. Local school and property tax capture would total $213 million, while construction tax capture would total $11.4 million, and construction sales and use tax exemptions would total $38.1 million.
The development would include the construction of 10 renovated historic or new projects, including four mixed-income residential buildings, four commercial office buildings and two hotels, and additional green space.
The proposed projects include 1.2 million square feet of commercial office space, 146,000 square feet of retail space, 467 hotel rooms, and 695 residential units.
At least 20% of the residential units would be available to rent at rates affordable to those earning no more than 50% of area median income, equivalent to an annual salary of $35,800 or less for a two-person household.
The Detroit City Council previously approved a $615 million transformational brownfield redevelopment plan.
A Detroit Economic Growth Corp. press release says that the 10 projects are expected to generate $751 million in new city tax revenue over 35 years and another $1 billion for the state. Other taxing authorities would receive $394 million during that time.
Developers say project construction would support 12,450 direct, on-site construction jobs, but requires taxpayer subsidies to become reality.
However, many worry the giveaway benefits billionaire developers more than Detroiters. Detroit City Council President Mary Sheffield opposed the brownfield redevelopment plan.
“The model of developing our City has been the norm over the last 40 years and we’ve seen nothing but the proliferation of poverty, the loss of population, the obliteration of Black businesses and the systematic exclusion of Detroiters with respect to ownership and equity,” Sheffield said in early April.
Developers are seeking about $800 million in tax breaks for the project.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
