MACKINAC ISLAND – The Renaissance Center that is home to General Motors would be completely covered with a tax-exempt rich renaissance zone designation under a plan aired Friday to keep the automaker in downtown Detroit. The total tax exemption status would counter an offer from Warren for a 30-year property tax abatement if GM, which filed bankruptcy on Monday, consolidates at its technical center.
The new renaissance zone designation covers personal income, property, state business and local utility taxes. GM also would qualify for an anchor credit under state taxes.
Wayne County Executive Robert Ficano, who said the plan was developed within the past 24 hours, said the area had one available renaissance zone designation remaining. He said leaders wanted to not only make a difference for GM, but also to “send a message to the rest of the world that we are open for business.”
One of the five office towers in the Renaissance Center was covered by the tax-free zone designation, and the plan would now apply to the other four towers. The 2.2 million square feet of office space is about one-third vacant.
Ficano said if GM accepts the plan, it would mean EDS would also stay in the office towers and will attract others downtown.
The plan was announced at the traditional Big Four session at the Detroit Regional Chamber’s Mackinac Policy Conference that brings together Mr. Ficano, Detroit Mayor Dave Bing, Oakland County Executive Brooks Patterson and Macomb County Board of Commissioners Chair Paul Gielegham.
Bing described as “asinine” the proposal by Warren Mayor Jim Fouts to lure GM’s headquarters to the tech center. He said it is an example of the region not working together, adding as far as he knows, Mr. Fouts did not talk to GM or the Wayne, Oakland, Macomb county and city leaders who were part of the Big Four panel.
Bing said the big concern was the prospect of losing GM rather than the tax revenue that will be lost by the designation. “If GM were to leave, we would have had no alternative but to offer this to somebody else, so why not offer it to GM?” he said.
Estimates are that the tax loss could be up to $25 million a year. The Renaissance Center renaissance zone is a subzone that is allowed under state law but would have to be approved by the Strategic Fund Board. The tax abatements last for 12 years, and are phased out in 25 percent increments during the last three years of the zone designation.
Ficano said he has not calculated how much Wayne County would lose, but said it is not as much as would have been the case had the company relocated. Furthermore, he said the designation means officials can discuss with the bankruptcy court the attractiveness of consolidating other worldwide GM operations into the Renaissance Center.
While describing the zone status as a “nuclear warhead” that must be used carefully, Ficano said the proposal does not smack of desperation. “At this point it makes all the sense in the world because now it can be an economic magnet,” he said. “Companies that were looking to locate in the region can locate there.”
Gieglehem agreed that the leaders should not go after each other, but added that economic development tools benefit the region.
Patterson, who also said he does not engage in raiding neighboring areas, said he needs a more level playing field when it comes to economic incentives. “Wayne County gets 10 renaissance zones and we get none,” he said. “I need a more level playing field than that.”
Bing also registered his objection to moving the GM headquarters in a letter sent Friday to President Barack Obama, and said he hoped to get other elected officials in Michigan to send similar sentiments.
“It is with great dismay and trepidation to hear that General Motors and your Automotive Task Force is considering moving their headquarters out of the city of Detroit as part of the company’s restructuring in a potential bankruptcy,” he said, adding its presence is absolutely essential to the vitality of the city.
“There are no term economic savings that could justify the harm to Michigan’s largest city,” he said.
This story was provided by Gongwer News Service. To subscribe, click on
a>>
