Equitable Detroit Coalition and Detroit People’s Platform
Infosheet: Why the Ford Deal Matters
What’s the Big Deal?
In October, Detroit City Council approved the Community Benefits Agreement struck between the Neighborhood Advisory Committee (NAC) and Ford Motor Co. around their new project in Corktown. Ford only offered 10 Million in community investment on their $740 million project. The NAC voted 9-0 to approve the Ford CBA offer. This in spite of urgings from community members to fight for a better deal.
The current Ford deal is a Bad Deal
We are giving away WAY TOO much, getting too little in return, and the “too little” we’re getting is based upon projections and intentions rather than facts and details about the process for claw-backs.
Here’s what ford gets
These incentives are made possible by:
Michigan Renaissance Zone Act
$208,796,791 in tax abatements for the Renaissance Zone, coming from a combination of city, county and state money. This is an abatement of real and personal property taxes, city corporate income tax, and utility users tax. This would occur over 30 years. Nearly $90 million would come from the City of Detroit.
Commercial Rehabilitation Act
$8,056,085 under the Commercial Rehabilitation Act (P.A. 210). Nearly $4 million in tax incentives would come from the City of Detroit. This would occur over 10 years.
Obsolete Property Rehabilitation Act (OPRA)
$18,763,677 under the Obsolete Property Rehabilitation Act (OPRA). This act allows the taxable value of a property to be frozen at its pre-improvement value with some exceptions. It would last 12 years and nearly $9 million would come from the City of Detroit.
Neighborhood Enterprise Zone Act
$2,933,944 under the Neighborhood Enterprise Zone Act. This law allows taxable values of property to be frozen at their pre-improved value. This incentive lasts 17 years (it reduces at 15 years) and just over $1 million would come from the City of Detroit.
(Final Decision Pending)
What’s the community’s Return on investment?
We know what Ford’s Return on Investment (ROI) is going to be, but what is the community’s ROI?
“BUT IT’S A DONE DEAL. COUNCIL ALREADY GAVE IT AWAY. WHY DOES IT MATTER?”
Three Reasons why the Ford Deal Matters:
1. WE WANT DEVELOPMENT WITHOUT DISPLACEMENT!
We’re not opposed to development, but this goes too far.
2. INSTEAD OF BECOMING AN EXAMPLE CBA, FORD JOINS the ranks of Gilbert and the Ilitches as a bad corporate player.
This is beyond corporate welfare, this is a straight up gift to a $17 billion dollar global corporation. For all the sentimentality around Ford Motor Company, they still roll like a corporation; driving the hardest bargain for the best deal they can get.
3. The process “gaslights” community by inviting them in and then dismissing them for already done deals.
A quick definition of gas-lighting is making people experience self-doubt or self-criticism by acting welcoming but being disrespectful. In short, saying one thing while doing another.
Here’s what the community gets
Whatever the city collects in income tax over next 30 years. That number will be based on how many workers are employed and local business activity.
Ford Commits to 2,500 jobs. DEGC* says there will be 5,000 jobs. The other 2,500 jobs are just DEGC projections. Since we know these numbers usually don’t come out as planned we’re not sure we can trust them. *Detroit Economic Growth Corporation (DEGC) manages business retention, attraction, and economic development for the city.
Ford has committed 2,500 jobs even though we are hearing about job reductions and retiree buy-outs in the media.
What would a real CBA with Ford look like?
Every CBA is different, but REAL CBAs are community driven, meet community defined needs and are legally binding and enforceable.
A recent REAL CBA in Nashville included, setting aside affordable housing, providing child care and community services, and raised low wage jobs to $15.50 an hour.
What can I do? How can we get ford back to the table?
Continue to call for the NAC to push for a better CBA deal based on the original recommendations they submitted to Ford. ie fund the Housing Trust Fund, which supports affordable housing options for Detroiters most in need.
Attend future meetings of the NAC, Ford and city representatives and let them know how you feel.
Support the call for the CBO amendments that are currently before City Council.