The decision to give more tax breaks to Dan Gilbert’s downtown skyscraper is still up in the air.
Detroit City Council is postponing its vote to approve $60 million in tax abatements for the delayed Hudson’s site project.
That’s after several residents spoke out against the 10-year abatement plan for the property, saying the city needs to capture those taxes to fund public schools and libraries.
While many on the board voiced their support for the tax breaks, City Councilmember Angela Whitfield Calloway plans to vote against it when the time comes.
“The tax abatement is not even necessary for this development to be developed to its completion,” Whitfield Calloway said. “It’s not needed. It’s just being requested.”
“The tax abatement is not even necessary for this development to be developed to its completion. It’s not needed. It’s just being requested.” — City Councilmember Angela Whitfield Calloway
Construction on the Hudson’s site started in 2017 with millions of dollars in state and local tax breaks. Back then, developers said that the project would be completed in 2022, but now say the building could be finished by 2024. Costs for the project have increased as well and now total $1.4 billion. Much of the project remains unfinished with its steel frame still visible from Woodward Avenue.
The breaks were opposed by community organizers who said the money should go to the city’s neighborhoods.
“Absolutely zero is trickling down to thousands of Detroiters as they are being forced to leave the city for places like Romulus and Taylor to find housing and opportunities that should exist here for Black folks in the largest majority Black city in the country,” said Theo Pride with Detroit People’s Platform.
Halima Cassells, an artist living in Detroit’s North End, told City Council the money could be spent elsewhere.
“These billionaires do not need our tax dollars,” Cassells says. “Our children do.”
The Hudson’s site and three other Gilbert developments downtown are already receiving a $618 million tax break package as part of a Transformational Brownfield Plan. The abatement was approved by the Michigan Strategic Fund, a board formed by Gov. Rick Snyder in 2012 that approves grants and loans under various state programs.
The 20-year deal allows Gilbert’s real-estate firm Bedrock Detroit to capture half the state income tax from residents and employees living and working in properties like the Monroe Blocks project, the One Campus Martius expansion and the renovation of the Book Building and Tower. Many of those projects have been delayed since their announcements. The Monroe Blocks project has had little to no construction work performed over the last five years.
“These billionaires do not need our tax dollars. Our children do.” —Halima Cassells
Officials claim the Hudson’s site project will create nearly 2,000 full-time jobs once the building is constructed and 7,500 construction jobs as its built. City Councilmember Scott Benson said tax breaks are often needed to solicit development in Detroit.
“We’re using these incentives in our neighborhoods very effectively,” Benson said. “They’re providing jobs and growing our general fund.”
According to a March memo from Detroit City Council’s Legislative Policy Division, the city had $38.8 million in property tax breaks on the books in its 2021 fiscal year, representing 16.8% of the city’s total tax revenues and abatements for real estate. Detroit ranked substantially higher in its abatement rates than any other cities studied by city policy makers. Lansing had an abatement rate of 8.6% and Baltimore’s was 3%.
“The City of Detroit needs to carefully manage abatements to ensure that the benefits are greater than the loss of property tax revenue,” wrote David Whitaker, director of the Legislative Policy Division.