FCA seeks $160M in tax incentives for Detroit plants

Fiat Chrysler Automobiles is seeking up to $160 million in taxpayer incentives to partially subsidize a planned $2.5 billion investment in two Detroit assembly plants.

The package of taxpayer incentives, grants and breaks would come from an Industrial Property Tax Abatement, the Good Jobs for Michigan program, a State Essential Services Assessment Exemption and a Michigan Business Development Program grant from the Michigan Strategic Fund, according to documents submitted this week to the Detroit City Council.

FCA's plans to spend $1.6 billion converting its Mack Avenue engine plants into a Jeep assembly plant and $900 million retooling and modernizing the company's nearby Jefferson North Assembly Plant will add 4,950 jobs and is expected to result in a "gross fiscal benefit" of $300 million, according to the Detroit Economic Growth Corp.

"FCA confirms that it has applied for up to $160 million from existing state incentive programs as related to its proposed development at the Mack Avenue Engine Complex and Jefferson North Assembly Plant," an FCA spokeswoman said Tuesday. "As these incentives have yet to be approved and negotiations are still pending, we cannot comment further."

If approved by state economic development officials, the tax incentives would amount to 6.4 percent of the automaker's total investment at the two east side Detroit plants.

By comparison, Ford Motor Co. received $239 million in tax incentives over 30 years for a planned $740 million autonomous vehicle campus in Detroit's Corktown neighborhood, anchored by the long-vacant Michigan Central Station train depot. If that ambitious project comes to fruition, Ford's incentives will amount to 32.3 percent of its investment.

The disclosure of FCA's potential tax incentives comes three days after the city's self-imposed deadline to assemble 200 acres for FCA's plant expansion, which could add millions of dollars to the value of the subsidies for the automaker to expand its manufacturing footprint in the Motor City.

The potential tax incentives for Fiat Chrysler would need approval by the Michigan Strategic Fund's board.

A spokesman for the Michigan Economic Development Corp. would not confirm the $160 million figure.

"At this time, FCA and the MEDC are still finalizing the incentive package that will go before the MSF board," MEDC spokesman Otie McKinley said in an email. " As is always our process the MEDC does not share project details until time of MSF board approval."

No date has been set for the MSF board to consider tax incentives for the automaker, McKinley said.

John Roach, spokesman for Duggan, said the mayor's office was "making significant progress" on the land deals and there will be "an announcement when everything is done."

Detroit's efforts to assemble public and private land around the two FCA plants is said to be a complicated matter involving a series of land swaps to lower the city's out-of-pocket costs. DTE Energy Co., the Great Lakes Water Authority and Hantz Farms have already publicly agreed to land deals with the city. City Council approved those land swaps Tuesday on a 7-2 vote, The Detroit News reported.

One of the biggest landowners with which Duggan's team has been negotiating is Crown Enterprises, the real estate development arm of billionaire trucking mogul Manuel "Matty" Moroun's family business. The Morouns own an 80-acre paved parking lot that they lease to FCA for finished vehicle storage. It's the site of the former Budd Wheel plant, which Crown Enterprises demolished in 2017 to build a logistics and vehicle shipping center for FCA.

On Friday, the Michigan Department of Environment, Great Lakes and Energy's Air Quality Division approved FCA's air pollution-control permit for expansion of the Mack Avenue plant.