FCA Tax Incentives Remained A Secret Until After State Board Approval

LANSING — Gov. Gretchen Whitmer's Michigan Economic Development Corp. kept its tax incentives package for Fiat Chrysler Automobiles' massive $4.5 billion capital investment under wraps until after the state's economic development board approved them Tuesday.

It was an unusual move, even for a quasi-governmental agency that routinely operates in secrecy to shield the value of taxpayer subsidies it offers and delivers to private businesses that meet certain job-creation requirements.

Unlike most public bodies, the Michigan Strategic Fund board does not make details of its agenda public until after it approves them.

The MSF board voted unanimously Tuesday afternoon in favor of a state tax incentive package totaling $223.5 million — without any substantial questions or scrutiny from the board of business executives.

"We followed the same practice, traditionally, we have with other deals that we've taken forward to the MSF board," MEDC CEO Jeff Mason said.

The MEDC's practice was slightly modified for the FCA deal Tuesday. Usually, the MEDC sends reporters briefing memos on tax incentive packages the day before the Michigan Strategic Fund's board meets and typically approves the incentives without much debate. The memos are embargoed and can't be reported until after the MSF board votes.

But an MEDC spokesman told reporters Monday that details of the incentive package for FCA wouldn't be made available to news organizations or the public until after Tuesday's board vote.

All told, FCA will be getting up to $319 million in assistance from state and Detroit taxpayers for its $4.5 billion investments across five plants in Detroit, Warren, Sterling Heights and Dundee.

FCA has said it will create 6,433 new jobs in Southeast Michigan, which works out to a taxpayer subsidy of $48,453 per job.

The new assembly plant jobs in Detroit and Warren will have an average annual wage of $59,846, according to the MEDC's briefing memos made public after the MSF board vote.

Taxpayer incentives for FCA range from property tax breaks to 10-year captures of state income taxes generated from newly created jobs and grants from the MEDC to subsidize site preparation at FCA's Mack Avenue plant.

The footprint of FCA's Mack Avenue complex is being expanded to take over St. Jean Street and a berm that has long shielded the East Village neighborhood's view of the Chrysler plants.

Although FCA's investment plans were announced nearly three months ago, state officials timed the MSF board's deliberations to come at the end of the process, leaving no time for public input.

The MSF board held its meeting at 2 p.m. Tuesday instead of its normal 10 a.m. start so the vote on the FCA package could occur after Detroit City Council voted to approve $50.6 million toward the assembly of 215 acres of east side Detroit land that's being given to FCA for its Mack Avenue and Jefferson North plants.

"We were prepared to potentially move the item forward through the board," Mason told reporters. "Our items typically are contingent upon local incentives being in place and final contracts negotiated. We would have probably moved that project forward if the council chose to table or hold off. We would have done so to signal our state's support for this important project."

Source : https://www.crainsdetroit.com/government/fca-tax-incentives-remained-secret-until-after-state-board-approval

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