Automotive News - Traverse City - August 6, 2019 - 5

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TUESDAY, AUGUST 6, 2019

Michigan helps seed FCA's Detroit project boom
How numerous state incentives fuel the deal
Published June 10, 2019
in Automotive News

Chad Livengood

clivengood@crain.com

ETROIT - In the words of
Michigan Gov. Gretchen
Whitmer, Fiat Chrysler Automobiles' $4.5 billion investment in five Detroit-area manufacturing operations amounts to "the
biggest automotive assembly plant
deal in the United States in a decade."
As far as business development
projects go, it was also one of the most
complex. Michigan economic developers not only had to woo FCA with
state tax incentives, but Detroit had to
assemble 215 acres of private and
publicly owned land for the multisite
plan - and do so in less than 90 days.
FCA will receive at least $319 million
in incentives, including tax breaks,
land use, cash grants, access to loans
and state help with employee recruitment and job training. Here's how the
project came together.

projects include:
$99 million tax incentive of 100
percent state income tax capture for up
to 10 years, provided by Good Jobs for
Michigan. The benefit covers new jobs
with an average annual wage of $59,846.
An award of land around the two

plants acquired by Detroit to be given
to FCA, valued at $50.6 million.
A $35 million grant through the

Detroit Brownfield Redevelopment
Authority to cover costs related to assembling land and site clearing
around the two plants.
A $20 million loan from Michigan

Strategic Fund's Investment Fund to the
brownfield redevelopment authority, to

Among Jefferson North incentives
(with Mack Ave. project): $50.6
million in land around the two plants
be repaid through tax-increment revenue generated at the Mack Avenue site.

Warren, Mich.
FCA plans to invest nearly $1.5 billion retooling and expanding its War-

ren Truck Assembly Plant for production of a new Jeep Wagoneer and
Grand Wagoneer, adding 500,000
square feet of plant space to the
3-million-square-foot factory originally built in 1938 on 87 acres. At the
adjacent Warren Stamping Plant,
FCA will spend an additional $236.2
million on technology and machinery improvements to increase output
at the 2-million-square-foot plant
built in 1948 on 78 acres.
Highlights of the $27.7 million in
public incentives for these projects
include:
A $21 million State Essential Ser

vices Assessment tax exemption for
15 years at Warren Truck.
A $6 million Good Jobs for Michi

Detroit: Mack Avenue
and Jefferson North
The site plan referred to as the Mack
Avenue project is the centerpiece of
$2.5 billion in investment FCA will
make in Detroit. The automaker plans
to join two engine plants and convert
them into a vehicle assembly plant -
the first new vehicle plant in Detroit
since the opening of Chrysler's Jefferson North Assembly Plant in 1992.
The $1.6 billion project will build a
new three-row Jeep SUV and Jeep's
next-generation Grand Cherokee,
generating 3,850 new jobs.
Separately, FCA will invest $900
million to modernize and retool its
Jefferson North plant, which will result in 1,100 new jobs.
Highlights of the $291.2 million in
public incentives available for the

Vol. 26, No. 1
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Creating smart cities together.

gan tax incentive of 50 percent state
income tax capture for up five years
on qualified jobs with wages averaging $60,701 annually at Warren Truck.
A $692,928 State Essential Services

Assessment tax exemption for five
years at Warren Stamping Plant.

Sterling Heights
and Dundee, Mich.
FCA plans to invest $169.3 million
at its 54-year-old Sterling Stamping
Plant outside Detroit. The automaker will get a five-year Alternate State
Essential Services Assessment tax
exemption valued at $180,900 for
that capital investment in the
2.7-million-square-foot factory on
254 acres. a

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Automotive News - Traverse City - August 6, 2019

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