By David Eggert
Associated Press
LANSING (AP) - Michigan's economic development board awarded $618 million in tax incentives on Tuesday for a $2.1 billion development project in Detroit that includes a 58-story building on the site of the iconic former J.L. Hudson department store - the first use of new state tax breaks for "transformational" redevelopment work.
The Strategic Fund board approved the package for Bedrock Management Services, along with a separate $4 million grant for Amazon to locate a warehouse in the Grand Rapids area.
The office, retail, residential and hotel project in downtown Detroit has four construction sites covering 6 acres. It includes constructing the tallest tower in Detroit on the Hudson's site, restoring the historic Book Building and Book Tower, expanding the One Campus Martius building and building a high-rise mixed-use building on vacant sites known as the Monroe Blocks.
Bedrock founder and chairman Dan Gilbert said in a statement that the "landmark developments are a milestone representing Detroit's credible new era of hope, optimism and growth." Gov. Rick Snyder and Detroit Mayor Mike Duggan also praised the developments.
Bedrock is the first developer to receive tax incentives under Michigan's transformational brownfield plan - laws passed in 2017 that allow developers to keep income and withholding taxes from people who live and work at the sites along with sales taxes associated with construction. The package accounts for $386 million, or more than 38 percent, of the $1 billion that can be awarded. Bedrock will be eligible for $308 million of $800 million in post-construction incentives authorized under the new laws and $78 million of the $200 million allowed during construction.
"We think there's more than enough room for other projects to fit within the program," said Jeff Mason, CEO of the Michigan Economic Development Corp.
Bedrock also was granted other incentives. The developer and state economic development officials estimated the project would generate $596 million net benefit to the state, or $3.20 in state revenue for each $1 of incentive. They said it would support 7,738 new full-time jobs in Detroit.
Also Tuesday, Seattle-based Amazon won a $4 million state grant to open a fourth fulfillment center in Michigan - this time in Gaines Township near Grand Rapids. It is the fourth grant awarded for such a warehouse in 18 months.
Amazon plans to create 1,025 full-time jobs with benefits. The site is on land owned by furniture maker Steelcase. The MEDC said Amazon chose Michigan over competing sites in Illinois, Indiana, Ohio and Wisconsin.
Published: Thu, May 24, 2018
