Jul 27, 2022 - Politics

Hudson's tax break gets green light

City Council members sit at their desks during a meeting.
City Council President Pro Tem James Tate and other members during Tuesday's meeting. Photo: city of Detroit via Flickr

City Council approved a controversial tax break for the downtown Hudson's site yesterday.

Why it matters: The 5-4 "yes" vote for the $60 million tax abatement for Dan Gilbert's $1.4 billion project represents a reversal in majority opinion. Bedrock initially pulled its ask last month due to a lack of support from lawmakers.

  • The project drew dozens of public commenters yesterday. Union workers constructing the skyscraper hailed its importance for their jobs, while some residents said Detroit shouldn't give money to a billionaire.

What happened: Bedrock made seven commitments in response to Council President Mary Sheffield's request for more community benefits to garner her support, including:

👕 Twenty percent of Hudson's ground floor retail will go to small Detroit-based businesses

🏡 Gilbert companies will give $5 million for neighborhood improvement projects

💻 They'll also expand digital inclusion programs.

What's more: Bedrock is also increasing the number of affordable units required for some future projects, and lowering the max cost of those units.

  • In the meeting, Gilbert top lobbyist Jared Fleisher called it the "most far-reaching commitment to affordable housing ever made by a developer in the city."

What they're saying: Council President Pro Tem James Tate voted no, saying the amended proposal was brought to council without public notice. Member Angela Whitfield-Calloway agreed, adding that Bedrock's still not doing enough.

  • Sheffield said she would "definitely like to see more," but "we do have some progress here," pointing to the economic benefits.

Reality check: This opaque process has shown the need for reform in Detroit's tax incentive system, Ruth Johnson, public policy director for the Community Development Advocates of Detroit, tells Axios.

  • The updated community benefits were negotiated without substantial public input, she says.
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