Ross, Ilitches ask for $800M in public financing for District Detroit
The Ilitch family and Stephen Ross are asking for $800 million in public incentives to develop and renovate 10 downtown buildings for apartments, hotels, offices and retail space.
Here are the tax breaks and other public financing requests the Ilitches and Ross are making for their $1.5 billion District Detroit proposal, revealed in a community meeting Tuesday night, which require various approvals to move forward:
🏗 $133 million in city tax breaks: $96 million in commercial incentives that freeze local property taxes for up to 10 years when a building is being rehabbed or built for commercial uses. Plus, a $37 million discount on improvements to housing over 15 years.
♻️ $616 million in brownfield tax breaks: Ross's Related Cos. and the Ilitches's Olympia Development want to utilize the state "transformational brownfield" tax break program that started in 2017 for major real estate projects on sites requiring environmental cleanup. They would get reimbursements over 35 years for certain taxes including income, sales and property.
- Dan Gilbert is by far the biggest recipient of transformational brownfield incentives so far, according to Crain's Detroit, getting $618 million for projects totalling more than $2 billion.
🏡 $49 million in other public financing: The Downtown Development Authority voted yesterday to give the District Detroit $23.7 million in loans for affordable housing, plus $25 million in reimbursements for the cost of public infrastructure improvements.
- Developers say the project will create 865 units of housing, with about 150 rented for around $840.
What they're saying: "It's a relatively good step in the right direction if the incentives are for providing deeper affordability for housing," says Francis Grunow, a New Center resident who served on the neighborhood advisory council during the district's first planning phase from 2014-19.
- Grunow says the question now is to what degree can the community push to make these projects worthy of our public investment. "What could even resolve as part of the discussions and negotiations between the NAC and developers is a question to me."
Of note: Because the District Detroit is in the Downtown Development Authority district, its property tax discounts don't affect the city's regular coffers — its general fund. But the money is still public.
- The developers and the Detroit Economic Growth Corp. argue that the projects, touted as generating $751 million in new city tax revenues and $1 billion for the state, wouldn't happen without incentives.
- "Without these incentives, the projects would not have enough cash left over every month in order for the bank to give them a loan for that mortgage," Nevan Shokar of the DEGC said at the Tuesday night meeting.
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