Feb 28, 2024 - News

Detroit City Council approves Henry Ford Health and Pistons' megaproject

Pistons vice chairman Arn Tellem speaks to Detroit City Council.

Pistons vice chairman Arn Tellem speaks to City Council yesterday. Photo: Annalise Frank/Axios

After weeks of negotiations, a $3 billion mega-development secured Detroit City Council's approval 6-3 on Tuesday.

Why it matters: The Pistons, Henry Ford Health (HFH) and Michigan State's "Future of Health" development sought $297 million in state and local tax incentives, plus approval for its community benefits agreement with the city.

  • The Community Benefits Ordinance process, required when large-scale developers want tax breaks, has been fraught with confusion and disagreement over the true shape and impact of the development.

What they're saying: Arn Tellem, Pistons vice chairman and an influential Detroit business figure, attended the session Tuesday to speak to the lawmakers at city hall. "It's an investment in Detroit and the health and wellbeing of its residents for generations to come," he said.

  • Council President Mary Sheffield endorsed the Future of Health, saying "no project is perfect," but that the Pistons are "committed to the city" in a way that will "continue far beyond this project."
  • Council members Mary Waters, Angela Whitfield Calloway and Gabriela Santiago-Romero voted against. Santiago-Romero maligned a lack of sufficient investment in community benefits around housing affordability and home repair.
  • The other council members in favor were president pro tem James Tate, Scott Benson, Latisha Johnson, Fred Durhal III and Coleman Young II.

Catch up quick: HFH plans a $2.2 billion hospital expansion, alongside 662 apartments being developed by the Pistons and a new research center with MSU.

  • The development team sought public financing mostly for the Pistons' three residential and commercial buildings — plus approval of an ordinance-mandated community benefits deal agreed upon with the majority of a neighborhood resident council.

Yes, but: Some community advocates and an expert on Detroit's Community Benefits Ordinance dispute the true value of the project's benefits promises.

  • They say the developers tout how they'll help Detroiters, but their language is weak and lacks tangible action items.

Context: Following an unofficial road paved during District Detroit's and Dan Gilbert's recent tax break requests, the development team agreed to add a few more community benefits commitments to its 52-item list, as requested by some City Council members to garner support. They include:

  • $2 million for the city's affordable housing fund.
  • $1 million for a community land trust.
  • $750,000 for housing vouchers for students near Henry Ford Hospital who get MSU scholarships.
  • Removing language seen as potential for "double-dipping" between donations and fees the developers are required to pay.

Between the lines: In an effort to address concerns about local Black developers' participation in the city's revitalization, both HFH and the Pistons have entered into memorandums of understanding with the nonprofit Real Estate Association of Developers (READ).

  • The agreements show an alignment of equity goals and provide opportunities to collaborate, but appear to lack enforceable mandates.
  • The Pistons, for example, agree to make "reasonable efforts" to work with READ as advisors, and the development group has a "target" to hire small, Black-owned and Detroit-based businesses for $100 million worth of goods and services for the development.
  • Henry Ford Health agrees to create a housing and economic development framework plan for the property it owns around its hospital.

What's next: The project still requires state-level approval in April for its "transformational brownfield" plan, which allows large-scale developers to capture certain Michigan taxes over decades, before it breaks ground.

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