DETROIT (WXYZ) — It could all come down to a vote by the Detroit City Council tomorrow on whether to approve a $60 million tax break over ten years for the Hudson’s project in the heart of downtown.
The vote was delayed last week after opposition said Detroit can’t afford to lose that much money.
Billionaire developer Dan Gilbert started this project in 2017 with unanimous City Council approval and many believe he’s the last person who needs this incentive with some $200 million in other government incentives already in place.
Jared Fleisher is Vice President of Rocket Companies and tells 7 Action News, “Dan is losing money so the city can make money. That's the true story of the Hudson's project.”
Fleisher says Gilbert’s return is 1.6% annually.
Yes, it’s personal for his boss, billionaire Dan Gilbert - building his legacy. The Hudson’s Project is offices, a hotel, restaurants, retail, and residential space.
The project has been scaled back to finish it now. That’s why the Gilbert request for the tax break now.
Gilbert is investing $1 billion and is borrowing $400 million to finish the project in two years. Why give the billionaire the tax break?
“The tax abatement is needed for the financing to work to get the loans to finish the project,” Fleisher answers.
The opposition has surfaced at the Detroit City Council. Two virtual meetings today included City Council President Mary Sheffield asking Fleisher, “How much has Dan Gilbert made off of Detroit thus far?”
And last week caused the Council to delay its vote.
“We need to figure out a way as a community to hold billionaires like Dan Gilbert accountable, so our neighborhoods, schools, and libraries get the funding they deserve,” Molly Sweeney Co-director of 482 Forward said to the Council last week.
“There has really been a lot of misinformation,” says Detroit Mayor Mike Duggan.
He says the tax cut hits only the Downtown Development Authority and he supports the tax break. “And it is not taking any money away from schools, libraries, neighborhoods, that money couldn't be spent there anyway,” the mayor tells 7 Action News.
The mayor points out the future of jobs, 7,500 to build it and 2,000 permanent. The state has given $192 million in financial incentives.
So, if the City Council votes no, get this: here’s what happens next.
“I think if it's not approved, anybody would read reevaluate pretty much everything about the relationship that they're in at that point,” says Fleisher.
What does that mean?
Fleisher continues, “I think we have a lot of hard thinking and soul searching to do. Do we need to scale back the project? And what is the future of our investment in the city looked like?
Dan Gilbert has done almost 100 downtown development projects over many years.
“And none of this is a threat. We, the city and we’re confident the right thing’s going to happen,” Fleisher finishes.
The City Council vote is set for tomorrow around midday. Some council members are still undecided.