.

City Supports $4M Tax Exemption for Ford Motor Company

A public hearing for the request was held Thursday at Dearborn City Hall.

Ford Motor Company received support Thursday for a tax credit that will aid in renovations and upgrades to its Dearborn Research and Engineering complex.

A public hearing was held on the matter at Dearborn City Hall.

The Industrial Facilities Tax Credit, according to the state of Michigan, is “a tax incentive to manufacturers to enable renovation and expansion of aging facilities, assist in the building of new facilities, and to promote the establishment of high tech facilities.”

In Ford’s case, the $49 million investment will upgrade machinery and equipment at the Research and Engineering complex, located at Oakwood Boulevard and Rotunda.

It will focus on “electrification initiatives and upgrades,” according to Ford’s State Government Relations Regional Director Gabby Bruno. Renovations will allow the facility to be more useful in testing batteries, safety equipment, breaking systems and other components.

“This allows the facility to remain competitive, which is important to securing its future,” Bruno said. “This investment allows us to continue to make the business case to continuing to invest in Dearborn.”

The move, Bruno added, is expected to support 132 jobs and create 10 new jobs.

The tax exemption will save the company more than $4 million in taxes, $2 million of which is city taxes.

If the city’s IFT exemptions surpass a certain percentage, explained City Assessor Gary Evanko, the city is required to hold a hearing on a new exemption request to determine if it would impair the finances of the city.

“In my opinion,” Evanko said of Ford’s request, “it would not.”

The request received full council support, and no public comments for or against the request were heard.

All IFT exemptions must be approved by the State Tax Commission.

The exemption, however, is tied to the possible elimination of personal property tax. The phase out of PPT was approved by the state legislature in December, but is tied to an Aug. 2014 vote that will determine if the state’s 6 percent “use” tax can be used to offset some losses to communities caused by the end of PPT.

If personal property tax is effectively eliminated, the IFT exemption for Ford Motor Co. will end at the start of 2015 as it will fall under new tax laws.

The project is expected to be completed within two years.

Pam January 11, 2013 at 01:38 PM
They should have received a firm commitment to hiring some local residents in exchange for this local tax abatement.
Tom B January 11, 2013 at 04:23 PM
Questions: What effects will this have, negatively, on the City of Dearborn? How will this affect me as a property owner and my services? I like FMC and encourage its success, but not on my dollar.
City of Dearborn (Editor) January 11, 2013 at 06:01 PM
Well, it's $2 million in taxes that the city isn't getting from Ford. How that will translate in the city's budgeting, and what long-term positive impacts it will have for Ford Motor Company (and thus, Dearborn) are hard things to estimate. That's a good question, though - where should the city draw the line between helping out businesses and allowing tax cuts?
Sarah Jorgensen January 11, 2013 at 07:31 PM
It would be nice if Ford could incentivize living in the city of dearborn to the 2200 new hires mentioned in the news today. Maybe give them a bonus for buying a house in dearborn?
marooned in Dbn January 12, 2013 at 05:02 PM
I have an idea...How about the governor extend the personal property tax exemption to all the property owners in the state, not just the corporations. After all, if corporations are considered "people", with the same "rights",as "natural" people, then mere flesh & blood "people" should also enjoy the same benefits as the artificial people. As it stands now, this should be considered as unequal treatment under the "law".

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something