City of Detroit
Rendering of the proposed Fiat Chrysler Automobiles assembly plant.
A controversial land swap between the city of Detroit and wealthy developers cleared a key hurdle Thursday.
The three-member Planning and Economic Development Committee unanimously endorsed the plan, making way for a final vote by the full Detroit City Council on Tuesday.
"We still have a few days to solidify," committee Chairman James Tate said.
Under the deal, the city would turn over 215 acres of land to Fiat-Chrysler Automobiles to build the $2.5 billion plant. In exchange, FCA is pledging to create 4,950 jobs.
The most controversial part of the plan involves billionaire Matty Moroun, who would receive $43.5 million in cash and 117 acres of land. In turn, Moroun's company, Crown Enterprises, would give the city 82 acres of his property that is needed to build the plant. In addition, Moroun would receive another $15 million from the city and $6 million from the state if some of the land in the I-94 industrial area can’t be transferred to his company.
Some of the property that Moroun would receive is prime real estate in southwest Detroit and 43.5 acres across the street from the Detroit City Airport.
Another beneficiary in the land swap is billionaire Anthony Soave, one of the biggest contributors to Mayor Mike Duggan’s campaign. Soave stands to receive more than 30 acres in return for roughly 8.5 acres and $1.5 million.
Soave has a checkered past. According to court records, he admitted he gave convicted former Mayor Kwame Kilpatrick about $400,000 worth of private flights and a Rolex watch while getting lucrative contracts from the city. Following a property dispute over his Corktown development Elton Park, his construction firm damaged music venue the UFO Factory
, forcing it to close down for more than a year.
F. Thomas Lewand, the mayor’s group executive for jobs and economic growth, admitted last week that some of the deal stinks.
“There are parts of this deal where I had to hold my nose,” Lewand told the city Economic Development Corp.
But on Thursday, Lewand was much more positive, saying the deal is critical to “getting people out of poverty.”
“Those jobs are so critical,” Lewand said. "We did what we had to do to provide jobs."
Trouble is, the deal does not hold FCA accountable if it fails to create a single job. FCA has pledged to give Detroiters a crack at the new jobs after UAW members are offered employment. But there is no mandated quota for hiring Detroiters.
It’s unclear whether the full council has enough votes to approve the land swap.
Councilwoman Raquel Castañeda-López said last week that she plans to oppose the plan and had a big problem with the deal being hammered out behind closed doors.
Councilman Andre Spivey hinted Thursday that he will support the deal, even though he said, "I don't like it in its totality."
Council President Brenda Jones said she is still undecided.
"I'm still taking everything into consideration," Jones said Thursday.
Some Detroiters are questioning whether the city council has learned anything from the more than $200 million in tax subsidies to the Ilitch family for the Red Wings arena. The Ilitches have so far failed to follow through on their pledge to create pocket neighborhoods and renovate large abandoned apartments that remain an eyesore.
Some activists are pledging to collect signatures to recall every council member who supports the deal.
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