Detroit Council Approves a $600.000 Tax Abatement for GM image

The Detroit City Council recently approved a $599,500 12-year tax abatement for GM, to persuade the automaker to build two logistics facilities at the Detroit-Hamtramck Assembly Plant.

Although the Detroit City Council has approved the tax abatement, it still needs the OK from the Detroit Emergency Manager Kevyn Orr. Bill Nowling, Orr’s spokesman, said that he does not know when he will review the abatement.

On Monday, September 23rd, the Detroit News reported that GM is looking for a $1.8-million tax break from Detroit City. Greg Martin, GM’s spokesman, said that the difference between the sum the automaker has requested and the one offered is due to how the two parties calculated the car maker’s taxes during the abatement period. This means that the US automaker expects to pay higher taxes in the following 12 years than the city expects.

A Detroit memo released this month shows that GM would save around $599,500 in the following 12 years with this abatement and the city would get $1.49 million in income tax revenue during the same period. The project will most likely create 210 new jobs.

GM previously said it plans to invest $121 million to build two logistics centers at its Detroit-Hamtramck plant, a project aimed at strengthening the plant’s production capacity and also keep it competitive over the long term.