Dan Gilbert’s cronies are lobbying for a slate of bills that would allow Michigan developers to capture state sales taxes and income taxes to help finance their massive redevelopment projects. The bills would pave the way for Gilbert’s proposed redevelopment of the demolished J.L. Hudson’s Store in the heart of downtown Detroit and a $1 billion MLS stadium project.
The five-bill package, which was first reported by Crain’s Detroit Business, would change the financing requirements for “brownfield” projects (redevelopments on old industrial sites that often necessitate the pricey cleanup of lead and hazardous waste). Gilbert’s company, Rock Ventures LLC, has banded together with economic development organizations across Michigan to push for the bill in the State Senate.
The proposal would allow developers to use both sales and income tax generated by developments on brownfield sites, as long as they invest the minimum mandated amount of private money ($500 million in Detroit, $50 million in a smaller city like Flint). Developers are already collecting new property taxes generated by brownfield redevelopments, so the Gilbert-backed proposal is essentially a ploy to pocket all of the taxes from these developments, keeping them from the general fund.
Gilbert has created his own little fiefdom in and around downtown Detroit, amassing more than 13 million square feet of real estate and paying $5 million for the (unimaginative) naming rights of the city’s streetcar project, the QLINE. (Quicken Loans also contributed $10 million to the construction of the streetcar.) So he stands to benefit from any legislation that will let him divert more taxes from the general fund. In April, with Detroit Pistons owner Tom Gores, Gilbert proposed a $1 billion project centered around a 20,000-25,000 seat soccer stadium, along with three 18-28 story glass towers (one residential, one commercial, and one hotel).