The Detroit City Council has agreed to let developers of the contaminated Fisher Body Plant recoup $24.8 million in environmental cleanup costs by paying reduced taxes for the next 35 years to revamp the site into new housing and commercial units.
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Developers Gregory Jackson, Richard Hosey and Kevin Lewand are partnering on the $137 million project being heralded as the largest Black-led development deal in Detroit’s history. Hosey said the team stepped up to prevent the long-idled site from being torn down after paying for an $80,000 study that concluded the Fisher plant is an asset worth redeveloping.
“This is a FUBU product – this is ‘for us, by us,’ and the largest one ever,” said Council Member Scott Benson, who represents District 3 on the city’s northeast side. “This is historic for the City of Detroit and I’m glad to see that you have a development team that’s prepared to be here and prepared to meet our demands when it comes to providing subsidized affordable housing for our residents.”
It would cost about $31 million to clean lead and asbestos on the site, remove contaminated soil, make infrastructure improvements and perform demolition work, according to a brownfield plan unanimously approved Monday during a special session of the City Council.
The council will also consider approval of a 15-year, $13.2 million tax abatement. On Sept. 27, the council is scheduled to vote on the creation of a Neighborhood Enterprise Zone. The State Tax Commission is responsible for final approval.
Fisher 21 Lofts, LLC is seeking to turn the facility into 600,000 square feet of retail and residential space with 433 housing units. Construction is expected to begin next April and finish by March 2025. The site consists of three parcels between Piquette Avenue, St. Antoine Street, Harper Avenue and Hastings Street that were bought from the city for $1 million.
Last week, the council unanimously approved a community benefits agreement negotiated between nearby residents and the developers. It commits Fisher 21 Lofts to contribute $500,000 to a community fund, evaluate the feasibility of a neighborhood farmers market, request an increase in bus lines for the area and to ensure Detroiters have preferred access to jobs, affordable housing units and commercial space.
To address environmental concerns, the benefits deal requires the developers to control airborne contamination during construction, avoid transporting hazardous materials on residential streets and to share environmental reports with residents.
Members of a Neighborhood Advisory Council convened to represent the interests of residents in the project’s impact area approved the community benefits agreement this summer. Malik Wali said in a statement to Detroit’s council that the advisory group “didn’t get everything we asked for” but members consider the deal to be a good one.
“I signed because this represents a step forward,” Wali wrote. “We are counting on the good faith of the developer and, more importantly this City Council, to hold the involved people accountable and maintain that spirit of ‘community first’ throughout this project and for the next 15 to 30 years.”
Halima Cassells, an alternate member of the neighborhood advisory council, told BridgeDetroit she had issues with the community benefits process. She felt the developer did not provide enough information about the project and questioned if the city opened the site to other developers. Cassells also said environmental protections aren’t strong enough; she wanted more robust monitoring of air quality in adjacent neighborhoods to ensure contaminants won’t travel off the site.
Affordable housing commitments were tweaked after residents advocated for more low-priced units. Roslyn Bouier, executive director of the Brightmoor Connection Emergency Food Pantry, said in a statement that the original agreement represented a “clear mismatch between housing needs at the community level and the housing priorities promoted by our elected officials.”
“Those of us who work on the frontlines are calling for a major pivot from the way Detroit’s valuable tax resources are used as tools for economic and housing development,” Bouier said. “The future answer to Detroit’s housing crisis is not in contributing to more speculative real estate projects such as the Fisher Body 21 development but rather in accessible, sustainable and truly affordable housing options supported with our tax dollars.”
Hosey told the council Monday that changes were made through conversations with the Neighborhood Advisory Council.
“Their thoughtfulness and reasonableness and interest in balancing out the need for affordable units, we agreed to that readily,” Hosey said.
Under the approved agreement, 60 rental units will be listed at a reduced price meant to be affordable for people earning 80% of the area median income, which is $50,150 for a two-person household. Studio apartments will cost $1,253 per month, one-bedroom apartments will cost $1,340, and two-bedroom units will rent for $1,600.
Three units will be available for people making 50% of the area median income, which is $31,344. Rent for those units will be set at $783 per month, according to developers.
At-Large Council Member Mary Waters said affordable housing advocates are pushing for more units to be offered to people making 30% to 50% of area median income. She also expressed concerns that many Detroiters can’t afford rents based on 80% of area median income without additional subsidies.
Nicole Sherard-Freeman, the city’s executive of jobs, economy and Detroit At Work, said Mayor Mike Duggan is employing multiple strategies to help Detroiters get better-paying jobs.
“There are about 230,000 unemployed Detroiters of working-age in the city,” Sherard-Freeman said Monday. “While we are only talking about the housing component here, I want you to know the administration is thinking of these strategies in tandem. We have to be sure that there is more housing or affordable housing, opportunities for workforce housing, and we have to be sure that Detroiters are being prepared for the opportunities to earn the income to actually be able to afford both affordable and market-rate housing.”
The property currently generates zero dollars in tax revenue for the city, schools and libraries. The development is estimated to generate $2.5 million in annual tax revenue once the 35-year abatement ends. Developers said 80 full-time jobs and 425 construction jobs will be created through the project.
Benson said the development will be a boon for schools and libraries that are desperate for more funding. Benson has been a vocal proponent of using tax incentives to grow the city’s revenue while some community groups have criticized the practice in council meetings this summer.
“We’re now going to see those taxing jurisdictions receive revenue, and so when we talk about the need for money in our library at the zoo and our schools, this is how it gets done,” Benson said. “Development incentives help us pay the bills. Without this incentive, this deal wouldn’t happen and we would not be able to pay our bills because we need to grow our tax base. We have to attract residents from outside the City of Detroit and keep the residents that we have. We cannot continue to lose them for lack of housing opportunities.”
The Fisher Body Plant 21 has been abandoned for nearly 30 years. City staff said the plant has become “emblematic of Detroit’s decline,” due in large part to its visibility from the high traffic interchange of Interstate 94 and Interstate 75.
The building was constructed in 1919 for auto body-maker giant Fisher Body, which became a longtime division of General Motors Co. Until 1984, the facility’s operations included automotive stamping of special discs and tools, dye sets, jigs and fixtures. A variety of corrosive waste products were created from the site.
Carter Color Coat owned the facility and continued operations that created hazardous waste from 1985 to 1990, until the company declared bankruptcy and abandoned the facility in 1993. It came under the city’s ownership in 2000 and, eight years later, the U.S. Environmental Protection Agency began removing large quantities of contaminated soil, equipment and underground storage tanks from the site.