By Tina M. Patterson, Esq.
President, The PuLSE Institute
After several delayed votes and weeks of intense public pushback, the Detroit City Council finally voted to approve $60Million in tax breaks to Bedrock, owned by billionaire Dan Gilbert, for its Hudson site project in downtown Detroit.
The July 26th vote saw the Detroit City Council approve the deal by a narrow 5-4 majority, with Council Members Mary Sheffield (President), Fred Durhal, Scott Benson, Mary Waters, and Coleman Young, Jr. hastily voting in favor of the tax breaks. Council Members who voted against the deal were James Tate (President Pro Tem), Latisha Johnson, Angela Whitfield-Calloway, and Gabriela Santiago-Romero.
In the heat of intensifying public pressure, the Council wavered on whether to grant the proposal by delaying the scheduled vote week after week until it was tabled indefinitely in June.
Gilbert, the wealthiest man in Michigan, has been at the center of debate regarding the inequality of Detroit’s economic recovery, which has seen a financial resurgence in the downtown area, where Gilbert owns many properties, while neighborhoods, which are majority Black, remain in need.
Furthermore, Gilbert has been a recipient of numerous tax breaks, including the Opportunity Zone tax breaks created in 2017. A ProPublica report revealed that while the idea behind the Opportunity Zones was to “grant lucrative tax breaks to encourage new investment in poor areas around the country, experts say two of the downtown Detroit tracts are islands of wealth in the city, one of the poorest in the nation. They are significantly wealthier by median income than the surrounding area.” Gilbert owned property sits in these wealthy tracts, including the construction on the historic Hudson’s department store site, which the Detroit City Council has now granted an additional $60 million in tax breaks.
Aside from the debate of the vote itself, with the central premise questioning whether it was necessary to grant a billionaire more public tax breaks while Detroit mires in inequality, the vote was also wrought with controversy due to its secrecy, as at least two City Council Members voted against the proposal for its lack of transparency.
Council President Pro Tem James Tate, who welcomed the agreements within the proposal, nevertheless rejected the vote, noting that the public had not been notified that the vote was on the council agenda for the day. Tate offered further explanation, stating “People should know what we’re going to vote on before we come into the committee of the whole, especially an item this large.”
Additionally, Council Member Angela Whitfield-Calloway rejected the vote and stated that she had not been aware of the amendments to the community benefit agreements before Tuesday’s vote.
Council Members who voted in favor of the new Bedrock deal hailed the enhanced community benefit agreements that apparently accompanied this latest attempt at the vote. However, such agreements in exchange for tax breaks often remain unfulfilled, with no serious enforcement efforts to ensure the community actually receives the agreed upon benefits.
For instance, the construction of Little Caesar’s Arena in downtown Detroit included more than $250 million in taxpayer-backed bonds to be used to help pay for construction. As part of the deal, Olympia Development had to agree to a city-imposed requirement to hire at least 51 percent of Detroiters at the site. However, in 2017, contractors hired to complete the work were fined a total of $2.9 million for frequently not hiring at least 51 percent of Detroiters according to the agreement.
One Council Member who was impressed with the additional community benefits agreements to this latest proposal was Mary Waters. In what was viewed as a most shocking maneuver, Waters, who was recently elected through grassroots efforts in November, voted in favor of the Bedrock deal in what has been perceived as a turncoat vote. In a Detroit News op-ed published two weeks before Tuesday’s vote, Waters scathingly noted that previous councils may have rubber-stamped the Bedrock request while also expressing that “any project that receives public money must benefit our entire community.” Doubling down, Waters wrote that she would “not entertain any additional public assistance for this project without concrete guarantees of investments to help improve our entire community, not just downtown.”
However, after voting in favor of the deal, Waters reversed course by noting that this particular deal could not be used outside of the downtown area. On the contrary, Waters stated, “I want people to understand that the developers in the downtown area are who is (limited) to this money. These particular captures cannot go into the neighborhoods.”
It is a stark contrast from the position Mary Waters has expressed since joining the City Council. In fact, her op-ed just two weeks prior specifically stated that “Any project that receives public money must benefit our entire community.” If Waters felt so strongly about this need for the entire community to benefit from the deal, she could have simply voted “No.”
This latest City Council vote serves as a woeful gauge on the current state of political affairs in the city of Detroit. Recently named as one of the world’s greatest places by Time Magazine, Detroit city leaders and influencers cling relentlessly to this projected media narrative of glory while continually acting against the best interests of the residents of the city of Detroit.
As an example, the Detroit City Council has once again voted to grant millions of public dollars to a billionaire developer, while failing to provide any relief whatsoever to the homeowners who were over-taxed upwards of $600 million in property taxes. This glaring issue was initially reported in 2020, just before the dawn of the Covid-19 pandemic. Despite a flood of federal pandemic relief dollars and now additional tax breaks to real estate developers, the city has not come up with even ONE solution to provide redress to aggrieved, over-taxed citizens.
The façade of Detroit as a world class destination will lose its luster and be exposed worldwide if the woes that constantly plague the city are not adequately addressed by city government.
Aside from high taxation, Detroit is a city suffering from high poverty rates and low-quality public education. Coupled with rising inflation that is causing increased pricing triggered by the Covid-19 pandemic, the city faces economic calamity if proper capital and attention are not adequately channeled into the city’s most sustainable and valuable resource- its people.
The future of the city is on the line every day that the Detroit City Council, Mayor of Detroit Mike Duggan, and other leaders in City government and civil leadership fail to direct sustained attention to the problems plaguing the neighborhoods.
The city has continued to lose residents despite its false image of popularity in the media, and the city continues to rank among the largest poverty cities in America, despite its fabricated appearance of opulence and economic success, represented by Bedrock’s Hudson site project. When completed, it will be among the tallest skyscrapers in the city. An empty feat, but the perfect portrayal to represent the immense concentration of wealth in a singular location in the city, while the neighborhoods that must be sustained by people for the city to truly thrive, continue to suffer economic neglect.
Attorney Tina M. Patterson, a racial justice advocate and former federal government attorney for the Social Security Administration, is the President and Director of Research at The PuLSE Institute, Detroit’s national independent anti-poverty think tank. She is also the Principal Attorney at the Patterson Justice Counsel PLLC.
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