BridgeDetroit: ‘Net loser’: Gilbert’s Hudson building unlikely to meet promised job, tax revenue when GM workers move in
General Motors Co’s anticipated crosstown move from the Renaissance Center to the nearly complete Hudson’s Detroit building puts a high profile anchor tenant in the skyscraper, owned by Dan Gilbert’s Bedrock. But it also puts Bedrock on pace to miss the job and tax revenue creation promises it made in exchange for a controversial $60 million tax incentive in 2022, a new BridgeDetroit analysis finds.
The potential shortfall casts doubt on the basis for taxpayer support for what will be Detroit’s second tallest skyscraper.
Supporters of the tax break insisted at the time that the Hudson’s site would create 2,000 new jobs and net $71 million in new city tax revenue from the additional workers.
But Detroit will not see a net gain in new jobs or local tax revenue for the estimated 850 GM RenCen employees – it simply moves existing jobs from one building to another, which will not generate new tax revenue for the city…
Hudson’s Detroit is on pace to be a “net loser,” said Greg LeRoy, an economist with subsidy tracker Good Jobs First. He reviewed the tax incentive proposal in 2022, and, at the time, labeled Bedrock’s job creation claims “laughable” because office buildings create very few new jobs. Instead, they largely house jobs that already exist.
City officials “rejected” LeRoy’s comments at the time, and insisted jobs would move from outside the city to the Hudson.
“We never like to say ‘I told you so,’ but office space doesn’t create jobs, especially when it’s office space in a market with high vacancy rates, and tenants that move from three blocks away,” he said. “That’s not economic development.”
Read the full story at BridgeDetroit.