Ground Effects LLC, which is building a new facility at 13750 Rotunda Drive, in the newly established Rotunda and Schaefer industrial development district, to install spray bed liners, vehicle customization and upfitting for the Ford F-150 pickup, was denied its request for an industrial facilities tax exemption at the Oct. 26 Dearborn City Council meeting.
Promised jobs with lower wage posts may replace union positions
By SUE SUCHYTA
Times-Herald Newspapers
DEARBORN – Ground Effects LLC was denied its request for an industrial facilities tax exemption for its new building at 13750 Rotunda Drive during the Oct. 26 City Council meeting.
The application was for its new real property industrial leased facility in the recently established Rotunda Drive and Schaefer Road industrial development district, where it plans to install spray-in bed liners, accessory vehicle customization and upfitting for Ford’s popular F-150 pickup.
In its Sept. 17 request, Ground Effects said the proposed $12 million investment retains 120 jobs and creates 30 new jobs in Dearborn. The company’s requested tax savings would be $500,000 over an 11-year period, which includes one year for construction and 10 years for the abatement, of which $200,000 would be the city’s share of the abatement.
The City Council had 60 days from the time of the Sept. 17 request to respond, and must provide the reason for its denial in writing.
Dearborn resident Jamal Makled, who represents United Auto Workers Local 600, said the tax exemption that Ground Effects LLC is requesting is not warranted.
“They are low-paying jobs, and those workers would not be able to buy homes, let alone rent in the city of Dearborn,” he said. “Those 30 jobs are CBA (collective bargaining agreement) jobs that belong to Ford Rouge and we are going to be taking those issues on.”
Makled said with the city’s issues with flooding, every tax dollar is needed, and he called the request an example of corporate greed.
Labor law attorney Bob Fetter, of Miller Cohen PLC, who represents UAW Local 600, said there were some questions about Ground Effects LLC and its treatment of hazardous chemicals at its current Dearborn location, and asked the City Council to consider why the company deserved a half million-dollar tax abatement, and asked them to deny it.
He said the city would get 30 new jobs in the next few years that pay $14 to $15 per hour from Ground Effects LLC, and said people were at the meeting who could testify to Ground Effects’ negative treatment of its workers.
City Council candidate Samraa Luqman said residents have been complaining about their high taxes, so for a corporation to come in and ask for tax cuts is “atrocious.”
“This was not an industrially zoned property – this was our ball fields, this was where we played baseball,” she said. “Not only was it taken away, but green space was taken away, and we know we have an issue with flooding and green infrastructure being reduced.”
Luqman said the city needs more businesses to come in that will reduce the residential tax burden.
“This area should never have been rezoned as an industrial district,” she said. “It was our ballfields, and they do not deserve tax credits for taking that away from us.”
Council President Susan Dabaja said she was hesitant to rule in favor of the tax exemption.
“When you are giving a tax abatement to a major corporation, you are looking to see what the benefit is in exchange for that,” she said. “Choosing to stay in Dearborn is one thing, but telling us that you are going to be creating 30 new jobs, but it sounds like taking those jobs from another company in Dearborn, at a lower paying wage, that is a significant concern for me.”
Dabaja said she heard conflicting stories about safety at Ground Effects LLC, and she is aware of its Occupational Safety and Health Administration violations.
“I do believe that is something to be addressed by OSHA, not this body, and so, I don’t want to focus on that so much,” she said, “but the idea that you are going to create 30 new jobs, when really what you are doing is taking 30 jobs from another location, that plays a significant role in how I feel.”
Councilman David Bazzy said it is important that cities and states have clear guidelines to encourage businesses.
“Recently, the largest two investments by our largest taxpayer in this community went to Kentucky and Tennessee,” he said. “They didn’t go to Kentucky or Tennessee because they were looking for a better workforce, or they like warmer weather, they went to Kentucky and Tennessee because of the business climate in the state of Michigan and the cost of business here energy-wise and tax-wise.”
Bazzy said when government tries to dictate policy to businesses, they will react by leaving.
“So, if that is not a wakeup call for everyone in the state of Michigan and communities like ours, to the future of high-paying, high-tech jobs in the EV (electric vehicle) manufacturing world, it should be,” he said.
Bazzy said it is not the council’s responsibility to determine what a company pays its employees.
“It’s a living wage that someone has to determine whether they are going to work for or not work for, and I would beg to differ that anyone is going to work for $14 an hour, because I can’t get anyone to come to work for $19,” he said. “I have 15 openings, and I can’t get a $19-an-hour worker with benefits to come. That’s today’s world.”
Bazzy said he doesn’t know whether or not Ground Effects is trying to eliminate UAW jobs. He added that the Rotunda ball fields were abandoned years ago by Ford Motor Co., and the area brought no tax dollars into the community.
He said he is against granting the tax exemption because there is nothing to convince him that it is needed.
“It’s not looking to me like a significant (number) of incremental jobs that come forward,” he said. “I am all for them being there, I am all for them spending $12 million, so that a lot of that investment goes to community partners around here, and I am for them bringing that business to this area and being a major partner with our largest taxpayer.”
Bazzy said he is opposed to granting the tax abatement.
“I think we need to understand, as businesses come forward to this body, and look for abatements, the crucial issue is that there are very few businesses that are going to grow their business, or open up additional business without some benefit back to the business,” he said. “A community that stops being business friendly wakes up with no business.”
Councilman Michael Sareini said jobs are a driver for incentives, and that these are considered low-skill and low-paying jobs.
He said he was also concerned that there were no criteria that set the number of jobs, so if Ground Effects LLC did not create a certain number of jobs, it would not come back before the council, nor would it lose the tax exemption.
“I am also concerned about the valuation of the property, too,” Sareini said. “The tax rate is very low on a ballfield and now it’s a site, but our assessor has indicated that state law requires you to go by the value of the property, not the cost, but that is not how we treat our residents that remodel, so that’s what bothers me, too.”
Sareini said he doesn’t believe that businesses should be treated better than the residents.
“The fact that this body has no control, going forward, on this exemption, for 10 years, if the criteria, the jobs, weren’t met, and Ground Effects indicated that this was a very low-skilled job, that it was just pre-taping vehicles, did not sit with me as well, that this was something that would earn a tax credit of this magnitude at this time,” he said.