The city of Detroit and Fiat Chrysler officially have a deal for a $2.5 billion investment in facilities on the city’s east side—including its first new auto assembly plant in more than three decades.
Fiat Chrysler says it will expand its Jefferson North plant, and revive and expand the defunct Mack Avenue Assembly facility. The company says that should create nearly 5,000 new jobs.
One condition of the deal is that the city had to acquire more than 200 acres of land for the project. Mayor Mike Duggan said Friday it had achieved that mostly by arranging land swaps with the area’s handful of property owners, who will get other parcels of city-owned land throughout Detroit.
“We said, what would happen if we swapped our vacant land as much as we possibly could for land that FCA needed? So we succeeded in reaching agreements where we swapped 155 acres of property,” Duggan said.
But the city will also pay out more than $48 million in cash to some of those property owners. $43.5 million of that goes to Crown Enterprises, a real estate arm of the Moroun family’s business empire. The Morouns also own the Ambassador Bridge, and around 600 other properties throughout the city. They will get another 117 acres of property through land swaps for their piece of land, an 80-acre former industrial site.
The city and state have jointly agreed to pick up site preparation and environmental cleanup costs, pegged at nearly $60 million, bringing total land-related costs for the project to almost $108 million. Duggan says money for the land deals won’t come from the city’s general fund.
The city and FCA will also split the cost of a $35 million community benefits package for the surrounding neighborhood. Those benefits include money for demolitions, home repair grants, road improvements and job training opportunities.
There are no hiring preferences or employment quotas for Detroit residents. However, Duggan says there will be an early application window where Detroiters will get a chance to apply for jobs before the general public.
“So the quota in significant part is on us. It’s our job to recruit and have qualified Detroiters ready to go,” said Duggan.
The Detroit City Council needs to approve the deal. Fiat Chrysler hopes to break ground on the project as soon as next month. The timeline for completion and opening is December 1, 2022.