Detroit City Council rejects American Axle’s renaissance zone tax exemption

Article by Christian Andrei, on December 12, 2011

American Axle & Manufacturing Holdings Inc. wants the auto supplier's renaissance zone tax exemption extended but the Detroit City Council has unanimously rejected this request. American Axle hoped to extend the exemption through 2018 by pledging to spend $6 million to improve its global headquarters on Holbrook Street and to open 20 jobs in information technology.

The City Council wouldn’t agree to the pleadings delivered by Steven Keyes, American Axle's administration and legal executive director. According to Keyes, American Axle will give up three prior abatements amounting to $381,000 and will pay back other abatements given in 2008 that were linked to the creation of jobs.

But council members were still upset with the laying off of over 1,000 workers at American Axle's Detroit manufacturing complex since 2008 after the council moved to extend abatements that represented savings of up to $534,000 each year for the past decade. In addition, Keyes said that American Axle won’t repay the city if it doesn’t get the extension.

But the council was informed by Irvin Corley Jr. of the council's fiscal analysis division that a claw-back is allowed since these abatements were linked to job creation. The council considered the extension due to American Axle's intention to lease 300,000 square feet of its Detroit plant to a new joint venture on trucking parts.

This venture is Detroit Manufacturing Systems LLC, created by CEO Andra Rush of Wayne-based Rush Trucking Inc. and another partner that has yet to be determined. The City Council documents show the new company’s plan to create 450 jobs for the new site. [source: Crainsdetroit]

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