The City of Detroit reported it has the key acquisitions of nearly 215 acres of land needed for the construction of a new $1.6 billion Fiat Chrysler Automobiles assembly plant on the city’s east side.
According to Mayor Mike Duggan FCA plans to invest $900 million to retool and modernize its Jefferson North Assembly Plant, for a total investment of $2.5 billion and the creation of nearly 5,000 new good-paying jobs in the city.
The City already completed deals with several major property owners in the footprint of the project, including DTE, the Great Lakes Water Authority and Hantz Farms, the Mayor explained. The key piece was a deal reached between the City and Crown Enterprises to secure the final 82 acres of land required for the project. The City also reached agreements with the owners of several smaller parcels located within the project’s footprint including Soave Enterprises, Mayor Duggan said.
The total cost of the land deals comes to $107.6 million and includes approximately 155 acres of city and Detroit Land Bank Authority property. The cost of the land deals will be split roughly equally between the City and State of Michigan. Here is the breakdown of the city’s portion:
City of Detroit plans to invest $50.6 million; $36 million from uncommitted City of Detroit bond funds, $7.5 million loan to the Detroit Brownfield Redevelopment Authority, $7.1 million from the sale of the City’s Millennium Garage. The City also has requested $57 million in grants and loans from the State to support site preparation.
“We appreciate the tireless efforts of Mayor Duggan and his administration and the Neighborhood Advisory Council to reach this important milestone,” said Mark Stewart, COO, North America, FCA. “We look forward to working with City Council, State of Michigan and the Michigan Strategic Fund Board as they consider the merits of this deal, which will create thousands of good-paying, union jobs and expand our manufacturing footprint in the state and city we call home."
According to the Mayor’s office, the project will now go to City Council for approval, as will the $35.2 million community benefits agreement, approved last week by the Neighborhood Advisory Council. The land deals also must be approved by the Detroit Brownfield Redevelopment Authority, which will transfer the properties to FCA.
If the elements are all approved by City Council and DBRA by mid-May, then, per its agreement with the City, FCA would proceed with its plans to convert the two plants that comprise the Mack Avenue Engine Complex into the future assembly site for the next-generation Jeep Grand Cherokee, as well as an all-new three-row full-size Jeep SUV and plug-in hybrid models. FCA will also retool and modernize JNAP for continued production of the Dodge Durango and next-generation Jeep Grand Cherokee.
If approved, construction of FCA’s new assembly plant would begin in second quarter of this year and would mark the first time in nearly 30 years that a new assembly plant was built in Detroit. It would also mark the first new assembly plant to be built in Michigan in the past 13 years. Only five new assembly plants have been built in the United States since 2011.
Mayor Duggan said, “This simply would not have been possible without the faith that FCA’s CEO Mike Manley placed in the people of Detroit, the tremendous support of the State, and the cooperation of the property owners who understood the rare opportunity this represents for our city and worked with us throughout this complicated process.”