Detroit, Michigan — On Tuesday this week, Fiat Chrysler Automobiles saw their efforts approved by the city of Detroit. The company received the final nod for its new Jeep plant project, as well as the permission to start working on four other sites in the industrial region.

In the beginning, among other initial steps, Fiat Chrysler Automobiles (FCA) had to go through a series of land swaps in order to have enough land surface for the planned Jeep plant to be built. Detroit City Council approved these changes in ownership near Mack and St. Jean on the east side of the city. Following the land swaps, the Michigan Strategic Fund allowed for changes in tax. By providing incentives in the form of lower taxes, they’ve made it possible for the FCA to start working on the new plant.

The Jeep plant, together with the planned expansion of the Jefferson North Assembly Plant, which is nearby, the Council is hopeful that the new facilities will create around 5,000 new job offerings. Additionally, the city will be injected with an estimated $2.5 billion in investments. However, this is not where the FCA plans stop. They intend to commit to new projects in Warren and Sterling Heights, which will represent an income of billions more through investment.

Governor of the state of Michigan, Gretchen Whitmer, together with the Detroit Mayor, Mike Duggan, have welcomed these investments. Both people in power see these investment approvals as a historic decision, as well as a continuation of the state’s legacy. In their own words, with the new plant, Michigan and Detroit keep expressing their industrial might. Jeff Mason, CEO of the Michigan Economic Development Corporation, joined them in their praising, as he stated that the whole state of Michigan would benefit from this new agreement.

Tax Incentives

Taxes word in dollarHowever, as always, there were those who opposed the approvals. Several members of the City Council were against some of the aspects of this deal which included many different sections. However, their votes against weren’t enough to put a halt on the plan. Their main concern was with how much money Crown Enterprises received. Crown Enterprises represented the final obstacle in FCA’s efforts to acquire enough land.

In the wake of FCA’s $2.5-billion investment in the Jeep plant and the Jefferson North Assembly Plant, the board of strategic fund chose to provide many incentives to the company. After a board meeting in Lansing, they’ve come out with a decision to approve around $140 million in incentives to the FCA. They’ve provided such a helping hand to the company due to the belief that the projects will create just under 5,000 jobs.

The $2.5-billion investment goes in two parts. The existing Jefferson North Assembly Plant will see $901 million injected into it, which will create 1,100 jobs spaces. The new Jeep plant they plant to erect will cost $1,6 billion, and there will be 3,850 jobs available at Mack and St. Jean. The Detroit City Council approved the deal after a series of votes.

As was the case with many other projects in the past, tax incentives the FCA will receive will allow the company to save millions of dollars which they would have to pay in taxes otherwise. With such savings, this investment has become financially reasonable for the FCA.

Overall, the state is expected to offer over $200 million in incentives to the company. The FCA also planned improvements to its other plants in Warren and Sterling Heights, for which the Strategic Fund has approved further $28 million in tax incentives.

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