DETROIT -- The tax incentive package for Fiat Chrysler Automobiles' $1.6 billion conversion of two Detroit engine plants into a new Jeep assembly plant could top $400 million after additional tax increment financing measures are tacked onto the deal.
The Michigan Strategic Fund's board on Tuesday approved a plan for redevelopment of the automaker's idled Mack Engine II plant at Mack and Conner avenues that will capture $93 million in local and school taxes generated at the site over 30 years.
Those taxes will go toward repaying the Detroit Brownfield Redevelopment Authority, the city of Detroit and the Michigan Strategic Fund for loans all three governmental entities are incurring to develop the plant site for the automaker, according to the Detroit Economic Growth Corp.
In May, the Michigan Strategic Fund and City Council approved a tax incentive package for FCA's $4.5 billion investment across five manufacturing plants in Southeast Michigan that was worth $319 million. That package included a $20 million loan from the Michigan Strategic Fund's investment fund and a $7.5 million loan from the City of Detroit.
"The loans were used for site preparation and environmental remediation costs of City owned and acquired land assembled for the FCA project," Charlotte Fisher, a spokeswoman for the city's growth corporation, said in an email to Crain's Detroit Business, an affiliate of Automotive News.
Fiat Chrysler's tax incentives now total $384.5 million and could climb to as high as $422 million if the Michigan Department of Environment, Great Lakes, and Energy approves an additional $37.83 million application for tax increment financing.
The automaker submitted a draft plan to that state agency on June 24 that was "missing a significant amount of environmental data for the properties that are included in the project," spokeswoman Jill Greenberg said in an email.
FCA has since submitted additional information and the state agency is reviewing the application for the incentive, Greenberg said.