Last November, General Motors indicated it was planning on moving more than 1500 employees out of its downtown Detroit headquarters. Since then, state and local officials have worked out a substantial tax break for GM to keep those workers in Detroit.
“It came down purely to a business decision,” said Tom Wilkinson, a GM spokesman. “The move was going to cost tens of millions of dollars and the decision was made that right now the best thing to do was spend that money on product and on efforts to support our dealers and reach customers.”
“Today’s decision by GM is great news for the city of Detroit,” said Detroit Mayor Dave Bing. “Retaining jobs is a top priority of my administration and I appreciate their commitment to the city.”
The initial plan was to move nearly half of GM’s 5000 workers out of Detroit to other existing locations, like the company’s technical center located in the suburb of Warren, Michigan. Workers will now be consolidated in the RenCen to make room for possible new tenants. The RenCen is comprised of seven towers, two of which were once filled with GM offices. Reports now say that only one of the towers is comprised of GM staff.
The deal is all but necessary for the ailing city of Detroit. With some $300 million in debt, the lack of $6 million in annual tax revenue generated from GM would be yet another blow to the city. Millions in incentives may be offered to other businesses to attract them to the downtown location.