Brownfield panel backs tax incentives for Henry Ford Health expansion

The Detroit Brownfield Redevelopment Authority voted 7-1 Wednesday to approve an estimated $231.7 million in tax capture reimbursement for a portion of Henry Ford Health’s $3 billion hospital expansion project.

The vote sends the Future of Health Transformational Brownfield Plan to Detroit City Council for consideration.

The plan announced in February and expanded in September has five components: a new research center with Michigan State University, a 400-private room patient tower, a commercial corridor with two new residential buildings and an 800-space parking garage.

The developers are estimated to receive $231.7 million in tax revenue reimbursement over the next 35 years, with $117 million of that from property tax, according to the plan.

The developer investment will be $773 million for the joint Henry Ford/Michigan State University Research Center, three residential/commercial projects and a six-story parking garage. Henry Ford has not sought any tax breaks for its portion of the $2.2 billion expansion.

The brownfield plan builds on the health system's development of the Henry Ford Pistons Performance Center on Second Avenue, completed in 2019. The existing 877-bed hospital on West Grand Boulevard will remain.

DBRA board members Amanda Elias, John George, Jose Lemus, Sonya Mays, Pamela McClain, Juan Gonzalez and Ray Scott approved the incentives. Eric Dueweke voted against the proposal while Maggie DeSantis abstained.

Prior to the vote, DeSantis said she applauded Henry Ford Health System for its work to expand in the city.

“Can anybody name another health system is actually expanding a hospital inside the city limits?” she said. “I don't think so.”

DeSantis, however, said she was hung up on the housing component of the project. She took issue with the development team not agreeing to contribute financially to the Affordable Housing Leverage Fund and the Detroit Housing Trust Fund in its discussions with the Neighborhood Advisory Council when crafting its Community Benefits Agreement.

“What I'm really talking about is can we get beyond hundreds of luxury rental units, and a few relatively few affordable rental units and really try to get to the deeper problem in this community,” DeSantis said. “Two million (dollars) in home repair. It's good. It's wonderful. It's not nearly enough. The fact that you opted not to contribute to these other two funds to me, it's just a real shame. It's a real shame.

"(Pistons owner) Tom Gores could write a check for that amount of money right now … I am just having too hard a time with the housing piece," she said. "And I've said this to very many people, I have an extremely hard time understanding why a transformational brownfield benefit is even necessary or important. This is a huge subsidy."

Denise Brooks Williams, executive vice president and CEO of care delivery system operations with Henry Ford Health, said the project allows them to bring a live-work-play environment to the area. The new housing, led by Gores, will have 662 new units adjacent to the hospital expansion. Twenty percent, or 133 affordable units, will accept Section 8 vouchers.

“We know that that is a huge part of the discussion and dialogue that we've had around the housing, but if you look at the vision and the conversations that we've had, our team has spoken to over 1,000 individuals, been to numerous community meetings and we talked to our own staff, so we know that there still is a gap around both affordable and market-rate housing in that community,” she said. “And you all, I know, look all across the country at what it is to have a world-renowned research academic environment, and people want to be able to live and work and walk in that area where they may be serving. So we believe that the housing is a critical component to this and we thank the Pistons for being a part of that.”

During public comment, Theo Pride, an organizer with activist nonprofit Detroit People's Platform, spoke in opposition to the tax subsidies and the housing portion of the project.

“The hospital expansion is great, of course, along with the research center,” he said. “All great. Thumbs up. But as it concerns the tax incentives being considered here for the Future of Health development, what we should be focused on and evaluating is the merit of the housing piece being done by the Pistons and Tom Gores, which is getting more than 80% of tax incentives for this whole project.”

Pride noted issues he had with the housing.

“I think there are a few problems to consider,” he said. “One — the luxury housing here does not fit the needs of the neighborhood or the city as a whole. This looks like workforce housing … and the units are small and too expensive, expensive for the average working class Detroiter with family and children. Two — the cost of a project looks to be excessively high for the Detroit market compared to similar developments.”

Pride also said he feels there were not enough protections for existing residents living in an impact area that includes seniors, families and low-income renters.

“We know projects like this initiate gentrification, which spurs displacement,” he said.

John Perkins from the Michigan Regional Council of Carpenters & Millwrights spoke in favor of the project.

“We know that these projects like this put food on our table,” he said. “We know when developers like the Pistons and Henry Ford Health develop, not only do carpenters go to work, Detroiters go to work. We know that opportunities like this allow our members to create a sustainable lifestyle that allows them to build a middle-class future for not only them but their family.”

If approved by the Detroit City Council, the brownfield plan would also need approval from the Michigan Economic Development Corp.'s governing body, the Michigan Strategic Fund board.

cwilliams@detroitnews.com

Staff Writer Sarah Rahal contributed.