Dream or Reality? Chinese firm really may outsource to Detroit.
The message of the much-missed "Outsource to Detroit" banner came a little closer to reality today as the Detroit Economic Growth Corporation (DEGC) announced a deal with Chinese parts maker YFS today will bring a new manufacturing plant and up to 160 new jobs to the motor city. The City of Detroit and the Michigan Economic Development Corporation made this possible via a $1.3 million Michigan Strategic Fund Business Development Program grant to YFS Automotive Systems, a Chinese firm that makes automotive fuel systems. It's not just a state handout—YFS brings $26.9 million of its own cash to in Detroit and has plans to build a 150,000 square foot fuel system components plant. The DEGC says the facility will employ 50 workers to start, and as many as 160 when it goes fully operational. While the site for the plant is still TBD, DEGC officials say it will have space for a 100,000 square feet of expansion.
While this seems like a fine idea, the DEGC's plans don't always pan out quite the way they're outlined in press releases. Last summer, Metro Times reported on an epic DEGC fail involving two Detroit developers the mostly publicly-funded agency essentially pitted against one another. The obscenity-laced, name-calling email exchange between developer Jonathan Holtzman and Anthony Pieroni, owner of 139 Bagley, known for its "HOPE" mural, came to light as part of a lawsuit between the city of Detroit and Pieroni, who countersued naming the DEGC and an entity controlled by the DEGC, the Detroit Downtown Development Authority (DDA). The DEGC receives most of its funding through tax dollars, but its meetings aren't open to the public, and some say that the agency facilitates sweetheart deals for Detroit billionaires like Mike Ilitch and Dan Gilbert. Though the entity and its ancillary agencies will have control of at least $1 billion in development funds over the next three decades, its records aren't subject to Freedom of Information Act requests for some strange reason.
That said, the DEGC also proved instrumental in rehabbing the Book Cadillac and the development of the casinos, and has assisted with smaller—though clearly vital—projects in the city, including providing $1.5 million to upgrade the city's "avenue of fashion," and is spearheading the redevelopment of the Stone Soap Building by the riverfront into mixed use buildings that guarantee 20% affordably housing.
While nothing is certain where Detroit development is concerned, Mayor Mike Duggan fully supports the partnership with YFS. "This is an important step for YFS and Detroit. Manufacturing investments can provide good opportunities for Detroiters, and Detroit has great potential for attracting more investments and creating even more jobs in the future." The $1.3 million in public funds aren't enough for the Chinese firm, though. According to the DEGC, in addition to the cash from the Michigan Strategic Fund, YFS will also ask for a tax abatement from Detroit City Council and help from Detroit Employment Solutions Corporation (DESC) to "develop its workforce." The DEGC says YFS plans on opening its Detroit facility sometime in 2017.
·About YFS [YFS]
·Outsource to Detroit Banner takes a Dramatic Tumble [Curbed Detroit]
·Pulling Back the Curtain on the Detroit Economic Growth Corp [Metro Times]
·Lawsuit Raises Allegations Against Duggan, DEGC [Metro Times]
·Detroit gets $1 for Arena Lots, Everyone else gets Millions [Curbed Detroit]
·DEGC Progress Report [DEGC]
·DEGC Offers $1.5 Million to Upgrade Avenue of Fashion [Curbed Detroit]
·DEGC Taking Bids on Redevelopment of Stone Soap Building [Curbed Detroit]