Amazon’s decision to build a 1 million square foot distribution center in Macomb County certainly qualifies as good news. The $40 million investment planned, creating 1,025 jobs, has Macomb officials beaming with pride.

And yet …

This is another of those Michigan corporate projects that proceeds only because the taxpayers are pitching in millions of dollars to make it happen.

The details of the plan, announced earlier today, add up this way: $4.5 million from the Michigan Economic Development Corporation, $10 million from Macomb County, and $500,000 from the county Department of Roads.

All this for one of the wealthiest, fastest-growing corporations in the world.

The $15 million aid package seems especially difficult to justify for two reasons. Macomb is certainly not a county in economic distress, with an unemployment rate of 3.9 percent, so why does it need the help of $4.5 million in government assistance from the state? Second, the 1,000-plus jobs that will eventually be created represents an increase in county employment of about 0.24 percent. The true figure will certainly be less, as many of the new Amazon workers will come from surrounding counties, not Macomb.

The MEDC grant provides a start-up boost, a performance-based allocation for Amazon, with the state helping the Seattle-based online retailer recruit tech savvy workers. The $10 million from the county will pay for extensive cleanup of the 85-acre, contaminated Shelby Township site.

The vacant land was once the home of a Ford plant, then a converted Visteon auto parts facility, before it closed in 2009 during the recession. The county will incrementally divert newly generated tax dollars from the Amazon center to pay off the cost of rehabilitating the brownfield property.

The $500,000 pledged from the Roads Department will finance various road improvements for the area, at 23 Mile and Mound Road, to satisfy Amazon’s needs for the warehouse and package delivery center.

“This investment is a true example of partnership-driven economic development,” said County Executive Mark Hackel.  “As a result, a formerly idled property will be transformed into a million square foot ‘fulfillment center.’ We are proud Amazon has made its home in Macomb.”

Similar speeches by politicians have become common across Michigan. These public-private partnerships include the Little Caesar’s Arena in Detroit, built by the Ilitch family, and nearby downtown projects put in motion by Quicken Loans’ Dan Gilbert. The subsidies include straightforward financial assistance, property tax breaks and even the diversion of state income tax dollars.
Elsewhere, Amazon now has received $17 million in MEDC grants for three Metro Detroit projects in the past nine months.

Still, the question remains whether the numbers add up to solid economic development policy.

 

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