SOUTHFIELD Tax breaks have been a controversial tool for luring business to a community, because frequently that gain is represented by a loss for the community from which the business is relocating.
But those tax breaks, and other development tools, are resulting in several large businesses planning to locate in Southfield, bringing with them jobs that are expected to have a trickle down stimulus for other businesses such as restaurants in the local community.
The two approvals granted at Monday’s City Council meeting were accompanied by rave reviews for the city’s business development manager, Rochelle Freeman-Katz.
“It was an exciting evening,” admitted Freeman the next morning.
An opponent of such business tools, Councilman Sid Lantz, left the meeting before the discussions came up.
There was perhaps special satisfaction Monday night with the approval of a personal property tax exemption for Covisint Corp., because it marks a reversal in what had become an exodus of firms like Blue Cross which moved from Southfield to Detroit.
Covisint is moving its corporate headquarters from Detroit back to Southfield, where it originally had been. The global IT company started in the auto industry, and it is now a cloud-based company with a reported 21 million unique user IDs serving 212,000 organizations, a representative told the council.
“We’re excited to be back,” the representative said, adding that “Southfield is the center of the (company’s) employee universe” in terms of where they live.
City Councilman Jeremy Moss talked about Covisint’s decision to return, saying that the return will “help us get the word out that we are open for business.”
By the numbers
The company will renovate vacant space in the Travelers Tower II building, making a $5.7 million investment by renovating 50,000 square feet of space, and bringing 250 high-paying jobs many of which carry a salary of $90,000, according to the company. The move was possible through the establishment of an Industrial Development District for both Travelers buildings.
Councilwoman Sylvia Jordan asked Covisint to encourage its employees to live in Southfield, which had been hit by the largest number of foreclosures in the state in the Great Recession.
The tax exemption is being made under a state law, PA 328, with a payback to the city of seven years, also the tax abatement is approved for 10 years, according to Freeman. Should the company leave, the company would be required to pay back all of the real property taxes abated, according to the agreement.
Covisint’s return was also saluted by Mark Adams of Oakland County, who welcomed the firm back and told the council that the county had “really worked hard to lure them back.” He said the move is important for business diversification.
A company spokesman said that the it is active in community service, supporting such causes as Blight Busters, Lafayette Gardens and Easton Academy in Birmingham, and plans to do the same in Southfield.
