Council’s turn-back of transit center funding prompts fallout

By: Terry Oparka | Troy Times | Published December 27, 2011

 This 2.41-acre site at Maple and Coolidge will remain vacant after the Troy City Council voted not to proceed with plans for a transit center Dec. 20.

This 2.41-acre site at Maple and Coolidge will remain vacant after the Troy City Council voted not to proceed with plans for a transit center Dec. 20.

Photo by Deb Jacques

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After the Troy City Council turned down $8.4 million in federal funding to construct a transit center, a lawmaker urged the governor and transportation officials to keep the funds in Southeast Michigan, and a business leader called a halt to further expansion in the company’s Troy facilities.

The Troy City Council rejected the funding and transit center plans in a 4-3 vote at a Dec. 19 meeting. Mayor Janice Daniels, and councilmen Wade Fleming, Doug Tietz and Dave Henderson nixed the plan, citing ongoing operation expenses, use of federal funding on principle and the cost of the center in light of current mass transit use. The federal funds cannot be transferred to other Troy projects.

On Dec. 20, Troy Chamber of Commerce President Michele Hodges received an email letter from Frank Ervin, manager of governmental affairs at Magna Corp., an auto parts manufacturer with 300 facilities worldwide, more than 100,000 employees and more than $24 billion in sales in 2010.

“After watching the disappointing behavior of City Council and being exposed to some of the individual actions such as those of the mayor and Councilman (Wade) Fleming this morning, I am drafting a memo to all Magna group presidents and our Magna corporate executives strongly recommending that Magna International no longer consider the city of Troy for future site considerations, expansions or new job creation,” the letter states.

“I have also recommended that wherever and whenever possible we reduce our footprint and employment level in Troy in favor of communities who act in the best interest of both the residents and business, and not simply use their public position to advance their own private agenda.”

This past April, the Michigan Economic Growth Authority approved a three-year $1.5 million state tax credit for Magna in support of plans to invest $765,000 in its Troy facility for a new division, which was estimated to create 200 new jobs. Michigan was chosen over competing sites in Ontario, Ohio and Indiana. The company, which is based in Aurora, Ontario, leased 9,738 square feet at the Troy Technological Park, off John R, between 14 Mile and Maple, for powertrain operations. General Motors had previously occupied that space, which had since been empty.

In October 2010, the Troy City Council approved an 11-year, total abatement of $344,230, of which $109,232 is city taxes, in support of the Magna’s investment of $8.7 million in machinery and equipment for the powertrain operation. That was estimated to add 103 jobs to the existing 93 positions already in Troy and result in an additional $54,616 collected city taxes. MEGA also approved a $5.6 million, seven-year state tax credit for Magna in support of the company’s $49.2 million investment to expand manufacturing, engineering and product-testing operations in Auburn Hills, Troy, Lansing and Shelby Township.

U.S. Rep. Gary Peters, D-Bloomfield Township, said he worked very closely with the city to secure the federal funding for the transit center, which had strong, unified support from the business community. Peters wrote letters to Gov. Rick Snyder and U.S. Transportation Secretary Ray LaHood Dec. 20 urging them to keep the $8.4 million in the metro Detroit area.

He said Michigan Department of Transportation officials, who would have administered the funding, could not recall a city ever returning federal funding. Peters noted that the state of Michigan was able to garner $220 million to improve the rail line from Pontiac to Chicago when the state of Florida turned back the funding.

“Transit centers got funded along that line,” Peters said. “I’m going to work very closely with the transportation secretary to see what we can do to put other projects before them. Other communities would love to have funds to improve facilities.”

Peters said that the plans had included transit bus lines connecting the transit center in Troy to Macomb County.

“It doesn’t make any sense to do that now,” he said. “I always believed the rapid bus line should go up to Pontiac.”

He said the evidence is overwhelming that where investments are made in public transit systems, there are huge returns. “It really spurs the economy and is not something we’ve had in the history of Detroit. It (economic development) goes hand in hand. The Troy transit center was a piece of that. I’m certainly disappointed in the council’s decision.”

He wrote to LaHood: “While I am deeply disappointed by the City Council’s decision, I know that there are many cities in Southeast Michigan that support regional transit and want to see it succeed. Royal Oak is an enthusiastic partner in the goal to provide regional transit, and I believe a new transit center in Royal Oak’s vibrant downtown would be an ideal access point to the Bus Rapid Transit or Woodward Avenue Light Rail.”

In his letter to Snyder, Peters also pitches a new transit center be built in Royal Oak using the federal funds.

Daniels was out of town and could not be reached for comment before press time. Phone messages seeking comment were left for Fleming and Tietz, who did not contact the Troy Times before press time.
 

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