GM accused of ‘extortion’ over threat to tear down Detroit’s tallest skyscraper | Detroit

General Motors is threatening to tear down Detroit’s tallest skyscraper currently housing the automaker’s headquarters if taxpayers don’t contribute $250m in subsidies for a renovation, a move that critics labeled “extortion” and has generated public outrage.

The riverfront building, called the RenCen, is the centerpiece of the skyline in the world’s auto capital. Development observers and the public have also panned the renovation plan in part because it calls for demolishing two of five office towers GM owns in the RenCen complex – they say the automaker could instead convert it to apartments, or find other uses.

GM and its partner on the project, billionaire Quicken Loans owner Dan Gilbert, have claimed sagging post-pandemic office demand justifies full or partial demolition. But that argument has fueled accusations that the demolitions are aimed at boosting demand for nearby downtown Detroit office spaces owned by Gilbert.

The controversy unfolded after GM recently signaled it would ask lawmakers for tax breaks, drawing criticism from the public and some policymakers on both sides of the aisle. GM receives more subsidies than all but three US corporations, and the company has recorded $9.9bn in profits this year.

The threats are “plutocratic gangsterism”, said Theo Pride, a local resident with the Detroit People’s Platform, which advocates for community benefits in large subsidy deals.

“They’re holding Detroit residents hostage,” Pride added. “These corporations have gotten every penny of public money they have asked for … and it’s egregious when they come out and say, ‘Guess what? If you don’t give us what we want, then we’ll tear down the whole thing.’”

GM and Bedrock declined to comment on questions sent by The Guardian. GM previously told the Detroit Free Press its “desire is to preserve the iconic skyline that is synonymous with Detroit … but all options remain on the table.

“If it ultimately comes to demolition, General Motors is willing [to] cover the cost, so the site doesn’t fall into disrepair.”

The demolition of the 73-story central tower and accompanying buildings would represent the largest vacancy-driven teardown in the world, the Free Press reported. The cylindrical and hexagonal glass towers with brutalist interior comprising the RenCen were built in the early 1970s with the intention of jumpstarting the city’s struggling downtown as the auto industry declined.

GM bought it 1996 and spent $1bn on renovations, but, as the automaker cut its white collar workforce, and employees began working from home, it had less need for the space.

GM and Gilbert proposed a $1.6bn plan to “right-size” the 5.5m-square-foot complex that includes offices, apartments and a hotel, and putting a plaza with restaurants and public amenities where the demolished towers stood.

The RenCen’s recent vacancy rate of around 21% is close to that for office space citywide – also among the highest nationwide, but only 6% higher than pre-pandemic levels.

The timing is also raising questions. In the late aughts, Detroit began gaining international notoriety for its blighted vacant factories, skyscrapers and urban decay – a stark representation of the decline of American industrial might. But Detroit gained status as the “Comeback City” as its downtown has rebounded over the last decade.

GM’s ask comes a few years after taxpayers contributed around $300m to Ford’s revival of an aging, vacant train station, and the conversion of a long-vacant Lincoln Motor factory into a mixed-use artists complex.

The situation is not unlike if the owners of the Empire State Building or Chrysler Building threatened to tear down those structures if they aren’t given incentives, said Greg LeRoy, director of Good Jobs First, which tracks corporate subsidies.

“They’re playing to the iconic reputation of the structure … and that’s a tried and true tactic,” LeRoy added.

GM announced earlier this year that it will move its workers to Gilbert’s nearly completed Hudson Building, which sits a few blocks away and will be Detroit’ second tallest tower upon its 2025 completion.

The proposition of taxpayers simultaneously funding Gilbert’s new construction and his demolitions is raising further frustration. Gilbert received nearly $300m in tax incentives for the Hudson. In exchange, he and city officials promised it would house jobs and generate tax revenue that were new to the city.

But GM’s employees that are moving into the Hudson largely already work in Detroit at the RenCen, so the Hudson building as of now will only house jobs and pay tax revenue that already exists here.

Not only will it not generate the promised return for taxpayers, but Gilbert and GM are now demanding the public subsidize the demolition of an old building they emptied out so they could fill a new subsidized building. Critics have dubbed it a “shell game”.

All this comes at the expense of Detroiters,” Pride said.

Meanwhile, the renovation plan has not seemed to generate excitement. Detroit-based urbanist and University of Michigan architecture professor Craig Wilkins told The Guardian it is “uninspiring”, and said the public should have more say for such a steep investment.

“I am very skeptical of how [the renovation plan] makes the experience in the city better,” he said. He advised elected leaders to “have a backbone” and call out Gilbert and GM on their “hollow threat” to demolish the building if they don’t get tax incentives.