Arlington council OKs tax incentives for GM plant expansion

City Council members opened the door Tuesday to a $1.29 billion renovation and expansion of General Motors’ Arlington assembly plant. The next move is up to GM.

The council approved on final reading the creation of a reinvestment zone to offer tax incentives valued by the city at $28,701,631 in exchange for the Detroit-based automaker’s investment in the project and maintaining at least 3,179 full-time jobs. Besides the 10-year, 80 percent tax abatement, the city would waive building-permit and development-related fees and roadway impact fees.

“This council is totally committed to General Motors,” Mayor Robert Cluck told John Blanchard, GM’s director of local government relations, just before the 9-0 vote. “You ask for an abatement, we ask for your investment. We’re both happy, right?”

GM proposes retooling the plant for technological advancement, efficiency improvements and capacity enhancement, according to a city staff report. The project includes a 1.2-million-square-foot expansion to the north and south of the existing plant as well as the addition of new machinery and equipment and special tooling.

“This could be a tremendous project for the plant,” Blanchard said. “It really would position this plant for the future.”

General Motors, which employs about 3,500 people at the Arlington plant, promises to add 589 employees.

Expansion work could begin in the third quarter of 2015 and be completed by the first quarter of 2020. Equipment installation is proposed to begin in the third quarter of 2015 and be completed by the first quarter of 2021.

Additional tax revenue to the city is estimated at $7,175,408, according to a city staff report.

Although GM has not officially announced the project, Blanchard called the vote Tuesday a big part of the process.

“We should be able to have, hopefully, a decision very quickly,” he said.

The Arlington plant, which opened in 1954, has built more than 10 million vehicles. It is now the only GM facility to produce full-size sport utility vehicles including the Chevrolet Suburban, Chevrolet Tahoe, GMC Yukon and Cadillac Escalade.

GM’s first-quarter earnings, announced Friday, provide a reason why the company wants to expand in Arlington. Lower gas prices encouraged U.S. consumers to buy more pickups and big SUVs in the first quarter, helping GM post a record $2.18 billion profit in North America. The company sold nearly 55,000 big SUVs in the period, its best total in seven years.

Last fall, GM opened a stamping facility as part of a $530 million expansion and overhaul of the Arlington plant to prepare for the new SUV models. That followed a $331 million body shop expansion and retooling.

The company also bought 11.5 acres on Abram Street across from the assembly plant for future use. The property, at 2540 E. Abram St., includes the now-closed Cowboys Dancehall, which had operated there for 20 years.

The council has approved various economic incentives for GM over the years. To help lure the stamping facility, which brought about 180 jobs, the council approved a 10-year, 90 percent tax abatement for new buildings and equipment. That saves the company more than $1 million annually in city taxes.

Before that, the city offered GM an identical incentive package to secure the multimillion-dollar body shop expansion and retooling, which brought about 110 jobs. That deal saved GM about $1.2 million annually in city taxes.

“We probably have never said ‘no’ to GM as far as expansion is concerned,” Cluck said last month. “We have a beautiful relationship with them.”

This report includes material from The Associated Press and the Star-Telegram archives.

This story was originally published April 29, 2015 at 4:42 PM with the headline "Arlington council OKs tax incentives for GM plant expansion."