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Automaker Settles Legal Dispute With Township That Lost Plant

April 14, 1994

DETROIT (AP) _ General Motors Corp. has reached a settlement in a lawsuit filed by Ypsilanti Township over the automaker’s closing of the Willow Run Assembly Plant.

Under the agreement, GM will spend $84 million for new equipment at its Hydra-Matic transmission plant, also in Ypsilanti Township, and add at least 500 jobs to its current workforce of 5,500.

The automaker also agreed to clean up any pollution at the abandoned Willow Run plant to clear the way for redevelopment.

The Washtenaw County township sued GM in 1992 after the automaker announced it planned to close Willow Run - which employed 4,500 workers - and move production to an assembly plant in Arlington, Texas.

The township claimed that GM’s 1988 request for a 12-year tax abatement valued at $18 million was a legally binding contract that prevented Willow Run from closing. The township won a few initial court victories, but the plant closed last September after GM won a favorable ruling in the Michigan Supreme Court.

Washtenaw County Circuit Judge Donald Shelton approved the agreement, which was unanimously ratified Wednesday night by the Ypsilanti Township Board.

″Under the circumstances, we’ve done quite well,″ township Supervisor Wesley Prater said. ″The township was more concerned about preserving jobs than regaining revenues it lost through the tax abatement.″

The agreement requires that GM increase employment at the Hydra-Matic plant to 6,000 workers over the next six years; if not, it must give up a percentage of the tax abatements it will seek for the new equipment at Hydra-Matic.

Despite the Supreme Court setback, the township gained leverage against GM when Michigan voters approved Proposal A last month. An amendment to the school financing measure requires that companies seeking a standard 12-year property tax abatement negotiate a written agreement with the host community.

The amendment applies only to new projects, said its sponsor, state Rep. Kirk Profit, D-Ypsilanti. But he said Ypsilanti Township gained bargaining power when GM sought the abatement on future improvements to an existing facility - the Hydra-Matic plant.

The township still wants GM to repay some of the $13.5 million in taxes that it already had given up during the course of the 1988 Willow Run abatement. That motion is pending in Washtenaw County Circuit Court.

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