CHICAGO - While one Michigan community has reached a settlement with Chrysler Corp. over the company's decision to relocate its headquarters, another town is still battling General Motors Corp. in a similar case.
Highland Park, Mich., and Chrysler officials recently agreed on a settlement worth about $90 million over the automaker's plans to move its headquarters out of the city by 1995.
Discussions between Highland Park officials and Chrysler began shortly after the company announced in September 1992 its intention to relocate its headquarters and 6,000 employees to Auburn Hills, Mich., in 1995. Highland Park has been Chrysler's headquarters since 1925.
Meanwhile, Ypsilanti Township officials are trying to negotiate monetary damages from General Motors after an unsuccessful legal attempt to force the automaker to keep open its Willow Run plant, which closed in September.
In a lawsuit, Ypsilanti officials charged that General Motors had agreed to maintain 4,900 jobs at Willow Run in return for a 50% tax abatement. In February, a Washtenaw County Circuit Court judge ruled in the township's favor. However, the ruling was overturned by the Michigan Court of Appeals, prompting the township to take its case to the state Supreme Court, which declined to hear the case in September.
Earlier this month, Highland Park City Council approved a settlement that calls for the city to receive $30 million in cash over the next three years. In addition, Chrysler has agreed to pay for cleaning up the site and for a campaign to attract other tenants. That could cost up to $60 million, city officials said.
Scotty Wainwright, spokesman for Mayor Linsey Porter of Highland Park, said that $15 million of the $30 million cash settlement will be applied toward the city's general fund. The rest will be placed in escrow to help shore up the city's credit standing, Wainwright said.
None of Highland Park's debt is rated by Standard & Poor's Corp., Moody's Investors Service, or Fitch Investors Service.
However, Dennis Evans, Highland Park's director of community and economic development, said that a portion of the settlement could be used to back bonds or help leverage private loans to finance developments in the 2.9-square-mile city, which is surrounded by Detroit.
For example, some of the settlement could back bonds to finance the $9 million construction of a state family care center and a state office building, Evans said. City officials will be discussing other uses for the settlement proceeds soon, he said.
Chrysler's headquarters in Highland Park covers 144 acres and includes 25 buildings.
In a press release, Michael M. Glusac, Chrysler's executive director of government affairs, called the settlement "unique."
"We said from the beginning that we felt an obligation to work closely with the city during this transition," Glusac said. "This agreement is proof that we do not intend to turn our back on Highland Park."
In Ypsilanti, Wesley Prater, township supervisor, said that the township pursued its claims for monetary damages in Washtenaw County Circuit Court after the the state Supreme Court declined to hear its case against General Motors in September. At that time, the circuit court appointed a facilitator to mediate discussions between the township and General Motors. If those discussions break down, the case could be decided by the circuit court, Prater said.
In July, Standard & Poor's affirmed and removed from CreditWatch the ratings on $3.2 million of Ypsilanti Township Building Authority and Ypsilanti Community Utilities Authority debt. The rating agency placed the ratings on CreditWatch with negative implications in March 1992 after General Motors said it would close the Willow Run plant.
