CHICAGO -- The Michigan attorney general's office has joined a lawsuit in which Ypsilanti Township charges that General Motors Corp. cannot close a local assembly plant because the township granted it personal property tax abatements for the facility.
A friend of the court brief was filed in U.S. district court in Detroit by the attorney general's office on behalf of the township on Friday, according to Chris DeWitt, a spokesman for Attorney General Frank J. Kelley.
In a press release, Mr. Kelley said the case was "of great significance to all Michigan taxpayers."
"If local units of government agree to provide incentives, such as tax abatements, to industry to bring jobs into their communities, the companies who receive the benefit of those incentives must fulfill the promises they make to get those incentives," he stated.
The suit, filed April 29, claims Ypsilanti Township has a legal and binding contract with General Motors. It also charges that the automaker agreed to retain 4,900 jobs at its Willow Run assembly plant in exchange for a 50% tax abatement. The suit was initiated after General Motors announced in February that it was closing five plants in Michigan, including the Willow Run plant, which is scheduled to shut down next year.
Doug Winters, the township's attorney, said township officials were "very pleased" with the attorney general's decision. He added that Washtenaw County has also joined the suit, giving it support from "three tiers of state government."
Nettie Seabrooks, a General Motors spokeswoman, said the intervention by the governments "does not change anything."
"We still fee the case is without merit, and we will defend ourselves vigorously," she said. The automaker has contended that Michigan's tax abatement law does not require or guarantee a certain number of years in exchange for an abatement.
Township officials have said the abatements, which end in 2003, have cost taxing districts in Washtenaw County $13.5 million to date.
With the closing of the Willow Run plant, Standard & Poor's Corp. placed debt of the Ypsilanti Township Building Authority and the Ypsilanti Community Utilities Authority on Credit Watch with negative implications.