Toyota dedicates new tech center in Michigan, 3rd Ld-Writethru

by TOM KRISHER, AP Auto Writer

October 9, 2008 —

YORK TOWNSHIP, Mich. (AP) _ Across the street from Terry Fisher's BP gas station just off U.S. 23 sits what may be the only good news in the domestic auto industry these days.

It's an expansion of Toyota Motor Corp.'s new North American technical center, a $187 million, 530,000-square-foot complex that sits on 700 acres south of Ann Arbor.

While the Detroit Three, who long have dominated employment in Southeast Michigan, are losing billions of dollars and shedding workers by the thousands, Toyota on Thursday dedicated the new complex, complete with 300 jobs, many of them highly paid engineers. The company plans to hire 100 more people despite its own sales slump, with possible expansion in the future.

The complex, on the site of a former state mental hospital, will design and engineer vehicles for North America. It also has a safety testing center for crash tests.

Combined with an existing center closer to Ann Arbor, the new facility brings Toyota's technical employment in the area to just over 1,000.

Workers gradually have been moving into a three-story office building and other structures on the rural site for a month or so, but the place hasn't been a bonanza for Fisher. At least not yet.

While business is up 10 or 15 percent in recent weeks, much of it from people with Toyota identification badges, his property taxes doubled as the value of his land rose, he said.

"It wasn't like a turnkey, instant get-me-rich thing," he said. "I would say it's a positive thing, though."

It clearly is a positive thing for the state of Michigan, which added some badly needed high-tech jobs after losing more than 315,000 manufacturing positions since mid-2000.

The state went through contortions to land the center, including tax breaks from state and local governments worth more than $38 million over the next dozen years.

It took an act of the Legislature in 2004 for the state to sell the land to Toyota for $11 million, and Michigan had to fend off a lawsuit from a developer who outbid Toyota by $16 million for the land at the height of the area's housing boom.

Gov. Jennifer Granholm has said the state will see a net tax gain of $60 million over the next two decades from the center, which she says is an important piece of the state's plan to diversify its economy.

But despite tough times, especially for General Motors Corp., Ford Motor Co. and Chrysler LLC, development of next-generation vehicles will continue to be a part of the state's economic future, Granholm said during a ceremony dedicating the complex on Thursday.

"It's all going to happen right here in Michigan, and that's what this tech center represents," she said.

James Epolito, CEO of the business-hunting Michigan Economic Development Corp., said the state is trying to lure research and development to replace lost manufacturing jobs. There are 331 auto research and development centers in the Detroit area, he said.

"This is the jewel in the crown of Toyota investment in North America," he said. "You're losing those rust belt jobs, kids right out of high school. Those jobs are not coming back. That's the tough news. But they are replaced by these kinds of jobs, and these kinds of facilities. That's the transformation that we're going through."

The state gave up a lot in tax revenue, but it was necessary to compete with other areas to lure Toyota, Epolito said.

Officials from the township and school district where the bulk of the complex sits are thrilled to get even a small portion of the tax revenue from Toyota, and they look forward to the time when the abatements expire.

"It wasn't even on the tax rolls" when it was a mental hospital, said York Township Supervisor Joe Zurawski. "A piece of something is better than all of nothing."

Bryan Girbach, superintendent of the Milan Area School District, said Toyota will pay $118,000 this year toward retiring a $49 million bond issue taken out to build a new high school and renovate others.

The money, he said, will help offset lost businesses, declining real estate values, and tax breaks granted to keep other businesses in the area.

"We would be in deep trouble if it wasn't here," Girbach said.

Associated Press