Saline Hears Legal Threat, Relents to Oracle's Ask for Maximum Tax Break

Three days after granting the Oracle data center a tax break on an investment of about $4.8 billion, the township board met for a special meeting Friday evening and granted the 12-year, 50-percent abatement on $43.1 billion - the latest investment estimated by the developers. It was the latest twist in a saga that has gripped the township for about a year.

The move was criticized by the mostly anti-data-center audience members at Saline Township Hall on Braun Road.

The board's decision came after ominous meeting-opening comments from attorney David Landry, who came on to help the township address the data center issue after it was sued by Related Digital and property owners when it decided not to grant the rezoning request it needed to build the development on the west end of the township. Landry helped negotiate the consent judgment that stipulates the the tax abatement, among other things.

Landry reiterated points in the court judgment, including that the township will agree to theIndustrial Facilities Exemption and that it will agree to the maximum exemption.

"The judgment does not say the township may approve it, it says that it shall approve it. It doesn't say  the township could decide whether or not to approve it. It says the township shall approve it."

Landry said Related Digital submitted and executed an application on May 18 for an abatement of 43 billion. Then Landry said the township held public meetings July 8 and July 14 and allowed extensive public comment at both. On July 14, the board voted to limit the tax break on just $4.8 billion - the figure that was estimated as the value of the development last fall.

"In a word, you can't do that. It's a violation of the consent judgment. It's also a violation of Public Act 198. The consent judgment order of the court said the township shall provide the IFEC and it shall provide the maximum exemption," Landry said, adding a second foul. "Act 198 does not authorize a local unit of government to lower or limit the amount."

Landry went back to the public comment sessions, which obviously swayed the board.

"Act 198, which allows the exemption, does not require a township to even hold a public hearing," Landry said.  "You have to approve it in a public meeting, but a public hearing is different."

Landry has taken aim at a smaller issue, allegations that construction began in November, which would change the timing to apply for the tax break. He said, in accordance with the consent judgment, development activities had begun, not construction.

Landry said if the township didn't grant the tax break on the full $43 billion figure, the township would be sued.

"What happens if you don't do that? You're going to get sued for violating the consent judgment, and you're going to get sued for violating Act 195. You're going to be required to pay not only attorney payments and costs - that's the easy part - if you don't agree to this, and this project gets delayed, there's what's called consequential damages. Can you imagine all the contracts that have been entered and all the materials being delivered every day and all the equipment that's been ordered and each one of those labor contracts and construction contracts? If they don't finish by a certain date, they have to pay damages," Landry said. "Those consequential damages are easily going to be in excess of a million dollars. Do you really want to expose the residents to those specific damages if you don't correct this?"

Supervisor Tom Hammond asked if the cost lawsuit would be the biggest issue. Landry said it would be.

"How are you going to raise us 1.1 to 1.5 million dollars? I don't think you have it in your budget. You going to have to assess the residents," Landry said.

The township board considered moving without a public comment. It did decide it would act before public comment. Treasurer Beth Boulter moved to amend the approval of the industrial facilities exemption, made at Tuesday's meeting, and to adopt the May 18 application for an IFEC as required by the consent judgment. It was passed by a 5-0 vote.

A chorus of boos rained from the audience.

This all took place in the first 17 minutes of the meeting.

Supervisor Hammond opened the meeting to public comment. Nearly all of it was opposed to the board's decision. 

"I'm so disappointed. I really thought you guys had our backs," said a woman who said she recently moved out of the community. "I love this community more than they want to rip it apart."

County Commissioner for Ann Arbor Yousef Rabhi spoke to "officially object" to the decision.

"I wanted to re-emphasize to the board that the decision you're making here today does not just impact your township. It impacts all of these taxing jurisdictions.  The county again provides services, including for our veterans. We have a millage for veterans. We have a millage for Public Safety. We have a millage for mental health. We have a millage for the seniors in our county,"  he said.

While many agreed the board members were in a tough spot, they said they wished the board would have accepted the assistance of the people and worked for the people.

Jordan Kleinsmith donated $1,000 to a GoFundMe page he started to help the township with a legal fight.

"I know you folks are not the enemies here, and I know the rock in a hard place," Kleinsmith told the board. "I just want to reaffirm that if you want to go against this consent judgment, if you want to relitigate it, we are behind you."

Ted Douglas wanted to know what kind of auditing Saline would do to make sure the data center doesn't underreport its equipment to lower its tax payments.

Several saved criticism for the attorneys Landry and Fred Lucas. 

At times, it was absurd. Ray Smith, dressed in a red, white and blue top and shorts, played an AI-composed song and swayed to the music as the song bemoaned Lucas.

Some criticized Landry for referencing figures that showed a majority of the speakers at a past meeting were not Saline Township residents.

"I think for you to belittle anyone coming from outside the township to pass comment is not correct," Kim Rose said. "Everyone's opinion here matters."

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