Three years after moving its North American headquarters to Virginia, German automaker Volkswagen AGis planning major improvements to its Auburn Hills offices.
It is renewing its lease on office space for 1,100 employees in Auburn Hills and spending $19.4 million to upgrade the building, according to documents filed with the city.
The company’s 338,000-square-foot lease expires at the end of 2011 and the company had considered Troy among other locations, but settled on Auburn Hills after a series of tax abatements have been approved.
“This is a community that is rich in automotive talent,” said Sheriece Matias, manager of corporate communications for Volkswagen. “As we grow our operations in the United States, Auburn Hills is a focus area and we’re happy to move all of our employees under one roof.”
Jonathan Browning, president and CEO of Volkswagen of America Inc., planned to include information about the lease renewal in a speech today at the Automotive News World Congress, Matias said late Monday.
The company has signed the 10-year lease, she said, and will be moving a small number of employees out of four buildings in the region. Those addresses were not immediately available.
Matias said the company was represented by CB Richard Ellis in the deal.
She could not comment on other locations the company examined, but Troy Assistant City Manager Mark Miller confirmed there were preliminary discussions about using space in Troy in the Baluster Park office complex.
With close to 1,100 employees in Auburn Hills after the consolidation, Matias said the building at 3800 Hamlin Road represents the company’s second-largest headcount behind the new manufacturing facility in Chattanooga, Tenn.
The company’s North American headquarters in Herndon, Va. has 350 people.
Despite the move of company executives and its headquarters in 2007, Matias said Auburn Hills has always been a permanent part of the company’s plan.
At the time, the company announced it had 1,400 employees in Auburn Hills and was moving the North American headquarters to Hearndon, Va. At the time, it said only 300 full-time positions and 300 contractors would remain.
According to the documents filed with Auburn Hills, the company has 384 direct employees and 649 contract employees prior to consolidating offices.
“While we’ve moved some operations outside of Detroit, this really is the center of the U.S. automotive industry,” she said. “We have always believed it’s crucial to maintain operations here.”
But the company will also enjoy some tax savings for the decision.
The city of Auburn Hills will be granting VW a series of tax abatements, approved during its Jan. 3 meeting, according to the city’s website.
It will receive $1.5 million in tax savings through two Industrial Facilities Exemption Certificate requests over 8 years. It will also receive a 100 percent abatement of new real estate taxes for 5 years on the portion of the property renovated as well as a 50 percent rebate on the taxes for the existing portion for 10 years; with the total savings not included in the meeting minutes.
A phone message was left for Auburn Hills City Manager Peter Auger late Monday, but he had already left work for the day.