Friday, February 27, 2004
Tax Credits to Spur More Than $47 Million in Private Investment
Governor Jennifer M. Granholm announced today that Single Business Tax (SBT) credits offered through the Michigan Economic Development Corporation (MEDC) will help redevelop nine brownfield sites in communities across the state. The projects are the first to be approved under new program guidelines enacted in January. The redevelopments will spur more than $48 million in private investment and create and retain up to 145 jobs.
"Brownfield sites often present costly roadblocks to progressive development in communities large and small throughout the state," Granholm said. "These credits will help finance the reuse of underutilized properties, transforming them into magnets for future economic development."
A total of approximately $3.7 million in brownfield SBT credits were awarded to benefit the following projects:
Artspace Projects, Inc., Jackson will utilize a credit valued at $1 million to rehabilitate a vacant, contaminated industrial complex adjacent to the Jackson Armory. Artspace plans to transform the structure into 36 live-and-work loft apartments targeted toward artists and low-income tenants. The project will spur more than $10 million in private investment.
Covenant Capital, Inc., Pinconning Township will use an $80,000 credit to redevelop a former gas station located at 3859 North M-13 into 12,000 square feet of commercial and retail space. The project is expected to spur $825,000 in investment and create 12 full time jobs.
The administrative process for awarding brownfield credits involving projects with $10 million or less in private investment was recently transferred from the Michigan Department of Treasury to the MEDC. Prior to January 5, 2004, the MEDC had authority only to grant brownfield SBT credits for projects involving more than $10 million in private investment. Treasury processed the smaller requests on a first-come-first-served basis.
Since the demand for the credits outstripped the amount available in recent years, the MEDC has devised new criteria to determine the eligibility of the smaller brownfield projects, ensuring that sites with the greatest community impact would receive consideration. The chair of the Michigan Economic Growth Authority Board makes the final determinations on projects based on the recommendations from the MEDC.
The eight brownfield projects announced today are the first to be approved through the MEDC under the new criteria which include the following:
the host community must make a reasonable contribution to the project through local funding sources including tax increment financing and property tax abatements;
the project should support redevelopment in core communities and downtown areas;
manufacturing projects must help meet the pressures of national and international competition by reusing existing facilities and preserving and creating new jobs; and
the qualified project must demonstrate the critical need for the SBT credit by proving that all other forms of financing have been exhausted before receiving the credit.
"Brownfield SBT credits have served as a great redevelopment tool," said MEDC President and CEO Don Jakeway. "The demand for the credits made it necessary to fine-tune the decision process to align the brownfield program with other ongoing economic development efforts. The new process will ensure that all eligible projects are considered and provide the best value for the state's tax dollar."
The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.