New tax aid for developers could happen by years’ end
Lansing — A high-ranking official on a semi-public state board that offers financial incentives for businesses said Tuesday that developers could get tax benefits for projects on “brownfield” sites – perhaps by the end of the year – under a new law that took effect Monday
After a Tuesday meeting in which officials ratified guidelines for the new law, Greg Tedder, executive vice president of the Michigan Economic Development Corporation, said that several projects may already be in the pipelines. He would not discuss them because of non-disclosure agreements.
He cautioned that the end-of-the-year timeline is “aggressive” and suggested next year may be more likely. “We’ve had a couple projects that I think are under non-disclosure agreements, but beyond that, we wouldn’t anticipate really seeing a project before the end of the year,” Tedder said.
In June, Gov. Rick Snyder signed a plan into law that will let developers receive up to 50 percent of taxes for up to 20 years to subsidize the cost of building on environmentally contaminated land known as brownfield sites.
Local- and state-level economic analysis still has to take place before the Michigan Strategic Fund board can approve any new tax benefits under the new law.
MEDC officials explained guidelines for the plan to let developers collect some of the taxes on certain businesses that develop on blighted or environmentally damaged land.
“I think that the guidelines are important,” Tedder said. “They’re effectively a summary of the legislation, more or less. But it lets everyone know what the board’s expectations are since not everyone’s going to read the legislation.”
He added that “there’s been a lot of general interest” about “what it all means.”
Detroit billionaire and developer Dan Gilbert – founder and chairman of Quicken Loans – backed the legislation along with a statewide coalition of supportive business groups and developers who said it could encourage “transformational” projects with the new incentives, and boost economic growth while revitalizing long-blighted land.
The law could let developers capture up to $1 billion in income and sales tax, but there's no cap on the amount that could be captured from property taxes, according to Howard Heideman, an economist at the Treasury Department.
Most Republican and Democrat lawmakers supported the plan to offer the tax incentives. Detractors in the House were mostly conservative Republicans who said it amounted to the state interfering with the free market by picking “winners and losers” in the business world.
Jim Tedder, R-Clarkston, a vocal supporter of the package and chairman of the House Tax Policy Committee, reported receiving $2,500 from a Quicken Loans executive last year, according to campaign finance reports.
From 2009-2016, employees of companies and groups backing a prior version of the tax incentive plan donated a combined $2 million to committees tied to candidates for the state Legislature, according to a 2016 report from the Michigan Campaign Finance Network.