Editorial: Revive Brownfield development bill
Michigan House Speaker Kevin Cotter should reconsider a decision not to bring to a vote a bill that would have encouraged at least $3 billion in new investment in Detroit and made the redevelopment of challenging sites easier in cities across the state.
Cotter blocked the Local Government Committee this week from discharging the Senate-passed legislation which would put in place an innovative tax-capture mechanism to help developers recoup some of their investment in contaminated or blighted brownfield properties.
Critics called the bill a giveaway to billionaires, and it was backed by Quicken Loans Chairman Dan Gilbert, who has already put more than $2 billion into Detroit projects.
Rather, it was a recognition of the reality that redeveloping many sites in Detroit and other urban areas remains because of the cost of remediating tainted land and the still relatively low rents the market supports.
Gilbert testified before the committee that he planned up to another $3 billion in investments if the bill passed, including redevelopment of the 2-acre J.L. Hudson’s department store site in the heart of downtown and a remaking of the Monroe block.
But it is not just a Detroit bill. Cities from Petoskey to Saginaw have properties that would be eligible for the tax recapture.
Gov. Rick Snyder, normally skeptical of such tax incentives, supported this bill because of its unique structure.
The tax capture would be limited to so-called transformational projects on sites not currently producing significant tax revenue. The new taxes generated by residents and visitors of the mixed-use properties would go to offset the costs of cleaning up and building on the properties.
In Detroit, developers would have to put up at least $500 million in private funding to be eligible and commit to putting the damaged site into use within five years. The threshold would be lower in smaller communities, ranging from $25 million to $100 million.
Among the sites that would likely be eligible is the Pontiac Silverdome, which is one reason Oakland County Executive L. Brooks Patterson supports the measure.
In fact, the bill has broad support in the Republican-controlled House and would likely pass if it was allowed to reach the floor.
But Cotter, who is term limited and finishing his time as speaker, would not allow committee Chair Lee Chatfield, R-Levering, to release the bill, even though it reportedly had gained the backing of a majority of Republicans on the Local Government panel.
Cotter was concerned about the impact of the tax capture on the state budget, since it would include state income and other taxes.
But as downtown Detroit has shown, the more vibrant a community becomes, the more investment dollars it attracts. If Detroit and other cities could fill their brownfield sites with new projects, their overall health would improve and their tax generating potential would grow.
This bill is a chance to make up for decades of neglect of Michigan’s urban areas, and do so primarily with private dollars.
It is not too late to reconvene the Local Government Committee in the lame-duck session and bring the legislation to the full House for a vote.
Failing that, the governor and lawmakers should reintroduce it when the new Legislature meets in January, minus Cotter, and push it to passage.