LANSING — Gov. Rick Snyder yesterday signed a package of bills that proponents say will add an additional tool to the economic development toolbox.
The “transformative” brownfield legislation has been touted by supporters as instrumental for undertaking redevelopment projects at sites requiring significant environmental remediation.
The bills would allow the developers of brownfield projects that meet certain investment thresholds to keep an added portion of the new tax revenue generated by the development and thus close the last existing financing gap for projects, according to supporters.
“As part of Michigan’s reinvention, it’s important that we continue to revitalize our downtowns, waterfronts and main streets to attract and keep talent and business continually growing in our great state,” Gov. Snyder said in a statement. “This legislation is key to closing existing funding gaps surrounding brownfield sites and creating vibrant communities where Michiganders can live, work and play.”
Critics of the legislation — including the Midland-based Mackinac Center for Public Policy — contend the incentives amount to additional corporate welfare and “picking winners and losers.”
However, supporters note that all projects require both state and local approvals as well as a third-party analysis. In addition, all tax capture for approved projects is capped.
“The brownfield redevelopment tool is important because you have to have an attractive place for people to come to, work and live in,” Business Leaders for Michigan President and CEO Doug Rothwell told MiBiz for a previous report. “The brownfield tool will help redevelop our cities and … help meet that cost gap that still exists in places like Michigan where the urban market still hasn’t quite come back compared to other places in the country.”
The legislation was initially spurred by Dan Gilbert, the billionaire Detroit real estate developer and founder of Quicken Loans who plans a downtown Detroit skyscraper that would qualify for the incentive.
MIThrive, a statewide coalition of real estate developers and economic development professionals that formed in support of the bills, are quick to note the incentives have been crafted for use anywhere in the state.
The MIThrive website notes that proposed projects in West Michigan such as redevelopments on the banks of the Grand River in Grand Rapids and on Muskegon Lake would also qualify.
With the brownfield legislation signed into law, legislators will now consider another proposed incentive dubbed Good Jobs for Michigan, that supporters say will help fill the buildings made possible as a result of the new brownfield tool.
The proposal would allow some employers that create jobs paying above average wages to keep a portion of the income tax generated by the employment opportunities, as MiBiz previously reported.