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Locals liking MIThrive, statewide biz groups largely on sidelines

February 14, 2017

Article courtesy of MIRS News Service

There’s an empty 82,000-seat stadium in Pontiac and Mayor Deirdre Waterman can’t do anything with it.

In its heyday, the Pontiac Silverdome was home to the Detroit Lions and the Detroit Pistons, but these days the sports activity is limited to History Channel commentators firing tee shots across the hulking monstrosity.

Developers have tried to put together the financing to do something on the 127-acre plot of land, but the numbers don’t work. The gap between the amount of money that can be made and the cost of doing the project is too big.

That’s among the reasons Waterman and other city officials were in Lansing Thursday, to urge state lawmakers to support legislation giving locals a new tool to allow major, “transformational” projects to get off the ground.

The MIThrive legislation would allow the Michigan Strategic Fund to approve a maximum of five projects a year — more if not all of the projects from the year prior were used up — that qualify for special state income and sales tax capture.

Gov. Rick Snyder’s sweeping tax reform package in 2011 eliminated many tools local governments had to attract large projects. What they’re left with is their local Downtown Development Authorities, whose ability to help multi-million dollar projects is limited.

Waterman and Oakland County Deputy Executive Matt Gibb told the Senate Economic Development and International Investment Committee that without the reintroduced MIThrive legislation from Sen. Ken Horn (R-Frankenmuth), “the numbers don’t work” for major projects like the Silverdome and, likely, the Palace of Auburn Hills some day soon.

The package was originally pushed by Quicken Loans CEO Dan Gilbert, who has initiated large-scale re-investment in downtown Detroit. The bills are tied to his efforts to build a mixed-use project on the old Hudson department store property in downtown Detroit and a new soccer stadium. He’d also like to redevelop the site of the failed Wayne County Jail project.

But Gibb said these bills are more than that.

“It’s not about the Hudson project or Flint,” Gibb said. “Every community has an opportunity to use this tool to fill in that gap.”

Earlier in the day, the Michigan Municipal League hosted its legislative forum, where members were allowed to ask Horn, Rep. Jim Lower (R-Cedar Lake) and House Minority Floor Leader Christine Greig (D-Farmington Hills) various questions on local government issues.

The topic kept coming back to the TIF legislation. Locals expressed angst that at a time when the state finds news ways to cut off their funding streams, these bills could help attract projects that are beyond what can be done at the local level.

The legislation, dubbed “TIF On Steroids,” was reintroduced Tuesday as MIThrive, or the Michigan Thrive Initiative and includes five bills: SB 0111, SB 0112, SB 0113, SB 0114 and SB 0115.

The bills would allow income taxes paid and sales taxes collected by businesses developing certain brownfield sites to be captured by those businesses.

The package of bills is being backed by Saginaw Future, Bay Future, Ann Arbor Spark, Business Leaders of Michigan and the Detroit Chamber of Commerce, among others.

However, where support appears lacking is with some organizations representing businesses statewide that are less focused on one city or one region’s economic development projects.

Business Leaders for Michigan supports the bills, with its CEO, Doug Rothwell saying in a press release, “Michigan cities across the state will benefit from this needed economic development tool. It’s an essential next step to help spur increased private investment and redevelop urban centers in both Peninsulas.”

One key business lobbyist on background told MIRS a key cause of concern over MIThrive is the state’s history of failure with its Michigan Economic Growth Authority tax credits among others.

“These things just seem to get out of control,” the lobbyist said.

The other problem cited with the proposal is its narrow scope. The vast majority of Michigan businesses will never be offered the tailored, targeted tax treatment being advanced by MIThrive.

While not coming out against Horn’s package directly, Michigan’s largest statewide business advocacy groups are sitting on the sidelines.

The National Federation of Independent Business (NFIB) has a long-standing position opposing targeted tax credits, such as the Michigan Economic Growth Authority (MEGA), which are still costing the state hundreds of millions of dollars each year.

However, Charles Owens, director of NFIB Michigan, told MIRS the group would be posing a question to its member companies specific to the MIThrive proposal so the group’s position could theoretically evolve based on the results of that survey.  

The Michigan Chamber of Commerce, when asked about the package, merely responded the group isn’t taking a position for or against the package. In the past, the Chamber has challenged targeted tax cuts such as the Michigan movie production credit and special tax treatment extended to the Grand Rapids Switch project.

The Michigan Manufacturers Association (MMA) puts itself in the “not opposed” category, but said the group would like to see targeted credits aimed at their sector of the economy.

“The Gilbert package is about urban redevelopment focused more on commercial development,” said Mike Johnston, vice president of government affairs for the MMA. “We do not oppose this package. However, we are more interested in expanding economic development incentives that target manufacturing investment, so that we can more effectively compete with other states that are working to attract new investment, retain current facilities and attract investment and jobs away from other states like Michigan.”

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