Iliches trying to fleece us for another $800 million.

[Rocket]

In 2013, the Ilitches pitched the idea of the 59 block “District Detroit” in exchange for half a billion in public subsidies for Little Caesar’s Arena, most of it from diverting funds from DPS.



While the surrounding “District Detroit” did not materialize, the public will be paying for the Ilitches arena until 2051.



Today, the Ilitches are seeking $800M in additional public funding to complete the development of their vacant properties that tax payers have already paid nearly a billion to develop.



Contact city council now to stop any more subsidies to the Ilitches.

councilmembersheffield@detroitmi.gov
councilmembertate@detroitmi.gov CouncilmemberCalloway@detroitmi.gov BensonS@detroitmi.gov councilmemberjohnson@detroitmi.gov
Councilmembergabriela@detroitmi.gov councilmemberdurhal@detroitmi.gov councilmemberwaters@detroitmi.gov
coleman.young@detroitmi.gov

[GPCharles]

Today, the Ilitches are seeking $800M in additional public funding to complete the development of their vacant properties that taxpayers have already paid nearly a billion to develop.

You do realize the taxpayers haven't paid anything. We are talking about credits against future taxes that would be paid if developed without the incentive. Note - no incentive, no development. The money isn't coming out of anyone's pocket.

[Richard]

You do realize the taxpayers haven't paid anything. We are talking about credits against future taxes that would be paid if developed without the incentive. Note - no incentive, no development. The money isn't coming out of anyone's pocket.

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

Sense you put up the money to build the project,with no interest,do you at least get a cut of the profits once the project is completed,no.

The irony of it all,you are paying interest on money that you loaned out that you cannot collect interest on in return.

[drjeff]

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

This is absolutely, 100% wrong. The city of Detroit is not "paying" anyone to get these projects done. GPCharles is correct. At this point these credits are imaginary money. If the project is completed, then the amount of tax that would normally be paid on that property is lessened due to the credits. So you could call it a loss of future income to the city if the project is completed but it is not a net loss of any of the city's dollars that already exist at any point in time.

[Richard]

This is absolutely, 100% wrong. The city of Detroit is not "paying" anyone to get these projects done. GPCharles is correct. At this point these credits are imaginary money. If the project is completed, then the amount of tax that would normally be paid on that property is lessened due to the credits. So you could call it a loss of future income to the city if the project is completed but it is not a net loss of any of the city's dollars that already exist at any point in time.

You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans.

You do realize it is something that is easily searched in order to verify.

Do you understand or have knowledge of how these big projects are funded?

The $800m did not come from one spot,it’s a combined total from multiple sources that all contain tax credit incentives to total the $800m.

No business in the world bases operations in imaginary money,once the city makes that commitment on paper it becomes a legal document,and used as leverage.

Unless it specifically reads Non-transferable,but they did not mention that,if it does not specify that,as soon as the city signs,it has cash value and like a check,once it is cashed,the city owes the money,no difference if you write a check to somebody,unless you tell them it is imaginary money and see how that goes.

Yes,somebody will be collecting it in the future,but odds are it will not be the one who you issued it to.

Quicken loans is a big force there,call them and tell them that you want to do a bridge loan using tax credits to purchase and rehab a building and report back.

That guarantee is money in the bank the day it is issued.

A decent chunk is also “captured” by the city’s Downtown Development Authority [[DDA). The authority has just that — state law gives it the power to seize a percentage of the revenue raised by Detroiters’ property taxes to give subsidies to developers in the greater downtown footprint. That’s revenue that could help pay off the district’s substantial debt, allowing it to focus on building upgrades sooner.

https://outliermedia.org/tax-capture...t-ever-sunset/

That article gives you a little window into it all and tells you as a city of Detroit taxpayer,you do not have much of a say in the matter,it’s the state.

It’s not imaginary money they are handing over,it is cash out of pocket based on future property tax collections.

[123456789]

It should be illegal to offer different tax rates to different developers. How about lowering the tax burden across the board, resulting in many more developers building an appropriate business case for projects? This is non-sensical to have government officials pick winners and losers; especially if they pick the biggest loser scum for special tax treatment yet again.

[Henry Whalley]

[QUOTE=Richard;631686]You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans./QUOTE]
tldr

[Henry Whalley]

So you could call it a loss of future income to the city if the project is completed...

Sounds right

[Richard]

[QUOTE=Henry Whalley;631691]

You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans./QUOTE]
tldr

Its people like you that helped screw up the city with attitude.

You do realize that 95% of all of these big deals coming online will be economically removed from the tax rolls for the next 25 to 30 years?

Including corporate taxes?

So not only are you paying the note you are having to cover the loss of the corporate taxes plus having to cover the loss each year because of the properties pulled offline.

The city of Detroit was paid a lump sum of $25m for the property used for the new bridge to make up for the permanent loss in property taxes over there,that’s equal to 5 years of property taxes in exchange for a future cities lifetime of the ability to collect any taxes,corporate or property,gone forever.

The city has a 2.5 billion dollar budget and you got a 1 time payment of $25m,you have broken even now as it’s been 4 years,so now you are losing $5m a year.

Thats 5 million more a year extra that the taxpayers have to come up with to make up for the loss,on top of also losing a majority of the revenue for every project that has also come online now and in the future at this rate.

All of these politicians are not going to be around in 25 or 30 years they are done in 4-8 years.

yep tdlr is the answer.

What is your breaking point ?

That point where the taxes become so much of a burden on the average taxpayers that they just give up and jump borders to the burbs or even worse out of state,which in turn raises the taxes on the ones left.

The debt does not go away.

O sorry,its already happening.

TDLR

Detroiters are not running the city and determining its future,the state is,really no point of going through the motions of holding local elections,those you have elected are as quiet as a church mouse and the city is a ward of the state.

I guess if people are comfortable with that and have bottomless wallets,it remains what it is.

[drjeff]

[QUOTE=Richard;631697]

Its people like you that helped screw up the city with attitude.

You do realize that 95% of all of these big deals coming online will be economically removed from the tax rolls for the next 25 to 30 years?

Including corporate taxes?

So not only are you paying the note you are having to cover the loss of the corporate taxes plus having to cover the loss each year because of the properties pulled offline.

The city of Detroit was paid a lump sum of $25m for the property used for the new bridge to make up for the permanent loss in property taxes over there,that’s equal to 5 years of property taxes in exchange for a future cities lifetime of the ability to collect any taxes,corporate or property,gone forever.

The city has a 2.5 billion dollar budget and you got a 1 time payment of $25m,you have broken even now as it’s been 4 years,so now you are losing $5m a year.

Thats 5 million more a year extra that the taxpayers have to come up with to make up for the loss,on top of also losing a majority of the revenue for every project that has also come online now and in the future at this rate.

All of these politicians are not going to be around in 25 or 30 years they are done in 4-8 years.

yep tdlr is the answer.

What is your breaking point ?

That point where the taxes become so much of a burden on the average taxpayers that they just give up and jump borders to the burbs or even worse out of state,which in turn raises the taxes on the ones left.

The debt does not go away.

O sorry,its already happening.

TDLR

Detroiters are not running the city and determining its future,the state is,really no point of going through the motions of holding local elections,those you have elected are as quiet as a church mouse and the city is a ward of the state.

I guess if people are comfortable with that and have bottomless wallets,it remains what it is.

This is so full of idiocy I can't respond to it all, but it's rich you think that land Detroit owned was somehow generating tax dollars [[the city does not pay itself taxes on it's own property, duh), so now that they have sold it for $25 million it's somehow a net loss.

[Richard]

[QUOTE=drjeff;631713]

This is so full of idiocy I can't respond to it all, but it's rich you think that land Detroit owned was somehow generating tax dollars [[the city does not pay itself taxes on it's own property, duh), so now that they have sold it for $25 million it's somehow a net loss.

You claim idiocy then post that ….

Bridge authority representatives said 636 land parcels have been acquired by the Michigan Department of Transportation, leading to 229 residential and 88 business relocations.
As of April 1, 235 structures have been or are in the process of being demolished, representatives said. It’s unclear how many still must be cleared until land acquisitions are finalized by September.

According to you the city owned all of that and they cannot tax property that they owned,if they already owned it why was there a need to purchase it?

The $25m was to reimburse the city of Detroit for the future property tax and business tax losses.

Based on property land values and corporate tax collections on that day,with zero consideration as to more business locating there or zero increase in land values in the future,for ever.

Before you start making it personal in the future,youu is should probably have at least a little bit of a clue as to what you are claiming others not of having,otherwise you just look silly.

[Henry Whalley]

yep tdlr is the answer.

tldr

[Henry Whalley]

This is so full of idiocy...

Friends don't let friends read Richard's bloviations. Just say TLDR.

[Richard]

Friends don't let friends read Richard's bloviations. Just say TLDR.

Friends do not let friends run about looking like a hypocrite,you really do not have to say anything,not that you are anyways.

You are confusing the word friends with Comrades,which would apply in your world.

[Baselinepunk]

"Friends do not let friends run about looking like a hypocrite,you really do not have to say anything,not that you are anyways.

You are confusing the word friends with Comrades,which would apply in your world."

Then as you can see, dear reader, he goes LOGICAL FALLACY FULL MELTDOWN when the argument is lost . . .

FLMAO!!

[Richard]

Says the one that used full caps,there is no argument,it’s a discussion that when those including yourself cannot comprehend and instead of trying to understand they resort to personal attacks,then act like they are all that when all they have done is publicly display their ignorance,like a badge of honor.

Such a shame so many in the city want to make it a better place but they always have those who make it their mission to stand in the way just because they feel the need to be recognized and really offer nothing in return but to try and suck the life blood out of the good people.

[Baselinepunk]

"Says the one that used full caps,there is no argument,it’s a discussion that when those including yourself cannot comprehend and instead of trying to understand they resort to personal attacks,then act like they are all that when all they have done is publicly display their ignorance,like a badge of honor."

As usual, you are unnecessarily verbose. A "I'm out of my league in this argument. At this point, I'll standby and learn something for once instead of coming across like a 'total know it all'" would have worked better.

"Such a shame so many in the city want to make it a better place but they always have those who make it their mission to stand in the way just because they feel the need to be recognized and really offer nothing in return but to try and suck the life blood out of the good people."

My dood, you live in the nations penis [Florida] not Detroit. Why don't you stick to issue there -- you've got plenty of them to keep ya busy for about eleventy decades.

Also, I highly suggest you look into how rhetoric + logical fallacies work, my dood. Serve you well, it will.

[Richard]

And this is what happens when a wanna-be socialist troll finds somebody of legal age to buy them some alcohol.

[Warrenite84]

Can a performance [[surety?) bond be written and paid for by the Ilitches to ensure the project will be built on an agreed upon time frame and with no allowance on cheaper materials?

As long as they offer a paid up premium for such a policy that has specified % completion mile markers, I'd say ok. If they don't complete what is agreed upon, policy sends to the city all funds required to complete the project.

Past non performance by the Ilitiches would require a hefty premium. If Gilbert applied, his premiums would be very low, IMHO.

[Rocket]

Can a performance [[surety?) bond be written and paid for by the Ilitches to ensure the project will be built on an agreed upon time frame and with no allowance on cheaper materials?

^ This

Also, how is it that there isn't a claw-back clause in these deals, so that if the Iliches don't build what they say they're going to build, that the city gets to take back the free land and building they gave them?

What 2 year olds do we have negotiating on behalf of the city?

[swingline]

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

Sense you put up the money to build the project,with no interest,do you at least get a cut of the profits once the project is completed,no.

The irony of it all,you are paying interest on money that you loaned out that you cannot collect interest on in return.

Richard, you've made plenty of spot-on posts on DYes over the years but your long description about the public incentives being applied for by the District Detroit developers is a swing and a miss. Your claim that “tax credits” will be given to the developers which will then be monetized through their discounted sale to other corporate taxpayers simply isn’t true when it comes to Michigan Transformational Brownfield Plan [TBP] tax incentives. Your claim partially resembles the financing process that occurs when federal or state historic rehabilitation tax credits are involved. But that’s not the case here. By far the largest tax incentive component of the District Detroit project is a $616 million TBP that will capture that amount from a variety of tax sources generated by the project over 30 plus years and reimburse the developers over that time for eligible costs incurred to build – and complete – the project. No completion, no reimbursement. Taxpayers are NOT coming out of pocket up front with hundreds of millions of dollars on the if-come that the project will get built. The TBP reimbursements are allocated to proposed individual District Detroit buildings and these buildings must be completed before the developers can “collect.” The developers have also sought some incentives through a couple of DDA loan programs. These amount to less than 10% of the total sought, and importantly, they are loans not grants and are secured by real estate [admittedly subject to higher priority mortgages]. There’s also incentives being sought through a residential NEZ property tax abatement and a commercial property tax abatement that together amount to about 15% of the incentives sought. The residential NEZ abatement will accrue to homeowners. Again, these abatements are contingent upon the completion of the applicable buildings/units and do not consist of some up front cash outlay by taxpayers.


There can always be a debate about the pros and cons of public subsidies for private real estate developments. It is an important debate for the District Detroit. Richard’s post injects too much misinformation to that debate.

[Richard]

My posts are long enough,how long do you think they would be if I started to list every single program involved using local,state and federal incentives and how each one applies to credits and what one can do with them and which ones can be sold and which ones cannot be.

You mention brownfield credits,that is only one layer of the multiple layers used in these projects.

When they post the total IE: $800 million,that is not $800 million cut from one check,that is multiple sources from multiple incentive programs combined into one number.

I went through it all with Packard years ago,I could have leveraged $5m for 3m in brownfield and cashed out the brownfield day one.

I am not injecting too much misinformation,there is not enough posting space to explain it all in detail,so I am posting the jist of it,that’s why you hire somebody to figure it all out because with all of the layers and each one has its specific parameters.

People keep saying that I am posting misinformation and tax credits cannot be sold

Reverse engineer

Business and individuals may be able to reduce their federal and state tax burdens and while also supporting certain historic, cultural, and community-driven causes by purchasing tax credits.
Many states, as well as the federal government, provide tax credits for certain investments in historic rehabilitation projects, low-income housing, film production, and other activities that spur economic growth and innovation, expand employment, and support progressive initiatives. These credits can be purchased by taxpayers to reduce tax rates in 30+ states and through select federal programs.
https://www.mossadams.com/services/a...le-tax-credits

There is an entire industry that deals specifically with buying and selling tax credits

http://www.etaxcreditexchange.com/

The feds even sell them

The Inflation Reduction Act addresses climate change by allowing renewable energy tax credits to be transferred between companies. The tax credit incentive is an attempt to attract more capital for renewable energy projects, granting developers cash to construct their projects and leading to profits for the corporation purchasing the credit.


With transferrable tax credits, the Inflation Reduction Act could attract more corporate interest in the renewable energy realm. Developers sell the tax credits at a discount, meaning corporations save money on their taxes.

Jorge Medina, an attorney who focuses on tax aspects of renewable energy projects and transactions, told Newsweek that, for example, if a developer sold a $30 tax credit for $26, the corporation could use that credit on their tax bill and profit $4.

https://www.newsweek.com/new-climate...redits-1742970

For something that others are claiming cannot be done,it is being done and has been done for years.

Like I posted,we do not know if this deal involves transferable tax credits or non transferable credits.

Why would they make them transferable if the intent was to not provide the company receiving them the ability to transfer them ?

They do not transfer them to another company because they are nice guys,they transfer them into cash.

Thats how places like refineries can exceed the pollution levels,because they buy clean energy tax credits from companies that have them left over because they fall below the guidelines and use those purchases in order to offset the fines,it’s allowed because they do not want to shut the refineries down and the feds collects millions in fines at little cost to the refineries.

So it is punishing them for not being in compliance but on the other hand giving them an out so they can exist.

That’s just one little tiny window into tax credits.

The information is out there on how the financing was structured for the purchase and renovation of the Book Cadillac,tax credits and the ability to cash them out played a big role in making that deal come together.

One can call that a success story,because it got done.

But there is a lot of abuse in all of that,just ask the small southern town where they put up millions in tax credits and incentives so a rail company out of Canada could build a rail car manufacturing facility,even had Kahn and associates do what they do best and design it.

Opening day came,1100 plus employees showed up for their first day on the job only to find chains on the doors,the company just walked away.

Taxpayers got left with holding the bag with no recourse.

That was 10 years ago,even today mention tax credits and you would be lucky to get out of town alive.

Look at the huge solar factories that got billions in credits and closed their doors,somebody made bank on the sale of those energy credits.

When used properly and under the watchful eye of those putting up the money,the taxpayers,they can provide really good results,but if you want to make a ton of money fast with no accountability,learn how to play the tax credit game.

When people look at these old buildings in Detroit and say - that building is not worth fixing,it’s the tax credits and incentives that bridge that gap of it not being worth fixing,their use makes up for that shortfall.

They play a massive role in Detroit,more so then other cities and the taxpayers have every right to scrutinize and dissect every single transaction,because they are the ones that are liable for the debt even more so when it comes to this stuff where it is easy to game the system.

Cut me a check for $800m,I will bring a project to Detroit tomorrow that provides 2500 good paying jobs and start throwing down tracks ,but I already learned,that is only reserved for the select few.

[Henry Whalley]

I am not injecting too much misinformation...

tldr

[swingline]

My posts are long enough,how long do you think they would be if I started to list every single program involved using local,state and federal incentives and how each one applies to credits and what one can do with them and which ones can be sold and which ones cannot be.

You mention brownfield credits,that is only one layer of the multiple layers used in these projects.

When they post the total IE: $800 million,that is not $800 million cut from one check,that is multiple sources from multiple incentive programs combined into one number.

I went through it all with Packard years ago,I could have leveraged $5m for 3m in brownfield and cashed out the brownfield day one.

I am not injecting too much misinformation,there is not enough posting space to explain it all in detail,so I am posting the jist of it,that’s why you hire somebody to figure it all out because with all of the layers and each one has its specific parameters.

People keep saying that I am posting misinformation and tax credits cannot be sold

Reverse engineer

Business and individuals may be able to reduce their federal and state tax burdens and while also supporting certain historic, cultural, and community-driven causes by purchasing tax credits.
Many states, as well as the federal government, provide tax credits for certain investments in historic rehabilitation projects, low-income housing, film production, and other activities that spur economic growth and innovation, expand employment, and support progressive initiatives. These credits can be purchased by taxpayers to reduce tax rates in 30+ states and through select federal programs.
https://www.mossadams.com/services/a...le-tax-credits

There is an entire industry that deals specifically with buying and selling tax credits

http://www.etaxcreditexchange.com/

The feds even sell them

The Inflation Reduction Act addresses climate change by allowing renewable energy tax credits to be transferred between companies. The tax credit incentive is an attempt to attract more capital for renewable energy projects, granting developers cash to construct their projects and leading to profits for the corporation purchasing the credit.


With transferrable tax credits, the Inflation Reduction Act could attract more corporate interest in the renewable energy realm. Developers sell the tax credits at a discount, meaning corporations save money on their taxes.

Jorge Medina, an attorney who focuses on tax aspects of renewable energy projects and transactions, told Newsweek that, for example, if a developer sold a $30 tax credit for $26, the corporation could use that credit on their tax bill and profit $4.

https://www.newsweek.com/new-climate...redits-1742970

For something that others are claiming cannot be done,it is being done and has been done for years.

Like I posted,we do not know if this deal involves transferable tax credits or non transferable credits.

Why would they make them transferable if the intent was to not provide the company receiving them the ability to transfer them ?

They do not transfer them to another company because they are nice guys,they transfer them into cash.

Thats how places like refineries can exceed the pollution levels,because they buy clean energy tax credits from companies that have them left over because they fall below the guidelines and use those purchases in order to offset the fines,it’s allowed because they do not want to shut the refineries down and the feds collects millions in fines at little cost to the refineries.

So it is punishing them for not being in compliance but on the other hand giving them an out so they can exist.

That’s just one little tiny window into tax credits.

The information is out there on how the financing was structured for the purchase and renovation of the Book Cadillac,tax credits and the ability to cash them out played a big role in making that deal come together.

One can call that a success story,because it got done.

But there is a lot of abuse in all of that,just ask the small southern town where they put up millions in tax credits and incentives so a rail company out of Canada could build a rail car manufacturing facility,even had Kahn and associates do what they do best and design it.

Opening day came,1100 plus employees showed up for their first day on the job only to find chains on the doors,the company just walked away.

Taxpayers got left with holding the bag with no recourse.

That was 10 years ago,even today mention tax credits and you would be lucky to get out of town alive.

Look at the huge solar factories that got billions in credits and closed their doors,somebody made bank on the sale of those energy credits.

When used properly and under the watchful eye of those putting up the money,the taxpayers,they can provide really good results,but if you want to make a ton of money fast with no accountability,learn how to play the tax credit game.

When people look at these old buildings in Detroit and say - that building is not worth fixing,it’s the tax credits and incentives that bridge that gap of it not being worth fixing,their use makes up for that shortfall.

They play a massive role in Detroit,more so then other cities and the taxpayers have every right to scrutinize and dissect every single transaction,because they are the ones that are liable for the debt even more so when it comes to this stuff where it is easy to game the system.

Cut me a check for $800m,I will bring a project to Detroit tomorrow that provides 2500 good paying jobs and start throwing down tracks ,but I already learned,that is only reserved for the select few.

There is no dispute that some public incentive programs involve credits that can be sold in order to immediately obtain funding during a project’s construction phase. I believe that the old Michigan Brownfield tax credit program allowed for just such a monetization of transferrable credits that could be used to offset the Single Business Tax incurred by Michigan corporations. Your Packard Plant reference may have involved that program. But that program sunset several years ago. In your post you seem to object to these tax credit programs as insufficiently protective of the bargain that the public will get something in exchange for the tax credits being handed out.

The point of my earlier post was that these kinds of tax credit programs, whatever their merit, are not involved with the District Detroit incentives. The TBP is a variant of TIF financed incentives. It is not a tax credit scheme that, in your words, will allow Ilitch and Ross to “cash out.” It has countless protections statutorily built in to ensure that developers follow through with promises before any reimbursements occur. The TBP is not some public boondoggle that will finance more Ilitch surface parking lots instead of the mixed use stuff described in their proposal. As I said before, whether the public will get the best “value” for its “investment” is certainly open for good faith debate but properly administered, the District Detroit plan should not become some kind of lucrative developer bait and switch.

[Richard]

It’s DDA that is running the tax capture by power of the state

A decent chunk is also “captured” by the city’s Downtown Development Authority [[DDA). The authority has just that — state law gives it the power to seize a percentage of the revenue raised by Detroiters’ property taxes to give subsidies to developers in the greater downtown footprint. That’s revenue that could help pay off the district’s substantial debt, allowing it to focus on building upgrades sooner.

Very little of the incentives actually come in at the city level -DDA is empowered by the state.

Brownfield is funded by the state at a percentage and is also a pipeline for federal funding.

Right now with the current infrastructure investment act which is the feds and they encourage the resale of tax certificates and even have their own little branch where the public can buy them.

The bottom line with Detroit is they actually have zero say in any of this and that is not right combined without the lack of information concerning weather they are transferable or not.

The taxpayers have a right to know where the money is going and how they are liable for it in the future and how can they protect themselves from unscrupulous ones.

Let’s be honest when you are talking $800m to 1 billion it garners scrutiny,the tax payers also have a civic duty but the city administration also has a duty to provide transparency.

If the taxpayers do not fulfill their fiscal obligations,they get their house taken.

Yes at that time the brownfield credits were available but shortly after that,the governor at the time stopped all incentives across the board,brownfield,historic etc. pulled everything off of the table.

My speculation in the reasoning behind that was shortly after that they put Detroit into bankruptcy,when they pulled all the credits off of the table every project in the city came to an immediate halt,Flip Mr Gilbert a email and ask him about those dark days when everybody in the city and county did not know what was going to happen from one minute to the next ,but motives and games is also a whole nuther thread.

Its all about leveraging money and they cannot leverage non existent funds or future funds one cannot look that far into Detroits future and know what the revenue is going to be,they need cash now and the only way they do that is by leveraging future revenue in order to create cash today.

Total up the tax captures in the city and Detroit for the last 5 years,20 years up the road and unless the population in Detroit doubles in size,do you think they will be showing a positive balance when those notes start coming due?

The hotel is still managed by Marriott, and the new owners have shared plans to spend $16.5 million on renovations and maintenance over two years.

Prior to the sale closing, Oxford Capital's chief executive told Detroit City Council members that the hotel deal hinged on the city approving a 12-year tax freeze valued at about $26 million.

The city ultimately approved the tax abatement earlier this fall.

What is the math on that ?

What that are not telling you is,they took the hotel assuming 77m worth of debt,or what they would tell you if you asked - What about the incentives and tax captures that were used during the funding process in order to put the deal together originally.

And that is now one more property taken offline,for 12 years would you like to receive 26m in exchange for 16.5 in renovations?

So now they can take the money that they would have been obligated to pay in taxes and use that for renovations with a 10m gift on top.