Snyder may seek increase in incentives for business [[and historic/brownfield credits)

[begingri]

Snyder said more help may especially be needed in the areas of brownfield credits for environmentally contaminated sites and tax credits for heritage properties. He said there may be a need for pots of money specifically targeted at those areas, inside the larger pot of incentive money.

Bing camp encouraged

Detroit Mayor Dave Bing and Lansing Mayor Virg Bernero have criticized Snyder's plan to kill the brownfield program, saying the move will make it tougher for their cities to bounce back. They applauded the apparent change of heart.

"I'm delighted to hear that the governor has obviously heard from the folks on the ground … and is willing to consider making adjustments," Bernero said.

"These are two key tools that are absolutely vital to aging cities. We don't want our epitaphs written."

From The Detroit News: http://detnews.com/article/20110326/...#ixzz1HiyNBvBP

[English]

Definitely a silver lining. Thanks for the link.

[Novine]

I don't see how the math works. The Senate Republicans don't want to sign onto the pension tax. Even if they get Snyder to agree to going to 6.75% on the corporate income tax, they have to slash another $250 million in funding from Snyder's already lean budget to make that up. If that's the case, I don't see where money comes for more incentives.

[brizee]

"We might have too small a pot there," Snyder said, referring to funds set aside in his budget to attract new industry to Michigan. "Fifty million may not be adequate."

Then WTF did you propose it if you're admitting a month later it wasn't exactly thought through?

A) He's finding out a government is not business where the CEO's word is divine.
B) He's caught a sniff of exactly what's heading his way in July. Chicken with elderly voters isn't a game you want to play.

I still hope he gets thrown out this summer, but it is satisfying when blowhards and tough-talkers have to eat humble pie once in a while.

[detmsp]

I think he's just doing what any smart politician does... You ask for more than you really want so that you have things to give up in negotiations with the opposition

[Locke09]

Both papers report that he is not budging at all on the pension tax. And the Republicans only proposed exempting existing pensioners. He is only considering budging on the business incentives at this time [[including brownfield credits). He has to make sure he hasn't been overly tough on the business community. It's probably been keeping him awake at night.

[Richard]

Depends on who the bank is , VC's do not need brownfield incentives it is all about pump and dump for the quick buck.Once the competition is eliminated.

Renaissance is run by Chris Rizik, who serves as CEO and fund manager. Rizik, who’s also an Xconomist, was once an attorney at Dickinson Wright, running the law firm’s small business practice. After 13 years there he was recruited by former Gateway Computer president [[later chairman and interim CEO) and now Michigan gubernatorial candidate Rick Snyder to be his partner in Snyder’s first venture fund, Avalon Investments. Venture capital was a pretty nascent field in Michigan when Avalon got started in late 1997; three years later Snyder, Rizik, and colleagues raised a second fund, Ardesta.

http://www.xconomy.com/detroit/2010/...s-chris-rizik/

[NorthEndere]

So, so, so glad to hear this. Even if you lower business taxes, corporations don't generally want to pay for clean-up, period, and when you factor in how many other states uses brownfield type credits and such, cutting them out entirely would make already hard to develop properties and sites [[already located in declined urban areas) nearly impossible. I hate that businesses won't pay for the clean-up of sites, generally, but it's just the reality. Until things change around us, this really is unilaterally disarming.

I also agree, though, with Snyder that there is perhaps a way to rein these things in. I mean, in my city I've seen the credits used to clean-up sites that were then developed as fast-food joints or crappy retail strips. It seems kind of the anti-thesis of what these were offered to do which is to help urban development compete against suburban [[particulary greenfield exurban) development.

[Novine]

One way in which Snyder's change is screwed up is that he didn't make any effort to touch tax abatements. While places like Detroit and Grand Rapids often grant them to offset the higher cost to redevelop brownfield sites, many suburban communities hand them out like candy at Halloween. With Snyder pulling the urban-oriented tax credits off the table, the fact that suburban communities can still offer tax abatements tips the tables even further towards greenfield sites.

[BVos]

What I interpret from the Snews article when Synder says he's going to reign in the brownfield tax credit to its original intent, he means he's going to target the credit to true brownfield sites, not the Michigan definition of brownfield which includes contaminated sites as well as "functionally obsolete" sites where there is no actual contamination present [[not even asbestos or lead) but the building is a dinosaur. This is where many suburbs were handing out brownfield tax credits to dead/dying strip malls and it was just icing on the cake. Many of these strip mall deals could make it with or without the brownfield credits. So I support this development. It's time to do it.

I also think projects using brownfield tax credits need to prove that the project actually needs the credits. I've seen many projects where it qualifies for say $2 million in tax credits per the state formula and the state gives the project $2 million, but the proforma submitted by the developer to the state shows that the project only needs say $700k in tax credits to fill the financing gap. I've also seen projects where no brownfield credits at all are needed to get financed, yet they apply and receive credits simply because it's free money on the table.

[Novine]

We're talking about two different things. The property tax abatement handed out in most suburban communities isn't for brownfields. It's for commercial and industrial developments and they aren't being touched by Snyder. The same points you made about brownfield credits could be applied to those abatements but Snyder doesn't appear to be willing to go after them.

[BVos]

I agree with you there Novine. The Industrial Facilities tax abatements are pretty much a zero-sum game failure no matter who has evaluated them. However there's a pretty big lobby behind these things, many of them staunch Republicans, which is probably another reason why Snyder didn't touch them. A tax abatement for urban=Democratic areas [[i.e. brownfields), it's on the chopping block. An abatement for suburban/exurban=Republican areas, it's sacred.

[Baselinepunk]

I think we should all just go to Lansing and just Number 6 them.