City, County Could Get Added Revenue In Proposed Tax Change
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Monday night the City Commission will consider a Commercial Rehabilitation (CRB) Act District on the former Mill End Store property.
Mill End Store - Downtown Bay City (MI)
The long-term finances of Bay City and Bay County may get a boost -- but not until after 10 years.
Bay County officials want all property taxes to flow to government rather than privately-controlled development boards.
The target property in the limelight now is the proposed $8 million Mill End Store site commercial-condominium development envisioned by developer Paul Rowley.
The implications of that move will come to light more fully Monday night at the meeting of the Bay City Commission.
Tax increment financing districts like the Downtown Bay City Development Authority (DDA - run by the Downtown Management Board) and the Monitor Township Downtown Development Authority now absorb most of the revenues and plow them back into projects designed for growth.
The county has already sunsetted a development by Fabiano Brothers that is under construction at Mackinaw Road and US-10 and is putting the clamps on additional tax revenues flowing to the Monitor DDA.
County officials have said, in effect, that government can spend the tax dollars more effectively than private DDA boards.
(An explanation and philosophical discussion of tax increment financing in Michigan is available at http://www.emich.edu/public/geo/557book/d232.tif.html)
Monday night the City Commission will consider a Commercial Rehabilitation (CRB) Act District on the former Mill End Store property.
City Manager Robert V. Belleman has written to commissioners:
"You may recall that your adopted a resolution at the Sept. 24, 2007 meeting in support of Rep. (Jeff) Mayes efforts to modify the then-current Commercial Rehabilitation Act and allow existing structures like the Mill End building to be demolished and still receive the ten year tax incentive provided under the Commercial Rehabilitation Act. That modification was signed into law."
But the county reportedly has asked that the idea of a Mill End CRB be scrapped, an action that would remove the property from the Water Street Tax Increment Financing District.
If that happens, after the requested 10-year tax abatement, the city would get an added $85,600 and the county an extra $43,760 each year.
The revenue amounts are estimated based on a $4 million tax assessment of an $8 million project (tax assessments being based generally on 50 percent of value).
"In essence, Bay County is asking the City Commission to enter into an agreement that would allow all taxing jurisdictions to receive the full amount of the new taxes created by the proposed development after the certificate issued expires," explained City Manager Robert V. Belleman.
Mr. Belleman said the issue must be discussed at the Sept. 8 meeting since the County Executive, under law, has 28 days to act on the CRB if it wins city approval.
Mr. Belleman reported that on August 27 a meeting was held by himself, Mayor Charles Brunner, Steve Black, assistant city manager, and County Executive Thomas L. Hickner, County Board Chair Pat Beson, County Commissioner Brian Elder, Bob Redmond, county commission legislative-financial aide, DDA Chair Dave Green and DDA/DMB Executive Director Candace Bales to discuss the county's request to remove the Mill End property from the Water Street Tax Increment Financing Authority district.
While the city's current tax rate is 21.4 mills ($21.40 per $1,000 of taxable value) and the county's is 10.94 mills, other units involved would be schools and Delta College.
The county's tax rate is divided thusly: 5.7528 for county government, 2.2 library, .45 mosquito control, .50 senior citizens, .70 central dispatch, .50 medical care facility, .0958 historical society, .75 transportation, and gypsy moth (currently not levied).
In a related development, the city is suing County Treasurer Rick Brezezinski to sell four tax-reverted properties the city wants to rehab for back taxes of $32,947.
The city has asked circuit court to direct the treasurer to release the properties. Mr. Brezezinski, however, says the properties can be auctioned for much more -- he says they are worth an estimated $300,000 -- and is refusing the city's check.
The main question, according to Brezezinski, is whether rehabbing tax-reverted properties for gain falls within the city's right to buy the homes at a minimum price prior to auction.
He has suggested establishing a "land bank" in cooperation with the city to repair foreclosed properties and put them back on the market.
Properties involved are 1906 Broadway, 1216 Park Avenue, 105 W. Thomas and 606 Wilson.###
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