Incentives for Brownfield Redevelopment Dickinson County March 2020 - - PowerPoint PPT Presentation

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Incentives for Brownfield Redevelopment Dickinson County March 2020 - - PowerPoint PPT Presentation

Sep 17, 2022 382 likes •846 views

Incentives for Brownfield Redevelopment Dickinson County March 2020 Investing in Community-led Growth MEDCs mission is executed through a strategy focused on three, linked pillars: Supporting business growth and attraction

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Incentives for Brownfield Redevelopment

Dickinson County March 2020

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MEDC’s mission is executed through a strategy focused on three, linked pillars:

  • Supporting business growth and attraction
  • Fostering community vitality
  • Promoting a positive image of Michigan as

a business location and travel destination

Investing in Community-led Growth

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The goal of MEDC’s business development program is to

DEVELOP, GROW AND ATTRACT

business here in the state of Michigan.

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BUSINESS DEVELOPMENT

  • Growth & Development
  • Market Development
  • Global Business Development
  • International Business
  • Defense
  • Cybersecurity
  • Business Innovation
  • Entrepreneurship & Innovation
  • Pure Michigan Business Connect
  • International Trade
  • PlanetM
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….Perfect for your brownfield priority sites!!

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COMMUNITY DEVELOPMENT FUNDING PRIORITIES

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LOCAL AND REGIONAL IMPACT

  • Priority project with community financial support
  • Project supports local master plan and economic

development strategy

  • Significant taxable value increase
  • Located within RRC engaged /certified community
  • Located in a Michigan Main Street community
  • Located in a geographically disadvantaged area

Funding Priorities

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  • Mixed-income, mixed use, and multi-story developments;
  • Urban & universal design;
  • Revitalization of a historic structures;
  • Low-impact and sustainable development approaches;
  • Significant brownfield conditions;
  • Significant square footage being revitalized and activated.

PLACE

Funding Priorities

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ECONOMIC AND FINANCIAL

  • Financially feasible project after gap financing;
  • All other potential funding resources have been maximized;
  • Reasonable costs;
  • Significant financial contribution by developer/owner (10–20 percent);
  • High ratio of private dollars to public dollars (state and federal funding).

Funding Priorities

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BROWNFIELD

Tax Increment Financing

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Act 381 of 1996 Property/building that is contaminated, functionally obsolete, blighted, historic resource, or Land Bank owned/operated

  • MEDC administers non-environmental aspects
  • EGLE administers environmental aspects

Brownfield Tax In Increment Financing (B (BF TIF IF)

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PROPERTY ELIGIBILITY

Facility Property where a hazardous substance in excess of concentrations that satisfy the cleanup criteria for residential use. Phase I and Phase II Baseline Environmental Assessment necessary.

Brownfield and Community Revitalization Program

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PROPERTY ELIGIBILITY

Blighted (1) Attractive nuisance to children, utilities permanently disconnected, fire hazard, subsurface debris, tax reverted (2) Designated by local government; (3) Under the control of a Land Bank

Forest Arms Building - Detroit

Brownfield and Community Revitalization Program

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PROPERTY ELIGIBILITY

Functionally Obsolete Unable to perform the function it was originally intended (Michigan Advanced Assessing Officer or Michigan Master Assessing Officer declaration required)

Former Board of Water and Light - Lansing Accident Fund Building

Brownfield and Community Revitalization Program

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PROPERTY ELIGIBILITY

Historic Historic building or structure located designated by the national register of historic places, the state register of historic sites, or a contributing building in designated historic district. Sherbrook Apartments - Detroit Comfort Station – Lansing

Brownfield and Community Revitalization Program

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PROPERTY ELIGIBILITY Adjacent & Contiguous

Brownfield and Community Revitalization Program

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Act 381: Brownfield Plans & Work Plans

A Brownfield Plan establishes:

  • “Eligible property” included in project/Plan.
  • Why it’s eligible (costs).
  • Indicates that the local jurisdiction is supportive of the tax

increment revenue (TIR) capture.

  • Sets the maximum amount of TIR that can be captured.
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In an Act 381 Work Plan, the capture may include state taxes, both school operating and state education tax.

  • Also includes local taxes
  • Ratio of Local to State mills must be preserved
  • Debt millages cannot be captured

Must occur on eligible property that is included in a locally approved Brownfield Plan.

  • Plan must identify the eligible activities and their costs.

Act 381: Brownfield Plans & Work Plans

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Act 381 : Eligible Activities

Eligible Non-Environmental Activities:

  • Brownfield Plan and Act 381 Work Plan Preparation
  • Interest
  • Demolition
  • Lead and asbestos study and abatement

+ in Core Communities , these additional activities:

  • Site Preparation
  • Infrastructure
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Act 381 : Eligible Activities

Environmental Activities:

  • Department Specific Activities:
  • Site Assessments
  • BEAs
  • Due Care Planning
  • Pre-Demo/Hazardous Materials,

Asbestos, Mold, & Lead Surveys

  • Due Care
  • Response Activities
  • Including demolition and abatement
  • Environmental Insurance
  • Interest

Lake Superior State Center for Fresh Water Research and Education Sault Ste. Marie

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Work Plan Scoping and Approval Process

Step 1: Identification of a potential Brownfield redevelopment

  • project. Call Jen or Vicki!

Step 2: Local BRA develops Brownfield Plan Step 3: Local BRA and Municipality (taxing jurisdiction) approve Plan via resolution Step 4: State review of the Work Plan (if seeking state mills) EGLE , MEDC, or both! Step 5: MSF approval required for all Act 381 Work Plans with MSF activities seeking state capture Step 6: Project Initiation and Completion → TIR

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So How Long Does it Take?

  • Answer: It Depends.
  • Local approval times vary. Lois???
  • MSF review and board action typically

takes at least 8 – 12 weeks.

  • Once MSF and/or EGLE approves,

project and TIR are managed locally

  • BRAs submit annual reports to MEDC

(activities and capture)

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COMMUNITY REVITALIZATION PROGRAM (CRP)

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State Gap Financing for Revitalization Projects

  • Competitive. Need-based. Performance-based.

Annual appropriation from Legislature; shared pool of dollars with Business Development Program Grants, direct loans, loan participation, equity investments Grants up to $500k per parameters $10M max into any single project Fills gaps of up to 50% development costs, in qualified communities

Community Revitalization Program

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Downtown & Traditional Commercial District Tool Funding Criteria reflects MEDC CD Funding Priorities

Community Revitalization Program

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CRP Evaluation Criteria

  • Debt Coverage Ratio (DCR) typically greater than
  • r equal to 1.2:1
  • Owner equity minimum of 10% (net of dev. Fee)
  • Developer fees typically not to exceed 4% of total

development cost

  • Developer return generally limited to 12% or less
  • MCRP investment generally will not exceed 30

years

  • Maximum incentive is typically limited at 25% of

eligible investment for historic resources and 20%

  • therwise, and up to 50% in communities smaller

than 15,000 pop.

Structuring Highlights

(CRP Parameters)

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Types of Support – What else is out there?

STATE PROGRAMS

  • Community Development Block

Grant (CDBG)

  • Public Spaces, Community

Places

  • EGLE grants and loans for

brownfield sites

  • EGLE refined petroleum fund
  • EGLE brownfield assessments
  • Small Business Development

Center

  • Michigan Energy Office
  • MDARD economic development

FEDERAL PROGRAMS and MORE!

  • Historic Tax Credits
  • New Market Tax Credits
  • Low Income Housing Tax Credits
  • HOME
  • HUD Loans and Guarantee

Programs

  • USDA RD grants or loans
  • EPA
  • Opportunity Zones
  • Locally approved tax incentives
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INCENTIVES IRL

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City of f Menominee Blight Elimination at L Lloyd House II II

PROJECT: Historic rehabilitation of the 15,000 sq ft downtown building,

  • riginally home to the Oddfellow

fraternal organization, transformed a long-time vacant, blighted structure into 13 market rate residential units and 2 commercial spaces, in the Historic Waterfront District of downtown Menominee.

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City of f Menominee Blight Elimination at L Lloyd House II II

MEDC INVESTMENT: $870,000 Community Development Block Grant FEDERAL HITORIC TAX CREDITS: $443,000 PRIVATE INVESTMENT: $1,390,500 COMMUNITY INVESTMENT: OPRA tax incentive valued at $387,600 over 12 years

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EGLE: Mike Gurnee, 269-568-1291 gurneem1@michigan.gov Janet Michaluk, 517-643-0314 michalukj@michigan.gov

MEDC:

Jen Tucker, 906-201-4367 tuckerj6@michigan.org Vicki Schwab, 906-235-9208 schwabv@michigan.org

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