Governor Snyder faces an environmental conundrum

9 Feb 2011

Kennedy Square redevelopment

Uniroyal Plant demolition

Governor Snyder has proposed to replace the MBT with a new 6% corporate tax and stop issuing most, if not all, credits previously issued to incentivize certain actions.  One credit that, for now, has not been proposed to continue under the new corporate tax is the MBT (Michigan Business Tax) Brownfield Tax Credit.  This program is singularly unique among the suite of Brownfield redevelopment incentives available in Michigan.  The loans and Brownfield tax increment financing programs which the State has adopted are intended to “level the playing field” between Brownfields and Greenfields by allowing funding of remedial measures to restore Brownfield properties to a useable condition. 

Without this key tool to support riskier projects involving developments of environmentally impaired properties, it is unclear whether these projects, which help revitalize our State, will happen. However, the MBT credit actually “tips the scales” in favor of Brownfield sites by providing a saleable tax credit on the order of up to 15% of site development expenditures.  The State can’t issue more than $240 Million in credits (against some $1.6 Billion in investment) per year. The credit often funds developers taking a chance on typically urban, decayed and/or obsolete Brownfield locations. Since 2000, there have been well over 400 projects that have been redeveloped, or are being redeveloped, in reliance on these Brownfield Credits reflecting investments in the State of over 6 Billion Dollars.  The Governor says he wants these redevelopments – but they have a cost – the benefits far outweigh the cost in my view both in investment and redevelopment.  This is a credit that should stay.

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