So, what is replacing the brownfield and historic credit programs?

25 Aug 2011

The Michigan Economic Development Corporation (MEDC) announced yesterday that effective October 1, 2011, it has taken the old MEGA, Brownfield and Historic tax credit programs and has recast them as the: (1) Michigan Business Development Program and (2) the Michigan Community Revitalization Program.  This was done ostensibly due to the elimination of the MBT on which those credit programs depended.  However, more likely, this was the Governor’s attempt to put his preferred focus on “business gardening” into action. 

Beginning Oct. 1, the new programs will provide $100 million in incentives for competitive projects in the State which can be in the form of grants, loans, or other economic assistance of up to $10 million each.

According to the MEDC:

  • The Michigan Business Development Program will support businesses that create qualified new jobs and make new investments in Michigan.
  • The Michigan Community Revitalization Program will support projects to revitalize regional urban areas, act as a catalyst for additional investment in a community, reuse vacant or historic buildings, and promote mixed use and sustainable development. 

It is nice that the MEDC is creating two new incentive program and it’s good that the MEDC is focusing on job creation, community redevelopment, benchmarks, flexibility and  transparency.  The problems here are that these programs are smaller than the current $175 Million program the Governor put into place for this year and far smaller than the programs that these programs replace. 

Even more problematic is the fact that roughly eight months after the Governor pulled the plug on the MEGA, brownfield and historic credit programs, is the fact that the MEDC still seems to be “creating” these programs with only a month to go before they launch – there appear to be no publicly available criteria, scoring mechanisms, goals or targets – while it is clearly a big and important job, how can the business community plan to seek these incentives when they don’t know what’s being incentivized or how the two programs will interact?   

This issue is too important to the business community and the future of the State for 8 months to pass and the MEDC still not to have much concrete to show.

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