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Advocacy Blue Arrows

Issue Advisory

Originally posted December 1, 2011
Updated December 6, 2011

Michigan Municipal League Gets Victory on Brownfield Redevelopment Funding

 

LANSING, Michigan (Dec. 1, 2011) - Another major League victory took place this week and this time it involved funding for Brownfield redevelopment projects. The newly revised Community Revitalization Fund bills passed the House during the first week of December and the Senate concurred on Dec. 6. The bills are now on their way to the governor.

Getting funding to clean up community eyesores feeds directly into the League’s overall mission: better communities equals a better Michigan. Read more about the League’s vision for a better Michigan here.

Brownfield Background:
Earlier in the year, the Legislature and Governor eliminated the Brownfield, Historic, and MEGA Tax Credits when they restructured the Michigan Business Tax into the Corporate Income Tax (as of January 1, 2012). They then funded a line in the budget of $100 million for economic development incentives, which was supposed to go towards replacing the credits.

For the last several months, the League has been working with the Michigan Economic Development Corporation (MEDC) and other stakeholders to create a new program that would revitalize existing areas and spend the money on the projects that would aide Brownfield and other areas. This culminated in legislation creating the Community Revitalization Fund (SB 566, 567, 568, 644). 

This program, along with legislation creating the Business Development Fund (SB 556), will tap into the $100 million appropriated for revitalization projects statewide as well as for attracting businesses to Michigan. The Community Revitalization Fund legislation and rules (already passed) have several qualifications that will ensure the dollars go to urban areas for revitalization projects and not for “Greenfield” development.

These bills passed the Senate overwhelmingly, but hit a snag in the House. In Commerce Committee, there was a move to prevent these dollars from being used for obsolete and blighted properties. This would be devastating for communities, as blighted and obsolete properties have been the biggest need in terms of revitalization and have been the most successful part of the Brownfield credits over the last 11 years. To address that issue, the Committee reported the bills with language that included a definition of functionally obsolete property which was the same as the old Brownfield credits language. 

Rep. Jeff Farrington (R-Sterling Heights), however, added an amendment to the bill that would prohibit functionally obsolete property from receiving more than 25% of the total cost of the eligible investment on a single project, and would limit the total investment in any one project to $3 million. This amendment was a major cause for concern for many of our members and the MEDC and Brownfield developers because it would limit the ability to support projects for obsolete and blighted projects that create big investments and jobs in our communities.

Issue Resolution:
The League worked closely with the House Commerce Committee chair Wayne Schmidt (R-Traverse City), the Governor’s office, the MEDC, and developers to have this language removed. On the House floor, the problematic amendment was removed and strong transparency language was added to the bills instead.

The Senate concurred in the Brownfield bills (with our language) on Dec. 6 and the bills are now on their way to the governor. They are expected to be signed into law by the governor before the end of the year, which is imperative to prevent a gap in state aid to important redevelopment projects since the ability to issue credits will end on December 31.

Click here to read the press release.

Click here to read the Inside 208 blog.

Additional Reading about Rebuilding Michigan:

Center for 21st Century Communities

New League book, The Economics of Place: The Value of Building Communities Around People

Economics of Place blog

 

Contacts:
F
or more information about this topic contact the League’s Andy Schor at aschor@mml.org, (517) 908-0300 or Matt Bach, director of communications for the League, at mbach@mml.org or (734) 669-6317.

 

 

 

 

 

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