Jackson made the comments here Monday at an official groundbreaking ceremony for downtown’s latest example of a major redevelopment made possible by the state’s historic preservation and brownfield redevelopment credits: The planned $53 million renovation of the Broderick Tower into mostly apartments.
Jackson said he and other economic development officials from across the state have met at least six times since February with Snyder and officials from the Michigan Economic Development Corp., which approves the state’s current tax incentives. Talks continue to hammer out details about broad-based relief that would keep urban development going.
Snyder’s office did not return calls Monday, but Michigan Economic Development Corp. spokesman Michael Shore confirmed the meetings have happened.
“The essence of what we do won’t change,” Shore said. “The (tax) support will continue.”
The 34-story Broderick building in Grand Circus Park has been mostly empty and decaying since 1985. Many Detroit Tigers fans know the Broderick Tower, designed by Louis and Paul Kamper, as the big, blighted building that can be seen from the seats inside the nearby Comerica Park baseball stadium.
The head of Detroit’s economic growth agency said Monday he is confident Gov. Rick Snyder will maintain tax relief for major urban developments even as he tries to kill state tax incentives used in virtually all downtown developments.
“The names (of the tax credits) may change, but the support of the governor is there,” said George Jackson, president and CEO of the Detroit Economic Growth Corp. “One thing I can assure you, Gov. Snyder is very sincere in regards to the importance of the city of Detroit, and we’ve been working very well with (Snyder) toward a solution.”
Plans call for constructing 127 apartment units, including two-story units that could fetch up to $2,700 a month in rent, according to Motown Construction Partners LLC, which owns the building. The low end would be $600-a-month studios.
The ground floor is planned to be a sports bar. The second and third floors will be used for retail. Construction is scheduled to be completed by September 2012.
The state tax credits as well as some federal tax credits will help offset nearly half of the $53 million development costs if things go as planned, the owners said.
The current tax incentives help fill the gap in financing that often occurs in development deals in downtown Detroit, Jackson said. The Michigan Historic Preservation Network said the tax credits have leveraged nearly $1.5 billion in direct rehabilitation activity and created 36,000 jobs since their inception in 1999.
But Snyder proposed in his executive budget for fiscal years 2012 and 2013 to eliminate all state tax credits. That includes the historic preservation tax credit and brownfield redevelopment credit, which would expire after the state has honored existing commitments.
Any new economic development incentive would be awarded through the appropriations process and reviewed for effectiveness.
A Michigan Chamber of Commerce official also seemed certain tax relief would be created for urban development projects.
“I don’t think Gov. Snyder will simply take that incentive away. It’s more like refocusing,” said Tricia Kinley, the chamber’s senior director of tax policy and regulatory reform.
“Developers have a lot of very good projects that are tangible and successful that give them a really good case for their argument,” Kinley said
By Louis Aguilar, The Detroit News