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POLICY NO. _2009-09(c)
CITY OF MUSKEGON
COMMERCIAL REDEVELOPMENT DISTRICTS
ACT NO. 255
PUBLIC ACTS OF 1978
1.0 STRATEGIC PLANNING PROCESS
The City Commission, on January 27, 2009, determined that the following policy
is necessary in order to implement a Commercial Redevelopment District. These
districts should be considered for the following reasons:
- Legislation available that will benefit the City of Muskegon,
particularly our commercial areas
- Implementation will encourage the development/
redevelopment of commercial areas that have experienced little
or no development / redevelopment in recent years
- To ensure that the redevelopment that does take place is
appropriate for the districts identified
2.0 PURPOSE
The Muskegon City Commission is a strong advocate of economic development
activities, programs, and structures designed to create and promote employment
opportunities and expand the local tax base. The State of Michigan has created
incentives that can be used on a local level to spark business development and
building rehabilitation. The purpose of this policy is to stimulate business growth
and improve commercial areas of the city by exempting general ad valorem taxes
and replacing them with a specific commercial facilities tax. The City
Commission believes that it should be an active participant and a leader where
appropriate in the economic development of the City.
The City of Muskegon supports the establishment of policies, programs, and
facilities, permitted by law, which will carry out this policy. For the City to
accomplish these purposes in an orderly fashion, it must be assured that the use of
tax abatements for commercial redevelopment is judicious, fair, and responsibly
accomplished. The City adopts this policy, not only to encourage the use of tax
abatements for commercial redevelopment, but also to articulate the reasonable
expectations of performance by those directly benefiting from the policy.
3.0 POLICY
A. It is the policy of the City of Muskegon to provide commercial tax
abatements to qualifying applicants under certain State laws. The
policy will increase the tax base of the community, increase the
number of residents in the community, attract new business and
industry, and will result in the expansion of businesses.
B. Multiple certificates by the same applicant are permitted, if
authorized by State law, based upon previous performance and
compliance with projections and conditions of previous
applications. Specific monitoring techniques will be employed
which analyze the results of the redevelopment certificate program
overall and specifically of each applicant on an annual basis. An
annual performance report will be prepared for review by the
Commission to determine the need for amendment to this policy.
Cc, It is the intent of the City of Muskegon that each application be
reviewed against this policy, procedures and the annual reports to
determine on a case-by-case basis that the application meets the
goals and objectives of the City.
3.1 Commercial Facilities Exemption Certificate Criteria
The criteria to be considered by the City Commission in approval of
applications, including applications for the establishment of districts, as
well as the issuance of certificates, are the following:
1. Compliance with the Commercial Redevelopment Districts Policy
as adopted by the City Commission.
Completion of facilities must be calculated to, and will at the time
of issuance of the certificate have the reasonable likelihood to,
increase commercial activity, create employment, retain
employment, prevent a loss of employment, revitalize urban areas,
or increase the number of residents in the community in which the
facility is situated.
Will increase the tax base.
Compliance of the petitioner in meeting previous commercial
redevelopment requirements, and employment goals and
investment projections (if relevant).
5. The impacts on public right of way and general circulation
patterns.
6. General site improvements such as paving, parking areas, increases
in landscaping ground vegetation, and signage improvements.
7. The history of the applicant in payment of taxes, water bills, or any
other obligations to the City. “Applicant,” for this purpose, shall
include any entity controlled by the principal officers or owners of
the entity signing the present application. The City shall not issue
a certificate or approve a district in cases where the “applicant” as
here defined, is delinquent in any tax, water bill, or obligation to
the City.
8. The applicant must state, in writing, that the rehabilitation of the
facility or the development of the site would not be undertaken
without the applicant’s receipt of the exemption certificate.
9. The location of the proposed improvements and whether the
general area has already been designated as a Commercial
Redevelopment Tax Abatement District.
10.The value of the rehabilitation must include improvements
aggregating 10 % or more of the true cash value of the property at
the commencement of the rehabilitation of property.
11. The impact on property values in the general area of the project.
11. The consistency of the project with adopted codes, ordinances and
plans.
12. Other considerations considered unique or of benefit to the
community.
3.2 Administration & Monitoring Procedures
The City of Muskegon Planning & Economic Development Department
shall be the administrator of the application process on commercial tax
abatement certificates. Prior to presenting an application to the City
Commission for approval, the Planning & Economic Development
Department, in conjunction with any other appropriate city departments,
shall review all applications for compliance with this policy.
For each approved application, the property owner receiving the
commercial facilities exemption certificate shall submit annual monitoring
reports. These reports will include the following information:
- New Jobs Created
- Workforce Breakdown (by race and gender)
- Capital Investment Expended
- Status of any Other Requirements Set Forth by the City
Commission
The City of Muskegon shall provide the report forms to the owner in the
month of November for year-end calculations.
The Planning & Economic Development Department shall provide an
annual report on the status of active commercial facilities exemption
certificates to the City Commission in February of the following year.
(i.e. 2008 annual report shall be submitted in February of 2009).
3.3 Application Procedures
The following procedures are intended to implement the foregoing
policy and provide complete applications upon which to base a
decision for approval or denial. It is intended that the administration
of this procedure and the application process be efficient and
flexible so as to meet the applicant’s needs while complying with the
policy as adopted.
L. Applications
a. Application forms provided by the City shall be filled out
completely and additional required documents shall be attached
when submitted to the City Clerk.
b, All fees shall be paid with the application. The Clerk will not
process any application without the payment of all required fees.
2. Processing of Applications; Schedule. The application will be
processed on the following schedule.
a. Properly completed application for commercial facilities
exemption certificates will be submitted to the City Clerk. Copies
will be forwarded to the Planning & Economic Development
Department and other appropriate person(s). The Clerk will also
notify in writing the City Assessor and the legislative body of each
taxing unit that levies ad valorem property taxes in the City of
Muskegon.
Meeting scheduled with applicant to go over application, missing
items, etc.
A public hearing will be scheduled and resolution drafted to
approve a district or certificate.
A public hearing notice prepared by Planning & Economic
Development staff for publication and forwarded to the City Clerk
for publication in the Muskegon Chronicle, Public notice of the
hearing shall not be less than 10 days or more than 30 days before
the date of the hearing.
Certified mailing to property owners and taxing authorities with
notification of application and public hearing date prepared and
executed (if applicable). Notice will be given to all of the
following:
@ Property Owner
Business Owner (if other than property owner)
¢ Muskegon School District or Orchard View School District
(whichever is applicable)
Muskegon Community College
¢ ¢
oof
Muskegon Area Intermediate School District
City of Muskegon Assessor’s office
County of Muskegon
Time requirements set forth in any applicable statute or regulation
shall be observed. This includes 60 days for the City Commission
to approve or disapprove the certificate and resolution authorizing
the certificate, after the completed application is received by the
City Clerk, and 60 days for the State Tax Commission
(“commission”) to approve or disapprove the resolution, after the
commission receives the application and resolution adopted by the
City Commission.
After approval by City Commission, the City Clerk will review the
application and attachments for completeness, then sign the
application and send copies to the appropriate persons. A copy of
the completed application will be forwarded to the property owner
and the original application to the Commission. The resolution is
not effective unless approved by the commission.
3.4 Establishing Districts & Approving Certificates
The City Commission, on its own initiative, may choose to establish
Commercial Redevelopment Districts on its own. They may establish one
or more districts that may consist of one or more parcels or tracts of land
or a portion of a parcel or tract of land. It is also possible for the City
Commission to establish a district if a written request is filed by the owner
or owners of property comprising at least 50% of all taxable value of the
property located within a proposed commercial priority rehabilitation
district. The written request must be filed with the City Clerk. The
resolution creating the Commercial Redevelopment District will note all
terms and conditions to be met by both the applicant and the community,
if any. The District shall be approved by resolution of the City
Commission to include the boundaries of the district.
A Commercial Redevelopment Exemption Certificate shall be approved.
only after the creation of the District. The Certificate shall be approved by
resolution of the City Commission to include the boundaries of the
Commercial Redevelopment District, the length of the abatement (6-12
years), and any conditions the City Commission deems appropriate for the
issuance of the Certificate.
3.5 Filing and Compliance Monitoring Fee
The applicant shall pay the filing and monitoring fee at the time the
application is made. No applications shall be submitted to City
Commission for approval prior to the payment of this fee. The fee will be
equal to 2% of the abated taxes (based on the amount of investment on the
first full year of service) or a maximum of $1,000.
CITY OF MUSKEGON
COMMERCIAL FACILITIES EXEMPTION CERTIFICATE GUIDELINES
The following guidelines are intended to provide direction for determining the
length of all commercial redevelopment certificates as well as other potential
components of a tax exemption such as employment generation/retention and
site/facility requirements.
A. Duration of Abatements
The following section represents the number of years to be granted for
projects.
Standard Exemption:
Real Property 6 Years
Restored facility
New Employment*/Investment Bonus:
3-5 Jobs 1 Year $15,000.00+ 1 Year
6-8 Jobs 2Years or $25,000.00+ 2 Years
9-11 Jobs 3 Years $40,000.00+ 3 Years
12-14 Jobs 4 Years $80,000.00+ 4 Years
15-17 Jobs 5 Years $100,000.00+ 5 Years
18-20 Jobs 6 Years $125,000.00+ 6 Years
Replacement or New facility
New Employment*/Investment Bonus:
2-4 Jobs 1 Year $500,000.00+ 1 Year
5-8 Jobs 2 Years or $750,000.00+ 2 Years
9-12 Jobs 3 Years $1,000,000.00+ 3 Years
13-16 Jobs 4 Years $3,000,000.00+ 4 Years
17-20 Jobs 5 Years $5,000,000.00+ 5 Years
21+ Jobs 6 Years $7,000,000.00+ 6 Years
* “New Employment” refers to full-time job equivalent
The standard exemption (6 years) will apply to all applications.
Additional years (up to another 6 years) may be added to the certificate
later (using above criteria), if additional improvements and/or jobs are
added within the time period that the original exemption was granted. The
applicant will then need to request an amendment to their original
application, from the City of Muskegon. The resolution adopted by the
City Commission at the time of granting the original certificate will
indicate the factors, criteria and objectives to be considered in deciding
whether to grant an extension.
The effective date of the certificate is December 31 immediately following
the issuance of the certificate. However, the certificate may not exceed
ten (10) years after the completion of the qualified facility. Thus,
depending upon the dates of construction and application, a certificate
may be valid for only nine (9) years.
B. Site/Facility Requirements
Improvements made shall conform to the Commercial Redevelopment
Act. Commercial property eligible for an exemption certificate includes
land improvements classified as real property and either completed or in
the process of construction, the primary purpose and use of which is the
operation of a commercial business enterprise including office,
engineering, research and development, warehousing parts distribution,
retail sales, and other commercial facilities. Real property that is leased
from a tax exempt organization and classified as personal property for ad
valorem property tax purposes is also eligible for an exemption certificate.
A facility can be a “replacement facility,” a “restored facility,” or a “new
facility.”
A replacement facility results from the complete or partial demolition of
“obsolete” commercial property and the reconstruction or installation of
new property of similar utility. A restored facility is defined as changes to
obsolete commercial property other than replacement to restore the
property to an economically efficient condition. Obsolete commercial
property means commercial property the condition of which is impaired
due to changes in design, construction, technology, or improved
production processes, or damage due to fire, natural disaster, or general
neglect. Restoration expenditures totaling less than 10% of the true cash
value of the commercial facility are considered delayed maintenance and
do not qualify for an exemption. A new facility is defined as new
commercial property other than a replacement facility to be built in a
redevelopment district.
The commencement of the redevelopment of the facility cannot occur
before the establishment of the commercial redevelopment district.
Cc. Employment Requirements
All tax abatement applicants are encouraged to have a diverse labor force.
The Company shall also agree to work with the City's Affirmative Action
Director to market and publish notices regarding employment
opportunities to underserved populations.
All new jobs promised at the time of application must be filled within two
years and must be maintained over the life of the abatement. In the event
the employment is not maintained over the life of the abatement, the City
reserves the right to decrease the abatement by the number of bonus years
that were given directly for that employment.
Adopted: January 27, 2009.
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Amn Marie Becker, MMC
City Clerk
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