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POLICY NO, 2008-93(b)
CITY OF MUSKEGON
COMMERCIAL REHABILITATION TAX ABATEMENT DISTRICTS
ACT NO. 210
PUBLIC ACTS OF 2005
1.0 STRATEGIC PLANNING PROCESS
The City Commission, on September 9, 2008, determined that the following
policy is necessary, in order to implement the Commercial Rehabilitation Tax
Abatement Districts, for these reasons:
- New legislation available that will benefit the City of
Muskegon, particularly our commercial areas
- Implementation will encourage the development of commercial
areas that have experienced little or no 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. In the past, the available incentives
for commercial businesses have been minimal. The State of Michigan is now
creating 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 freezing
property taxes at their present value. 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 rehabilitation is judicious, fair, and responsibly
accomplished. The City adopts this policy, not only to encourage the use of tax
abatements for commercial rehabilitation, 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.
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 rehabilitation 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.
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 Rehabilitation Tax Abatement 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 Rehabilitation Tax Abatement
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.
3. Will increase the tax base.
4. Compliance of the petitioner in meeting previous commercial
rehabilitation 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 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
Rehabilitation Tax Abatement District.
10. The value of the rehabilitation must include improvements
ageregating 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 & Economie 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 rehabilitation 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 rehabilitation 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 rehabilitation
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
Sd
(whichever is applicable)
Muskegon Community College
fe
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 Rehabilitation Districts on their 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 Rehabilitation District will note all
terms and conditions to be met by both the applicant and the community,
ifany. The District shall be approved by resolution of the City
Commission to include the boundaries of the district.
A Certificate for a Commercial Rehabilitation Tax Abatement 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 Rehabilitation Tax Abatement District, the length of
the abatement (1-10 years), and any conditions the City Commission
deems appropriate for the issuance of the Certificate.
The County of Muskegon holds the right to reject a commercial
rehabilitation district that has been approved by the City of Muskegon. In
order to reject a commercial rehabilitation district, the Muskegon County
Board of Commissioners must adopt a resolution and provide it to the City
within twenty eight (28) days of the County receiving the resolution from
the City.
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 REHABILITATION TAX ABATEMENT GUIDELINES
The following guidelines are intended to provide direction for determining the
length of all commercial rehabilitation tax exemptions as well as other potential
components of a tax exemption such as employment generation/retention and
site/facility requirements.
Duration ofAbatements
The following section represents the number of years to be granted for
projects.
Standard Exemption:
Real Property 5 Years
New Employment*/Investment Bonus:
4-5 Jobs 1 Year $15,000.00+ 1 Year
6-7 Jobs 2 Years or $25,000.00+ 2 Years
8-9 Jobs 3 Years $40,000.00+ 3 Years
10-11 Jobs 4 Years $80,000.00+ 4 Years
12+ Jobs 5 Years $100,000.00+ 5 Years
* “New Employment” refers to full-time job equivalent
The standard exemption (5 years) will apply to all applications.
Additional years (up to another 5 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 Rehabilitation
Districts Act. Changes made to the facility, other than replacement that
restore or modify the property, together with all appurtenances, to an
economically efficient condition are eligible. This includes major
renovation and modification including, but not necessarily limited to, the
improvement to floor loads, correction of deficient or excessive height,
new or improved fixed building equipment, including heating, ventilation,
and lighting, improved structural support including foundations, improved
roof structure and cover, floor replacement, improve wall placement,
improved exterior and interior appearance of buildings, and other physical
changes required to restore or change the property to an economically
efficient condition. A commercial rehabilitation district must be at least
three (3) acres in size or be located downtown or in a business area. The
project must consist of a building or group of contiguous buildings of
commercial property that is 15 years or older. The rehabilitation costs
must be not less than 10% of the true cash value of the property based
upon the property’s current assessment roll valuation prior to the
rehabilitation of the facility. The request to include personal property for
abatement will be dealt with on a case by case basis. The commencement
of the rehabilitation of the facility cannot occur before the establishment
of the commercial rehabilitation 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.
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Adopted: October 28, 2008. ‘ a\VWrxy 24
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Ann Marie Becker, MMC
City Clerk
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