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POLICY NO. _2000-53 (d)
CITY OF MUSKEGON
INDUSTRIAL FACILITIES TAX EXEMPTIONS
ACT 198 of 1974
1.0 STRATEGIC PLANNING PROCESS
The City Commission, in May2000, determined that the following policy is
necessary to replace the former Industrial Facilities Exemption Policy of 1990 for
the following reasons:
- Significant amendments have been made to the enabling
legislation (P.A. 198 of 1974)
- Necessity to Compete in a Global Economy
- To Encourage the Diversification and Technological
Advancement of the Local Economy
This policy of the City of Muskegon continues to be endorsed by the City
Commission as a result of the identification of specific goals and objectives
through a Strategic Planning Process conducted by the City Commission and
Administration in February 1990.
2.0 PURPOSE
The Muskegon City Commissionis a strong advocate of economic development
activities, programs, and structures designed to create and promote employment
opportunities and expand the local tax base through the retention, rehabilitation,
and expansion of existing businesses and industries, the expansion and/or
retention of employment opportunities for all, with particular attention to
opportunities for women, minorities, and the disadvantaged. The purpose. of this
policy has been expanded to encourage the diversification of the local economy
and the creation, retention, or attraction of technology sector employment. 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 is judicious, fair, and responsibly accomplished. The City adopts
this policy, not only to encourage the use of tax abatements, but 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 tax abatements
to qualifying applicants under certain State laws. The policy will
increase the tax base of the commumity, attract new business,
housing and industry, and will result in the expansion,
modernization, and rehabilitation of existing businesses, industrial
facilities and housing.
Multiple abatements 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 tax abatement program overall and
specifically of each applicant om 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.l 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 tax abatement policy as adopted by the City
Commission.
Increased employment and tax base of the project.
The compliance of the petitioner in meeting previous tax
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abatement investment and employment goals and investment
projections.
Requirements for additional public safety services.
Impacts on water supply systems, sanitary and storm sewer
systems.
Impacts on air and water quality, solid waste generation, or
reduction.
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Nuisance consideration such as dust, noise, glare, or vibration -
emissions,
Use of Muskegon County and more specifically City of Musiegon
labor or contractors, especially those that are minority or female
owned and operated.
Impacts on public right of way and general circulation patterns,
. Potential for general site aesthetics considerations such as paving,
parking areas, increases in landscaping ground vegetation, and
signage improvements.
11. 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.
12. The location of the proposed improvements and whether the
general area is or was characterized by obsolete commercial or
industrial property and a decline in commercial or industrial
activity.
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13. The size and extent of the capital outlay and its relative size to the
existing value of the property.
14. The impact on property values in the general area of the project.
15, The extent of providing a service need or commercial or industrial
activity currently not available in the market area.
16. The impact of the property improvement or tax abatement on
competitors in the general area of the project and Citywide.
17. The project's capacity to diversify the local economic base and/or
increase the technological capabilities of the applicant.
18. The extent to which the project can be serviced by existing streets,
utilities, police, fire, and other municipal operations.
20. The consistency of the project with adopted codes, ordinances and
plans.
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21. Performance in fulfilling construction and employment estimates
as stated in preVious approved abatement applications.
22. 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 tax abatements.
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.
The Affirmative Action Department, in conjunction with the Planning &
Economic Development Department, shall be responsible for the
monitoring of approved applications for conformance with this policy.
For each approved application, the company receiving the abatement 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 company in
the month of November for year-end calculations.
The Planning & Economic Development and Affirmative Action
Departments shall provide an annual report on the status of active tax
abatements to the City Commission in February of the following year.
(i.e. 2000 annual report shall be submitted in February of 2001).
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
Application forms (Exhibit A) provided by the City shall be filled
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out completely and additional required decuments shail be attached
when submitted to the City Clerk.
All fees shall be paid with the application. The Clerk will not
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process any application without the payment of all required fees.
Processing of Applications: Schedule. The application will be
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processed on the following schedule.
Properly completed application for tax abatement will be submitted
to the City Clerk. Copies will be forwarded to the Planning &
Economic Development Department and other appropriate
person(s).
Construction site plan submitted (if applicable).
Meeting scheduled with applicant to go over application, missing
items, affirmative action plan, etc.
A public hearing may (if required) 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 (if applicable).
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
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(whichever is applicable)
Muskegon Community College
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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.
h. 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 business owner
and the original application to the appropriate State Agency.
3.4 Establishing Industrial Development Districts & Approving Industrial
Facilities Exemption Certificates
The City Commission will approve the establishment of an Industrial
Development District only after the terms of the abatement are finalized
and the Contract for Tax Abatement is executed. The resolution creating
the Industrial Development 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 Industrial Facilities Exemption shall be approved only
after the creation of the Industrial Development District. The Certificate
shall be approved by resolution of the City Commission to include the
boundaries of the Industrial Development District, the length of the
abatement (length may differ between personal and real property), and any
conditions the City Commission deems appropriate for the issuance of the
Certificate.
Upon expiration of any tax abatement, the Industrial Development District
created for the purpose of granting said abatement shall be immediately
revoked.
Filing and Compliance Monitoring Fee
The filing and monitoring fee shall be paid by the applicant 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 may be
equal to 2% of the abated taxes or $1,766 whichever is less.
_ CITY OF MUSKEGON
INDUSTRIAL TAX EXEMPTION GUIDELINES
The following guidelines are intended to provide direction for determining the
length of all tax abatements as well as other potential components of a tax
abaternent such as employment composition and site/facility requirements. The
City Commission reserves the right to adjust the length of any tax abatement or
add or subtract any conditions placed on a tax abatement based upon other
coramunity benefits including but not limited to capital investment, jobs retained,
wage/salary levels, and facility/site improvements.
A, Duration ofAbatements
The following section represents the number of years to be granted for
projects containing personal property and those containing real property.
If an application contains both real and personal property the resolution
approving the abatement may include separate lengths for both
components.
Standard Exemption:
Real Property 12 Years
Personal Property 6 Years
Employment/Investment Bonus:
5-9 Jobs 1 Year $3 million® 1 Year
10-19 Jobs 2 Years or___ $5 million 2 Years
20+ Jobs 3 Years $8 million 3 Years
Diversification Bonus:
Diversification of Production 9 Years
The standard exemption will apply to all applications. Personal property
abatement extensions may be obtained through exercising the potential
bonuses available to the applicant (only personal property abatement may
be extended through the bonus program). An abatement may receive a
longer term through the creation of additional employment opportunities
(see above).
A nine (9) year personal property exemption (total exemption of nine
years not a nine year extension) may also be obtained if an applicant is
diversifying production. A Diversification Bonus shall only be granted
when a company installs new or modifies existing equipment or
machinery for the purpose of manufacturing new products for an industry
not currently served by the company. (For example, if Company X
produces rocker arms for the automotive industry it cannot receive the
Diversificati on for any property related to the manufacturing of
Bonus
automobile parts. It may receive the bonus for machinery and/or
equipment used for the production of goods for other indusiries such as,
but not limited to, office furniture, aerospace, construction, etc.) A copy
of a customer list and a signed affidavit from the company stating the
intended use of the machinery and equipment listed in the application for
the Diversification Bonus shall be required.
Employment and Diversification Bonuses may not be combined. That is,
if a company receives a Diversification Bonus it cannot receive an
Employment Bonus and vice versa.
B. Site/Facility Requirements
Any site or facility associated with a request for tax abatement shall be
reviewed for conditions that may be determined to be detrimental to the
safety, health and welfare of the community. [f such conditions are
determined to exist at the applicant's facilities/site, the applicant will be
notified by the appropriate City department. Existing facility/site
conditions shall be reviewed against the State of Michigan Certified
Industrial Park industrial development standards.
The City shall utilize the Certified Industrial Park standards because they
are widely accepted throughout the State of Michigan as representing
responsible industrial development as well as providing a pleasant and
desirable location in which to work and/or conduct busingss.
Cc. Employment Requirements
All tax abatement applicants are encouraged to have a labor force
consisting of a representative percentage of minorities and females. All
applicants will be required to submit a workforce breakdown to include
the total number of employees along with the number of minority and
female personnel. If, at the time of application, the company does not
meet the above requirement, the company shall endeavor to create a
workforce that is representative of the community's 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.
_ Adopted this 9" day of May, 2000.
Ayes: Shepherd, Sieradzki, Spataro, Aslakson, Benedict, Nielsen, Schweifler
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By: Mace Q : A andaanae?
4. Lf)
Nays: None
Gail A. Kundinger, City Clark
CERTIFICATION
F ole
This resolution was adopted at a regular meeting of the City Commission, held on May 9,
2000.. The meeting was properly held and noticed pursuant to the Open Meetings Act of
the State of Michigan, Act 267 of the Public Acts of 1976.
CITY OF MUSKEGON
By Daw CO. . Va
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Gail A. Kundinger, City Clerkd
Camm. Action # 90- p7(b)
revised $~ 7-00 # 200-53(d)
CERTIFICATION
2009-49(f)
Attached is a true copy of the revised City of Muskegon Industrial Facilities Tax
Abatement contract adding Section 1.6. This was adopted by the City Commission at a
regular meeting held on June 9, 2009. The meeting was properly held and noticed
pursuant to the Open Meetings Act of the State of Michigan, Act 267 of the Public Acts
of 1976.
Date: June 9, 2009
CITY OF MUSKEGON
933 Terrace, Muskegon, MI 49440
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By > XA. LN SS 2, cL:
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Ann Marie Becker, MMC
City Clerk
CITY OF MUSKEGON
CONTRACT FOR TAX ABATEMENT
Act 198 Public Acts of 1974
AGREEMENT between CITY OF MUSKEGON, a municipal corporation of 933
Terrace Street, Muskegon, Michigan 49441, (“City”) and (“Company”).
Recitals:
A. The Company has applied to City for the establishment of an industrial
development district or industrial rehabilitation district pursuant to the provisions of Act
198 of the Public Acts of 1974, as amended, which act requires a contract between the
City and the Company to be agreed and submitted with the Company’s subsequent
anticipated application for an industrial facilities exemption certificate.
B. That in addition to the statutory requirement, the City has determined that it is in
the best interests of the taxpayers, property owners and residents of the City that this
Agreement be approved and executed prior to the establishment of the requested district,
and the City deems this Contract, together with the conditions set forth in the said Act to
constitute a necessary element in the City’s determination whether or not to create the
district.
Cc. The Company intends to install the project set forth in its application (“project”)
which it believes qualifies for the process of establishing the district and the application
for industrial facilities exemption certificate.
D. The City, provided this Agreement is executed, will determine whether to create
the district based upon the potential for the production of permanent jobs, the
continuation or increase of economic activity, planning and zoning considerations and the
City’s general plan and intentions regarding economic development. In addition to the
City policy considerations and predictions that the Company’s proposed district and
certificate benefit the community in those ways, the City has further determined that the
contractual commitments made by the Company to thereby assist the community shall be
binding on the Company and necessary to continue the tax exemption made possible by
the certificate.
NOW THEREFORE THE PARTIES AGREE:
1. COMPANY AGREEMENT. The Company irrevocably commits to the
investment, job retention and job creation promises made in its application, a copy of
which is attached hereto and incorporated herein. In particular the Company agrees:
1.1 That percent of the promised new jobs shall be in place with
full-time employees on or before , 20 , and
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percent of the said jobs shall be in place with full time employees on or before
,20__ Finally, 100% of the jobs shall be filled and in existence with full-time
employees by a date no later than two (2) years from the date of the granting of
the certificate by the State Tax Commission.
1.2. The Company shall meet the affirmative action goal included in the
application or in any documents supplied by the City and utilized by the
Company, including any additional representations made to the City Commission
on or before the date two (2) years after the granting of the certificate by the State
Tax Commission. It shall maintain the said levels of employment diversity during
the period of the certificate.
1.3. The Company, by the end of two (2) years from the date of the grant of the
certificate by the State Tax Commission shall have completed the investment of
$ in the equipment and improvements as shown in the application.
1.4 That the improvements and equipment to receive the tax abatement treatment
shall be completed on or before the date two (2) years from the date of granting of
the certificate by the State Tax Commission.
1.5 The Company shall pay its specific taxes required by the act in a timely
manner, and shall not delay payments so as to incur any penalties or interest.
1.7. The Company shall fully cooperate with the City representatives in
supplying all requested and required documentation regarding jobs, investment,
the meeting of all goals and the timely installation and utilization of equipment
and improvements. The City shall be entitled to inspect at reasonable hours the
Company’s premises where the said improvements and equipment have been
installed and where the said jobs are performed.
1.8 The Company shall maintain, during the entire period for which the tax
abatement is granted, the level ofjobs, affirmative action goals, production and
utilization of the improvements and equipment at the site where the district has
been created and for which the tax exemption has been granted.
1.9 The Company shall not cause or fail to cure the release of any hazardous
substance, or the violation of any environmental law on its premises in the City.
It shall report any releases to the appropriate governmental authority in a timely
and complete manner, and provide copies of said report documentation to the
City. It shall comply with all orders and actions of any governmental agency
having authority.
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1.10 The Company shall maintain the equipment and improvements so as to
minimize physical or functional obsolescence.
1.11 The Company shall continue to operate its business location in the City,
containing the same number of and type of jobs, for the term of the certificate.
2. AGREEMENT BY THE CITY. Provided this contract has been executed and
further provided all applications to create the district and achieve the industrial facility
exemption certificate have been properly filed, the City shall, in a timely manner,
determine in a public meeting to create the district and receive, process, and approve
thereafter the Company’s application for an industrial facilities exemption certificate.
The City may consider this contract in a meeting separate from and prior to the meeting
in which the City considers the creation of the district and approval of the application for
certificate. Further, the City shall require the submission of this contract signed by the
Company together with its applications, before creating the district.
3. EVENTS OF DEFAULT. The following actions or failures to comply shall be
considered events of default by the Company:
3.1 Failure to meet any of the commitments set forth above.
3.2. The closing of the Company’s facilities in the City. Closing shall mean for
purpose of this Agreement, the removal, without transfer to another site within the
City of substantially all of the production facilities, and the elimination of
substantially all the jobs created or retained thereby, which are set forth in the
Company’s application.
3.3 Failure to afford to the City the documentation and reporting required.
3.4 The failure to create or retain jobs, meet affirmative action goals or expend
the funds on equipment and improvements as represented in the application
within the times required hereby.
3.5 The bankruptcy or insolvency of the Company.
3.6 The failure to pay any and all taxes and assessments levied on the
Company’s property or any other taxes, local, state or federal, including but not
limited to City income taxes and the withholding of said City income taxes from
employees as required by the City Income Tax Ordinance.
3.7. The performance or omission of any act which would lead to revocation
under MCLA 207.565, being §15 of the Act.
3.8 The violation of any provisions, promises, commitments, considerations or
covenants of this Agreement.
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4. REMEDIES ON DEFAULT. In the event of any of the above defaults the City
shall have the following remedies which it may invoke without notice, except as may be
reasonably required by the Company’s rights to due process:
4.1 In the event of closing as determined after investigation of the facts and a
public hearing, the Company shall be immediately liable for penalties to be paid
forthwith to the city as determined as follows:
4.1.1 The Company shall pay to the City for prorata distribution to the
taxing units experiencing the abatement, an amount equal to the difference
between the industrial facilities tax which it has paid, and the total
property taxes to the relevant taxing units which it would have paid, given
its installations of improvements and equipment, during the years for
which the certificate was in effect.
4.1.2 Immediate Revocation. The Company hereby consents to
revocation to the IFT certificate before the State Tax Commission, without
hearing, and the City shall submit a copy of this Agreement to the State
Tax Commission in connection with its revocation procedure, giving
notice that the default has occurred and immediate revocation should
occur.
4.2 In the event the improvements and equipment have not been installed before
the two (2) year period, in addition to the revocation procedures before the State
Tax Commission, the abatement should immediately be reduced by the City
proportionately, and any installations which have not been finished at the end of
said two (2) year period shall not be eligible for the abatement thereafter and shall
be placed on the regular tax roll.
4.3 Failure to Expend the Funds Represented. In the event, (whether or not the
installations have been completed), the Company has not expended the funds it
has represented on its application that it would invest for the installation of
equipment, the abatement shall be reduced prorata, and any remaining value of
equipment shall be placed on the regular tax roll.
4.4 Job Creation and Retention. In the event the promised number of jobs have
not been created or retained at the end of the two (2) years after the grant of the
certificate by the State Tax Commission, the abatement shall be proportionately
reduced.
4.5 Affirmative Action Goals. In the event, after one (1) year from the grant of
the certificate by the State Tax Commission, the affirmative action goals of the
City for additional jobs have not been met on a prorata basis, the abatement shall
be revoked.
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4.6 For other violations of this Agreement or for actions or omissions by the
Company amounting to grounds for revocation by statue, the City shall
recommend to the State Tax Commission immediate revocation of the certificate.
4.7 Special Assessment. For any amount due to be paid to the City, under this
Section 4, the Company consents that the City shall have a personal action against
the Company for the said amount, and in addition, cumulatively, and not by
election, the City shall have a special assessment lien on all the property of the
Company personal and real, located in the City, for the collection of the amounts
due as and in the manner of property taxes and in such case the collection of the
said special assessment shall be accomplished by addition by the City to the
Company’s property tax statement regularly rendered.
5. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Michigan applicable to contracts made and to be
performed within the State of Michigan.
6. Counterparts. This Agreement may be executed in one or more counterparts.
Notwithstanding such execution all such counterparts shall constitute one and the same
Agreement.
7. Benefit. This Agreement shall be binding upon and inure to the benefit of the
respective parties, their successors and personal representatives.
8. Effective Date. This Agreement shall be effective on the date the State of
Michigan Tax Commission grants the company at Industrial Facilities Exemption
Certificate.
CITY OF MUSKEGON
By.
Stephen J Warmington, Mayor
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and NX oO otal? 5
Ann Marie Becker, Clerk
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and
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