View Single Post
Old
12-05-2012, 12:16 PM
  #44
Fugu
Administrator
HFBoards
 
Fugu's Avatar
 
Join Date: Nov 2005
Location: Pac NW
Posts: 30,314
vCash: 500
Let's look at the nuts and bolts of the proposal:

http://www.mlive.com/business/detroi...plans_new.html

Quote:
The proposed mixed-use development would be funded by a mix of private investment and existing money collected by the city’s DDA. No new taxes would be needed to build the development, but the state would need to pass House Bill 5463 to allow the DDA to continue to get money for these kinds of developments.


A Senate committee unanimously approved a bill supporting the arena on Tuesday. It's likely to come up for a vote before the full Senate on Wednesday.
...
“This plan makes good business sense for two reasons,” George W. Jackson, Jr., president and CEO of Detroit Economic Growth Corporation, said in the release. “First, it’s not a plan for an isolated, single-use structure. Instead, it builds on the clear successes we’ve already had downtown integrating districts that feature entertainment, and support commercial, retail and residential development around them. Second, it doesn’t impose any new tax burdens; it simply continues a program for retiring debt related to economic development. It’s hard to argue with that.”
http://www.freep.com/article/2012120...nment-district

Quote:
Legislation introduced in Lansing would create a new “catalyst development project” that could benefit from support from the Michigan Strategic Fund and also from the use of Downtown Development Authority tax revenues that support projects in the central business district.

The proposed legislation defines “catalyst development project” as one that is designated by the local Downtown Development Authority, which results in at least $300 million in capital investment, and that takes place in a city with a population of at least 600,000 – in other words, in Detroit. The city may designate only one such project, under the legislation.
Would be nice to know how much is being privately invested. The next paragraph makes it sound like the only public money needed would be as security on the construction bonds-- so maybe ultimately not used?

Quote:
It allows a downtown development authority in a city with a population greater than 600,000 to capture taxes, including school taxes, to help finance certain development projects. For a “catalyst development,” such as the Ilitch proposal, the captured taxes could be used as security for construction bonds. The bill also provides for exemptions from property taxes and transfer taxes.

A Senate Fiscal Agency analysis said the bill “would reduce both state School Aid Fund revenue and local tax revenue by an unknown amount.”
Really? Maybe it's something they should figure out (the amount). It's not like Detroit schools are swimming in money.



Moving on, the Detroit News has a few more figures, which don't sound very bad at all:
http://www.detroitnews.com/article/2...text|FRONTPAGE
Quote:
Olympia rolled out the redevelopment proposal Tuesday in a presentation to state lawmakers, who are being asked to repurpose up to $12.8 million in Detroit Downtown Development Authority funds for the project. A Senate committee held a hearing Tuesday on an amended House Bill 5463 that would allow Olympia Development to apply for DDA funds, said Rep. John Walsh, R-Livonia.
"It's not a tax increase. It's a repurposing of existing revenue," Walsh told The Detroit News.
....

H.B. 5463, sponsored by Walsh, began as a bill to exempt downtown development authorities from paying property taxes, giving them the same tax break afforded to economic development corporations. Walsh said he was approached during the summer by the Ilitch organization, Detroit officials and Gov. Rick Snyder's office about expanding the scope of the legislation to include the proposed arena and mixed-use development.
Thus the exemption on paying property taxes on a currently unknown amount of land would result in the potential loss of revenue for school funding and whatever else is funded via property taxation. Of course, for the future, an exemption on property taxes on the value of whatever is built on this land is probably the greater potential loss, although without a tax break it might never get built. Damned if you do, and damned if you don't. Anyway, would be nice if someone dug up some numbers. It does sound like the construction itself would be privately funded though.


Fugu is offline   Reply With Quote