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| Resolution | NO. 248 |
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| | | | | | | | | A Resolution granting an extension of the development period for Obsolete Property Rehabilitation Certificate No. 3-13-0020 as requested by 25 Michigan Holdings, LLC. | | | |
| | | | | | | | | BATTLE CREEK, MICHIGAN - 10/4/2016 | | | |
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Resolved by the Commission of the City of Battle Creek:
The City Commission understands the need to use tax incentives to encourage investment and job growth in the community. Public Act 146 of 2000, as amended, gives the Commission a tool it can use to provide incentives to create employment, increase Commercial activity, revitalize urban areas, eliminate blight and increase its tax base.
On October 1, 2013, the City Commission approved an Obsolete Property Rehabilitation Exemption Certificate (OPRA) for 25 Michigan Holdings, LLC. The State Tax Commission subsequently granted the exemption on December 16, 2013, and issued Certificate No. 3-13-0020; and
on September 27, 2016, 25 Michigan Holdings, LLC, sent a letter requesting an 18-month extension of time to complete the project covered under Certificate No. 3-13-0020.
Therefore, 25 Michigan Holdings, LLC, asks the City Commission to approve its request to extend the project completion date from June 30, 2016, to December 31, 2017.
To support the efforts of 25 Michigan Holdings, LLC, to invest in its local retail/apartment facility renovation, the City Commission now approves an extension of the development period to December 31, 2017, for Certificate No. 3-13-0020 with no change in the ending date of the certificate.
I, Victoria Houser, City Clerk of the City of Battle Creek, hereby certify the above and foregoing is a true and correct copy of a Resolution adopted by the Battle Creek City Commission at a Regular meeting held on October 4, 2016.
Victoria Houser
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| | | | | | | | | Battle Creek City Commission
10/4/2016
Action Summary | | | |
| | | | | | | | | | Staff Member: | Steven M. Hudson | | Department: | Assessing |
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| | | | | | | | | SUMMARYÂ
| A Resolution granting an extension of the development period for Obsolete Property Rehabilitation Certificate No. 3-13-0020 as requested by 25 Michigan Holdings, LLC.
| BUDGETARY CONSIDERATIONS
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| CITY OF BATTLE CREEK |
| OBSOLETE PROPERTY REHABILITATION TAX EXEMPTION |
| TAX ABATEMENT ANALYSIS-BUILDING ONLY - REVISED 9/28/16 |
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| APPLICANT: |
25 Michigan Holdings, LLC |
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| LOCATION: |
25 West Michigan Avenue |
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| ESTIMATED COST OF REAL PROPERTY IMPROVEMENTS: |
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$17,650,000 |
| ESTIMATED COST OF PERSONAL PROPERTY IMPROVEMENTS: |
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$0 |
| TOTAL ESTIMATED PROJECT COST: |
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$17,650,000 |
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| ESTIMATED NUMBER OF NEW FULL TIME JOBS CREATED: |
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20 |
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Begins |
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Ends |
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| Improvements |
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11/30/2013 |
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12/30/2017 |
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| ESTIMATED TAXES OVER LIFE OF CERTIFICATE |
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A |
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C |
A-(B+C) |
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Bldg. Taxable |
OPRA Taxable Values |
Bldg Taxes |
OPRA Taxes |
Taxes |
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| Year |
without OPRA* |
Frozen |
Rehab* |
w/o OPRA |
Frozen |
Rehab |
Abated |
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| 2017 |
$718,500 |
$346,262 |
$372,229 |
$45,775 |
$22,060 |
$8,933 |
$14,782 |
1st Year Abatement |
| 2018 |
$5,199,670 |
$346,262 |
$4,466,800 |
$331,268 |
$22,060 |
$107,203 |
$202,005 |
2nd Year Abatement |
| 2019 |
$6,048,074 |
$346,262 |
$5,583,440 |
$385,320 |
$22,060 |
$134,003 |
$229,257 |
3rd Year Abatement |
| 2020 |
$6,169,036 |
$346,262 |
$5,583,440 |
$393,026 |
$22,060 |
$134,003 |
$236,963 |
4th Year Abatement |
| 2021 |
$6,292,417 |
$346,262 |
$5,583,440 |
$400,887 |
$22,060 |
$134,003 |
$244,824 |
5th Year Abatement |
| 2022 |
$6,418,265 |
$346,262 |
$5,583,440 |
$408,905 |
$22,060 |
$134,003 |
$252,842 |
6th Year Abatement |
| 2023 |
$6,546,630 |
$346,262 |
$5,583,440 |
$417,083 |
$22,060 |
$134,003 |
$261,020 |
7th Year Abatement |
| 2024 |
$6,677,563 |
$346,262 |
$5,583,440 |
$425,424 |
$22,060 |
$134,003 |
$269,361 |
8th Year Abatement |
| 2025 |
$6,811,114 |
$346,262 |
$5,583,440 |
$433,933 |
$22,060 |
$134,003 |
$277,870 |
9th Year Abatement |
| 2026 |
$6,947,336 |
$346,262 |
$5,583,440 |
$442,612 |
$22,060 |
$134,003 |
$286,549 |
10th Year Abatement |
| 2027 |
$7,086,283 |
$346,262 |
$5,583,440 |
$451,464 |
$22,060 |
$134,003 |
$295,401 |
11th Year Abatement |
| TOTALS |
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$4,135,697 |
$242,660 |
$1,322,160 |
$2,570,877 |
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| Total Taxes without abatement (4 YEARS): |
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$1,155,389 |
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| Total Taxes with abatement (4 YEARS): |
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$472,382 |
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| Estimated taxes to be abated for total of 4 YEARS: |
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$683,007 |
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| Total Taxes without abatement (8 YEARS): |
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$2,807,688 |
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| Total Taxes with abatement (8 YEARS): |
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$1,096,632 |
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| Estimated taxes to be abated for total of 8 YEARS: |
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$1,711,056 |
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| Total Taxes without abatement (12 YEARS): |
$4,135,697 |
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| Total Taxes with abatement (12 YEARS): |
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$1,564,820 |
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| Estimated taxes to be abated for remaining 11 YEARS: |
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$2,570,877 |
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| NOTE: Frozen value based on the 2013 taxable value. |
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| *Real taxable values indexed each year by average CPI of 1.02 |
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Submitted by: |
Steven Hudson, MMAO 4 |
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| Full Millage |
63.70960 |
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City Assessor |
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| OPRA Rehab Millage |
24.00000 |
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| ANALYSIS IS FOR ILLUSTRATIVE PURPOSES ONLY |
| ACTUAL AMOUNT AND DURATION OF INCENTIVE SUBJECT TO CITY COMMISSION APPROVAL |
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HISTORY, BACKGROUND and DISCUSSION
| This resolution approves an extension of the development period for 25 Michigan Holdings LLC's Obsolete Property Rehabilitation Exemption Certificate (OPRA) Certificate No. 3-13-0020. Per Commission Guidelines for a 12-year Obsolete Property Rehabilitation Exemption, the certificate holder must invest a minimum of $500,000 and shall create no fewer than 18 full-time new jobs within 30 months of project approval. According to their abatement information update, as of August 2, 2016, the certificate holder has invested $325,000 and created one (1) job.
25 Michigan Holdings LLC has submitted a request for an extension of the development period for its Obsolete Property Rehabilitation Exemption Certificate (OPRA) Certificate No. 3-13-0020. The project is not complete because the due diligence and financing of the project has taken significantly longer than anticipated due to the complexities and costs of the project. According to the original OPRA application, the company expects to create 20 new jobs and invest $17,650,000 in building renovations, as a result of this project.
25 Michigan Holdings LLC now asks for an extension until December 31, 2017.
The Commission may do one of the following:
1. Approve the request with no change in the ending date of the certificate as issued.
2. Deny the request. A separate resolution would be required to revoke the abatement.
This is the first request received for an extension period for an OPRA application. In the past, the City Commission granted similar requests for IFT certificates with no change in the ending date of the certificate.
| DISCUSSION OF THE ISSUE
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| POSITIONS
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