Holland Eyes Creation Of Brownfield Area

June 5, 2002
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HOLLAND — The city of Holland could become the latest community to jump into a state program that provides tax incentives for developers who invest in urban areas.

The city and the Holland Economic Development Corporation (HEDCOR) are preparing plans for the formation of a “brownfield district” that would cover an older, former industrial area north of downtown Holland, as well as other neighborhoods in town.

After seeing more than $110 million in mostly private investments made in the downtown business district over the last 12 years, the city’s goal is to secure “one more tool” to encourage new investment, City Manager Soren Wolff said. The area between the main shopping district and Lake Macatawa holds plenty of potential, Wolff said.

“We believe we have a pretty good foundation in the downtown to build upon,” he said. “Now we see some opportunity to the north. That’s where you’re going to see the majority of growth for our downtown in the next 10 years.”

Ideas for redeveloping buildings and parcels north of downtown have come and gone over the years, Wolff said. A brownfield designation, and the potential tax savings a developer can receive, may provide enough incentive for somebody to proceed with a project considered marginally viable, he said.

“We know there are some buildings being looked at all the time,” Wolff said. “It may be just enough for someone to say, ‘this is worth it.’”

Created in 1996, Michigan’s brownfield program was originally set up to provide tax incentives and liability protections for developers who took over and redeveloped contaminated industrial and commercial properties. Credits in the state’s single business tax can range upwards of $30 million, or 10 percent of the eligible investment.

The state Legislature last year extended the brownfield law through 2005, increased the maximum allowable tax credit to $30 million on eligible investments as a way to encourage major redevelopment projects, and included parcels and buildings whose uses are deemed blighted or functionally obsolete.

The changes in the law that added blighted areas and obsolete buildings to the fold made the brownfield program an option for Holland to consider in promoting economic development, HEDCOR President Chris Byrnes said.

“It presents us with some different tools we haven’t used before,” Byrnes said. “If we can use some incentive programs to help projects that otherwise wouldn’t have happened, that’s what it’s there for.”

If formed, Holland’s brownfield redevelopment district would become the second in Ottawa County. Grand Haven has formed a district on the north end of town to spur redevelopment of an older neighborhood along the Grand River.

Wolff hopes to have a proposal ready for the Holland City Council to consider in April. City staff is presently examining other neighborhoods in Holland for potential inclusion within the brownfield district.

The state Department of Treasury last year approved tax credits totaling nearly $3.5 million for five projects with combined investments of $36.1 million. The Michigan Economic Growth Authority has approved millions more in additional tax credits for major projects, the most recent of which was a $30 million tax credit over 10 years issued in December for Delphi Automotive to renovate a factory in the Saginaw area.

The brownfield program is fast becoming a popular economic development tool that helps draw investment into older urban areas, said Kathleen McMahon, a spokeswoman for the Michigan Economic Development Corporation.

“We’re going to see it do nothing but go up,” McMahon said.

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