State OK's Third Coast GR Project
LANSING — The state approved a brownfield tax credit request last week from Third Coast Development Partners LLC for a new 22,000-square-foot building that will go up at 1697 Michigan St. NE, the former site of Bishop’s Furniture.
But the amount the state approved is quite a bit less than the City Commission and the city’s Brownfield Redevelopment Authority gave the firm, which is owned by Dave Levitt and Brad Rosely.
The Michigan Economic Development Corp. awarded the project last week a capture of $207,277 in tax-increment financing. But city commissioners ratified the Third Coast request earlier this month for a brownfield tax reimbursement worth $380,545 for demolition, site preparation, lead and asbestos removal and other infrastructure work.
Levitt told the Business Journal that the MEDC nixed the underground water retention system they planned for the site as an allowable expense, one the state no longer views as an eligible activity. Nor did the state credit Third Coast for its cost to excavate the site.
Those two items were approved locally, and pulling both from the work plan at the state level accounted for most of the $173,268 difference in the city and state tax reimbursement awards.
But Levitt said the firm will be able to capture its reimbursement sooner. The state award shortened the reimbursement period from nine to five years. So although Third Coast isn’t getting as large of a tax payback as it hoped for, the company will get the dollars faster.
“So from a present-value prospective, it didn’t hurt us as badly as it sounds,” he said.
Commissioners and the brownfield board also gave Third Coast a Michigan Business Tax credit worth $344,425 for the project. Levitt, though, said the MEDC didn’t act on the credit last week because of changes made to the MBT. Those changes may have created confusion about the credits, and Third Coast is expecting $144,425 less than the city okayed.
“They said they will give us a mini-credit, which I think has a maximum of $200,000 to it,” he said.
Third Coast plans to invest $3.4 million into the project and has leased the building to Spectrum Health, which will operate a child care and child development center there for its employees. Spectrum Health will bring 15 new jobs into the city at the center. Demolition of the furniture building began last week.
“We appreciate the support they’ve given us,” said Levitt of the state’s action. “It’s clearly not exactly what we asked for, but it’s way better than them saying no.”