County moves toward Ren Zone extensions
Members of the Kent County Finance Committee unanimously agreed to amend the county’s economic development participation policy this morning, and that change would allow county commissioners to consent to three requests for time extensions for a trio of proposed projects in the city of Grand Rapids’ existing Renaissance Zone.
But the city hadn’t formally asked the county to agree to let the extensions go forward as of this morning’s meeting, so the committee couldn’t actually act on the three requests. Nor did it appear that a city representative was at the meeting, even though the policy change was on the agenda.
“We’ve not received anything from the city of Grand Rapids and time is running out,” said County Vice Chairman Richard Vander Molen.
The extension requests have to be in Lansing next month to be approved for next year. State law, Public Act 116 of 2008, requires that a county consent to an extension before an application can be submitted. If county commissioners don’t act on the requests, the extensions are automatically denied.
“We were promised something two weeks ago. We were promised something last week,” said Robert White, county fiscal services director, of the city.
City officials asked the county to amend the policy weeks ago so county commissioners could allow the extensions to be granted without having board members violate the policy they approved in May 2007. The policy prohibits county commissioners from ratifying any proposal that would cost the county property-tax revenue if a city or a township exempts and captures more than 10 percent of its annual tax roll. Grand Rapids currently stands at 12.3 percent.
The amendment the committee approved would let commissioners give their OK to the extensions as long as an agreement was in place that guaranteed a reimbursement of the county’s lost tax revenue until the city fell below the 10-percent threshold.
“It’s a policy, not a statute,” said White.
City Manager Kurt Kimball said the city would drop under that figure in 2011, so the county would expect that its property-tax revenue be reimbursed for 2009 and 2010, if the zone extensions start next year.
True North Architecture, Construction and Investments, Via Design and Wealthy Street Historical Development LLC have proposed projects on three different zoned parcels in the city. All three, though, have indicated that if the time durations aren’t extended, the projects probably won’t go forward. The nearly tax-free time on those properties expires at the end of 2011.
“We do want to see economic development continue in the city of Grand Rapids,” said County Commissioner Harold Mast.
Mast added that the amendment doesn’t only apply to zone requests but to all proposals that involve county tax revenue.
County Administrator and Controller Daryl Delabbio said he expects the full board of county commissioners to weigh-in on the policy change this Thursday, the same day they get their first look at the 2009 general fund budget.
White told committee members that he had to lower the expected interest income for the general fund for the coming year from $3.6 million to $2.8 million because the interest rate on U.S. Treasury bonds and notes recently feel from 2 percent to 1.5 percent due to the crisis in the financial markets, meaning the county will likely have to dig into the fund’s reserve again. The balance in that account was at $13.6 million in 2007, but it’s projected to be at $10.4 million by the end of next year.
“I can’t think of anything that will improve the general fund at this point,” said White.
The general fund, which pays for most of the services the county provides, has been projected to have a $40,000 budget deficit next year.