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County committee approves city agreement
A trio of projects proposed for properties in the Grand Rapids Renaissance Zone took a big step toward reality Tuesday morning when the Kent County Finance Committee unanimously recommended that the Board of Commissioners authorize an agreement with the city that would help extend the nearly tax-free status of those parcels for 12 more years.
“A month ago it didn’t look like this was going to happen. It’s good to see,” said County Commissioner Dick Bulkowski, who represents the west side of the city.
The agreement requires the city’s Economic Development Corp. to reimburse the county for any property-tax and millage revenue it loses to the projects. Reimbursements would be made on an annual basis, but the county won’t know the actual amount being reimbursed until April of the following tax year.
“The amount of the reimbursement depends on the improvements made to the properties,” said County Fiscal Services Director Robert White. “These are in the Renaissance Zone and you’re not collecting any revenue now.”
The sites on which True North Architecture, Construction and Investment, Via Design and Wealthy Street Historical Developments LLC want build have been in the zone since 1997. But the tax benefits for those properties expire at the end of 2011. Should the city and the state grant extensions to the developers, the properties will be nearly free of all state and local taxes until the end of 2023.
Without the agreement, members of the Finance Committee would likely have voted no on extending the zone status because the city is exempting and abating more than 12 percent of its total tax roll this year. A county policy, created in May 2007, requires commissioners not to participate in tax-capturing development plans when a local jurisdiction exempts and abates more than 10 percent of its tax roll.
The city has said it will fall below the county’s threshold in two years. If the city does that and stays below that limit for the duration of the extensions, the county will lose tax revenue to the projects for 10 years.
A state law passed last April gives counties the right to veto a zone extension.
City commissioners still have to approve the extensions. The state has to do the same.
County commissioners will vote on the agreement with the city Thursday.
“This is the third agreement we’ve entered into since the board adopted the policy,” said Daryl Delabbio, county administrator and controller. “It shows that the policy the board put together is a good one.”