ENVIRONMENT: Tax plan could boost brownfield cleanups; Traverse City one of 78 cities eligible for funding

LANSING – Plans aimed at increasing the number of brownfield redevelopments are making their way through the Legislature.

The new proposals would expand the type of property eligible for the program and increase the maximum Single Business Tax credit from $1 million to $30 million per project, in hopes of drawing larger developments or “marquee” businesses.

Credits over $1 million would be limited to 15 per year, of which three could be up to $30 million with the remaining 12 capped at $10 million. There would be no limit on claims under $1 million.

Brownfield sites are contaminated industrial properties usually located in urban areas. They are not as attractive to businesses as “greenfields,” the name given to undeveloped land that usually faces fewer environmental obstacles to development.

“This is going to be a positive step for the Traverse City area and the entire state by adding another great economic development tool,” said Mark Chilcott, business manager and brownfield development specialist with EC&S, an environmental consulting firm in Traverse City.

Chilcott said Traverse City has seen many brownfield redevelopments already and these bills would improve on that.

Rep. Randy Richardville, R-Monroe, who sponsored one of the proposals, said it will attract new jobs to urban areas while preserving green space. “Redeveloping core urban sites remains our best chance at curbing urban sprawl and safeguarding green space.”

Gov. John Engler is a strong supporter of the legislation, claiming it will bring new jobs and high-tech firms to the state.

“As a result of this package, Michigan will be at the forefront in redeveloping contaminated, blighted and obsolete property, creating countless job in our urban areas,” he said.

Chilcott said a larger tax credit will change the playing field and draw the attention of much larger businesses.

Other key elements of the proposals include extending the availability of credits through the year 2003. They are now only authorized through 2000. It would also allow the credit to be transferred from a property owner to a lessee under certain circumstances.

Currently, property must be located in a brownfield redevelopment zone, but the proposals would change that by allowing “qualified local government units” to exercise authority over eligible property. Traverse City is among the 78 qualified municipalities.

Opposition to the bills has arisen because some cities did not make the list. Opponents have argued for a clear definition of eligible sites.

The state treasurer has calculated that the credits would cost $23 million in lost tax revenue in 2001 and $50 million in 2002.

The package has unanimously passed the House and now goes to the Senate.

Daniel DeCapua is a correspondent with Capital News Service. BIZNEWS