$100M available for Michigan businesses, developments in place of brownfields, historic tax credits

The Michigan Economic Development Corporation (MEDC) has $100M it wants to give out in fiscal year 2012 to Michigan businesses that are creating jobs and to development projects that aim to revitalize urban areas through reuse of vacant or historic buildings or creation of sustainable and mixed-use developments.

Under the purview of the Michigan Strategic Fund board, two new programs will replace Michigan Economic Growth Authority (MEGA), brownfield and historic tax credit programs, all part of the former Michigan Business Tax that will be eliminated.

The Michigan Business Development Program and the Michigan Community Revitalization Program will each provide up to $10M per approved project via grants, loans and other economic assistance.

The Michigan Business Development Program will consider projects that create jobs and new investment in the state.

The Michigan Community Revitalization Program will work with developers and property owners to revitalize regional urban areas through reuse of vacant or obsolete buildings, historic buildings and sustainable and mixed-use developments.

Both programs begin October 1, 2011, the start of the fiscal year.

"Before, incentives were tax credit based, so when the projected milestones were met [the business or developer] would file for the tax credit with the department of treasury," says MEDC Director of Policy Peter Anastor. "In the new model, when milestones are met they will get a cash check from us instead."

Anastor expects the state to give out the full $100M in 2012, money appropriated from the State of Michigan General Fund ($75M) and from The 21st Century Jobs Fund ($25M). He says the amount appropriated each year could fluctuate.

Each program requires a staff, financial or economic commitment from the local municipality.

"We've built in greater flexibility than in past programs that were structured in the tax credit model, and can really focus on what the business or developer needs for development of their project," Anastor says. "You hear that Michigan is eliminating tax credits and is not open for business, and that's not true. We want to be sure people understand the money is available."

Source: Peter Anastor, Director of Policy, Michigan Economic Development Corporation
Writer: Deborah Johnson Wood, Development News Editor