Saginaw city leaders have taken the first step toward approving a series of tax incentives for groups renovating and developing a handful of commercial properties in Saginaw’s downtown and Old Town districts.
City Council voted unanimously Monday, Aug. 11, in favor of approving Obsolete Property Rehabilitation Act districts for properties along Michigan and Court streets in Old Town and on North Washington in downtown Saginaw.
The program essentially freezes the value of a property at its current level and keeps it there for up to a 12-year period. That means, for that time period, the owners will not pay the higher taxes that result as the property value increases after renovations.
Tom Miller Jr. is vice president of urban development and special initiatives for Saginaw Future, the city’s economic development arm. Miller explained to City Council Monday why approving the OPRA districts will encourage developers to invest in the community and result in a net financial gain for city government.
“Obsolete Property Rehabilitation Act districts, or OPRAs, provide a tax incentive to encourage the redevelopment of buildings that are contaminated, blighted or functionally obsolete,” Miller said. “The goal is to rehabilitate older buildings into viable commercial and mixed-use projects.”
The added benefit to Saginaw is that, with the city’s hard dollar cap on property tax receipts, placing properties onto a separate tax roll like the one created with an OPRA district actually results in more dollars in the city’s coffers.
“Because of the tax cap, granting any OPRA certificate removes the property from the ad valorem roll and creates a new revenue stream for the city of Saginaw,” Miller said.
The big idea behind the tax incentives, Miller said, is to encourage the rehabilitation of older buildings that otherwise might need to be demolished as they deteriorate.
One of the projects under consideration for OPRAs seeks to renovate a trio of historic buildings on the northeast corner of the Court/Michigan intersection in Old Town Saginaw. The other will involve the development of the Johnson Building at 110 and 112 N. Washington downtown, the former location of the French Quarters restaurant and the future home of Rita’s Southern Soul Cafe.
Miller explained that City Council’s action Monday is only the first step in the process to grant the tax incentive.
“This is a two-step process,” he said.
Miller explained that the first step is for City Council to create the OPRA district. Then, he said, the property owner will return to a future meeting to ask city leaders to approve an OPRA certificate for their property.
“If approved, the OPRA certificate would freeze the property tax for up to 12 years on every property that you’re considering,” he said.
Source: Mlive.com