March 18 2013 12:00 AM

Council tables tax breaks for the Knapp’s project due to lack of votes

Tuesday, March 15 — The Lansing City Council delayed a vote Monday on abating nearly all state and local taxes for the proposed redevelopment of the Knapp’s building because of a lack of support, Councilman Brian Jeffries said.

“I didn’t have the votes to pass it,” said Jeffries, who chairs the development and planning committee.

The approval requires five Council votes. Two members, Derrick Quinney and Tina Houghton, were absent. Jeffries would not comment on whether two more members, Eric Hewitt and Carol Wood, opposed it.

The Eyde Co., which owns the iconic downtown building at 300 S. Washington Square, submitted an application to consider the property a Renaissance Zone, which would abate most local and state taxes for up to 15 years.

The tax breaks are phased out in the final three years of the agreement and property owners are still responsible for property taxes levied for local bonds, school sinking funds and special assessments. However, they are exempt from local real and personal property taxes, school property taxes, local corporate income taxes, state personal income taxes and local income taxes.

The Council did vote unanimously to assign a five-member Historic District Study Committee to find out whether the Knapp’s property is eligible for historic district tax credits. Those include up to 25 percent state and federal tax breaks on costs to building improvements. The committee has six months to make a recommendation to the Council.

In other business, the Council approved tax breaks for a health insurance research firm interested in expanding into the city.

The Council on a 5-1 vote approved a 12-year, personal property tax incentive for MedAssurant at 3301 E. Michigan Ave. MedAssurant has offices and nearly 50 employees near Jolly and Dunckel roads in Delhi Township. MedAssurant wants to expand to about 400 employees and eventually move its Lansing-area operation into the city. That could take up to two years, MedAssurant spokesman Rick Lash said.

MedAssurant is headquartered in Maryland. It’s looking to spend about $4 million in improvements to the building near Frandor Shopping Center, but only about $1.5 million of those improvements would be eligible for tax breaks.

Jeffries said after the city “invests” $114,000 by abating the personal property taxes, it will see a $1.4 million return on that investment in income taxes over that 12-year period.

“It’s a good deal for the city,” he said.

However, Hewitt — who was the only no-vote — said the city shouldn’t be giving tax breaks to businesses while asking city residents for a millage increase. The planned expansion is in Hewitt’s ward.

“If we continue to ask residents to give up part of their income with property tax increases, I don’t see why businesses can’t write it (costs to move) off,” Hewitt said.

In other business, the Council appointed two members to the Saginaw Street Corridor Improvement Authority Monday. Bob Ford, 809 Center St., will serve an at-large term that expires June 30, 2012. Chris Strugar-Fritsch, who is listed at 7230 Physical Plant Department, P.O. Box 40010, will serve an at-large term expiring at the same time as Ford’s.

The Council also appointed Lori Adams Simon to the Board of Ethics for a Third Ward term to expire June 30, 2015.

In other news, the Council scheduled two show cause hearings for its March 28 meeting on two houses that could go on the city’s make safe or demolish list. The first property, 617 Bluff St. between Pine and Sycamore streets, was “involved with a fire,” Wood said. She added that no permits have been pulled to improve the structure, which is estimated to cost nearly $59,000.

Wood said no permits have been pulled to fix 1542 High St., either, which has a deteriorating roof due to weather damage. The estimated cost of repairs is more than $71,000, Wood said.

In other news, the Council recognized Norm Gear, principal of Gardner Middle School, on being named the 2011 Michigan Association of Secondary Schools Principal of the Year Award. Gear was recognized for helping land a $350,000 grant for staff development and for starting an in-school suspension program that “helped to create and maintain a positive learning and teaching environment.”