TIFs and taxes
|By Neal McNamara|
Will a TIF in two proposed corridor improvement authorities work?
Right now, sitting in the Lansing City Clerk’s office for all who wish to inspect them is a resolution that would establish a Corridor Improvement Authority for a part of Michigan Avenue and another one for a part of Saginaw Street.
If approved, the Saginaw Street authority would stretch, west to east, from Lansing Township to Pennsylvania Avenue. The Michigan Avenue authority would span from the Pere Marquette rail crossing in Lansing to the western edge of downtown East Lansing, crossing three municipalities — Lansing, Lansing Township and East Lansing. The authorities have the ability to include property anywhere up to 500 feet on either side from the centerline of the corridor they occupy.
Bob Trezise, CEO of Lansing’s Economic Development Corp., says that a TIF in an authority is basically the spirit of the tool — to create money to increase development — but its creation is not a given. He says that these authorities would probably be limited in their abilities to use TIF revenue in the beginning.
Because of the 1994 Proposal A, taxable values on properties are determined by the rate of the Consumer Price Index or 5 percent, whichever is less. Since May, the index has been below zero.
Alex Rossean, a consultant with the Anderson Economic Group, said that creating a TIF now might not capture much money, but it would not be useless.
Rising taxable values are “sort of like a freebie built into the system,” Rossean said. “But a TIF can make sense with zero inflation.”
Jessica Yorko, head of the Westside Commercial Association, which is behind the Saginaw authority as part of a long-range plan to revitalize the west side, said that the Saginaw authority is moving toward using a TIF, too. However, the Saginaw authority would only include commercial property.
City Assessor Maria Irish said that her office has not yet studied the feasibility of a TIF along the roads the authorities would encompass. From information she has received, the index is expected to be zero next year. She could not comment on whether creating a TIF during an economic time such as this would be beneficial.
Correction: Due to a reporting error, an earlier version of this story should not have indicated that taxing entities outside of Ingham County had agreed to not opt out of the Michigan Avenue authority TIF.