July 13 2010 12:00 AM

Council clears way for tax incentives for new MSUFCU branch downtown

Does a big bank need tax incentives to locate in downtown Lansing? Most members of the City Council think it does.

Lansing City Council approved Monday night three tax incentives worth $297,000 over 12 years for Michigan State University Federal Credit Union to remodel the old Dimitri’s Restaurant, 104 and 106 S. Washington Square. The three-story structure will house the credit union on the first floor and various offices on the second. Plans for the third floor are still up in the air.

Two of the incentives fall under the Obsolete Property Rehabilitation Act for rehabbing blighted properties. The third is a personal property tax exemption for the $500,000 worth of new equipment MSUFCU will install.

The measure passed 6-1. First Ward Councilman Eric Hewitt was the only one to object to the tax incentives (Council Vice President Kathie Dunbar was absent), arguing that a bank is neither an underrepresented business nor struggles to receive financing for development. Those are two criteria by the state Economic Development Corp. when considering tax breaks for businesses.

“I have a hard time giving a bank a tax abatement – I am sure they can finance themselves,” Hewitt said.

He added that when the state pays for these tax incentives, it really means taxpayers. “The taxpayers of Michigan will be funding these taxes for schools instead of this business.”

At-Large Councilman Brian Jeffries recommended the Council approve these tax breaks because they will bring an estimated 15 to 20 jobs downtown, future taxes will go to the state Tax Increment Finance Authority fund for schools and that this would not be the first time the city has given tax breaks to a bank. He responded to Hewitt that without MSUFCU’s $3 million renovation, the property would be vacant.

“We have done incentives for other banks in town. This will bring more employment and income taxes to the city,” Jeffries said.

In other business, a July 26 public hearing was set to discuss giving General Motors Co. personal property tax incentives should it decide to bring its $190 million expansion to Lansing. Council President A’Lynne Robinson said this shows GM that Lansing is willing to give it tax breaks should GM decide to expand here. The project is estimated to create upwards of 600 jobs. An informal hearing was also set for July 19 to discuss tax breaks for GM.

Joel Christie, property owner of 1125 W. Mount Hope Ave., pleaded with Council for an extension beyond 60 days to bring his property up to code compliance. The house, which at one point was roof-less, has been gutted and is being updated to code standards. At-Large Councilwoman Carol Wood said Christie has had plenty of time to rehab the property.

“He didn’t make timelines he was supposed to. If he can get to code compliance within 60 days, he will be fine,” Wood said.

The make safe or demolish resolution passed 5-2, with At-Large Councilman Derrick Quinney and Second Ward Councilwoman Tina Houghton dissenting. Christie said he has already made $18,000 in home improvements.

“He has done an extensive amount of work so far. I don’t see why we should demolish it,” Quinney said.

“I bought this house to achieve the American dream, which turned out to be a pain in the ass,” said Christie, who pointed out to Council that he is a medical cannabis caregiver and is growing plants in the basement. He claims Council is being discriminatory by giving him 60 days.

Council also unanimously approved two amendments to the employees’ retirement system ordinance. One will provide for a quorum of four trustees on the retirement board of trustees when there are two or more trustee openings, while the other requires trustees to be Michigan residents and changes the title of “chief personnel and training officer” trustee to “human resources director.” Both measures go into effect immediately.

Council approved a worker’s compensation claim worth $31,000 for a city employee who worked as a mechanic lifting 90-pound batteries, Wood said. He was left permanently disabled after popping his left arm out of socket while moving a battery.

An Aug. 23 public hearing was set to discuss the renaming of Main Street to Malcolm X Street. Council also unanimously approved an application by Meridian Entertainment Group to put on a fireworks show on the closing evening of Common Ground.