VERONICA FARLEY TAX INCENTIVES MANAGER HOUSING AND REVITALIZATION DEPARTMENT Tax Abatements Available to Developers Obsolete Property Rehabilitation Exemption PA 146 of 2000 Neighborhood Enterprise Zone PA 147 of 1992 ID: 918361
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Slide1
City of Detroit
Tax Abatements
VERONICA FARLEY, TAX INCENTIVES MANAGER
HOUSING AND REVITALIZATION DEPARTMENT
Slide2Tax Abatements Available to Developers
Obsolete Property Rehabilitation Exemption (PA 146 of 2000)
Neighborhood Enterprise Zone (PA 147 of 1992)
Industrial Property Tax Exemption (PA 198 of 1974)
Commercial Rehabilitation Exemption (PA 210 of 2005)
Commercial Redevelopment Exemption (PA 255 of 1978)
Slide3Why does the City provide Tax Abatements?
Rehabilitate buildings (we have incredible buildings and houses we love to see them restored)
Increase Tax Revenue (Income Taxes and Personal Property Taxes)
With reactivated or newly activated housing stock or commercial space, you bring in more people who spend more money at local businesses
Get Detroiters jobs in the newly located businesses
Slide4How do Tax Abatements Work
STEPS
TAX ABATEMENT
COUPON
Buy building, apply for abatement
Buys Item and presents coupon
City/DEGC reviews application for financial need, statutory compliance & completion of all reviews and documentation
Consumer spends additional money on other items in store
City doesn’t charge real property taxes on improvements, gets personal property taxes, income taxes and $ spent at local businessesMerchant takes $ off itemConsumer spends additional money on other items in store
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Slide5Considerations made when recommending incentives:
CONSIDERATIONS
Fiscal analysis
Does the project actually needs the incentive to make money?
(
i.e
“but for” analysis)Statutory complianceDoes the project comply with the legal requirements?Income Tax ClearanceDoes applicant have any outstanding City of Detroit or State of Michigan income taxes? Accounts Receivable Tax ClearanceDoes the applicant have any outstanding blight tickets, personal property taxes, fines from the Fire Department, etc.?Affordable HousingFor any housing development, has the applicant agreed to provide affordable housing units (20% of units at 80% of Area Median Income)
Jobs Commitment
Has the applicant committed to creating jobs, and committed to hiring Detroiters for a percentage of said jobs?