On November 29, 2001 the Oakland County Board of Commissioners approved the creation of the Oakland County Brownfield Redevelopment Authority (OCBRA), and in doing so established the initial OCBRA Board and the Bylaws in which all aspects of the OCBRA will follow. The OCBRA meets on a regular basis to continue its work on a number of Brownfield redevelopments under consideration.
Under state law, a Brownfield Redevelopment Authority is the way to access the following financing incentives.
Michigan Business Tax (MBT) Credit:
A Michigan Business Tax (MBT) credit is available for up to 12.5% of the eligible investment hard costs made on an eligible property by a qualified taxpayer. For projects designated as Urban Development Area Projects (UDAP), a credit of up to 20% of eligible investment hard costs is available until 12/31/10, then 15% thereafter. Projects are categorized as follows based on the amount of the eligible investment:
1) Large: investment over $10 million (up to 20 can be approved annually) 2) Small: investment of more than $2 million but not more than $10 million 3) Mini: investment of $2 million or less
One Jumbo credit with investment of more than $10 million but not more than $30 million can be approved annually.
Eligible property for the MBT credit includes:
1) Property in a qualified local governmental unit** (QLGU) that is a facility, blighted or functionally obsolete, including adjacent or contiguous parcels.
2) Property not in a QLGU that is a facility, including adjacent or contiguous parcels.
3) Tax reverted property owned or under the control of a land bank fast track authority.
UDAP include projects on eligible property located in a downtown or traditional central business district of a QLGU or county seat, or along a traditional commercial corridor of a QLGU or a county seat, as determined by the Michigan Economic Growth Authority. These are projects with the following characteristics: multi-story which increase density, mixed-use and walkable communities, sustainable and green redevelopment, addresses area wide redevelopment with multiple parcel redevelopment and underserved markets of commerce.
Following approval of the property in a brownfield plan a MBT Credit Application (Part I) is submitted to the Michigan Economic Development Corporation (MEDC). If the project has merit, an invitation to submit a complete application (Parts I and II) is given. If approved, a pre-approval letter is issued. Eligible investment can be made prior to the issuance of a pre-approval letter as long as the investment is made after brownfield plan approval and no earlier than 90 days prior to the pre-approval letter date. The MBT credit may not be claimed until issuance of a certification of completion for the project.
A qualified taxpayer (property owner, lessee, or party entered into an agreement to purchase or lease eligible property) may claim a credit for the following eligible investment hard costs on eligible property: site improvements, demolition, construction, restoration, alteration, building renovation or improvement, and addition of machinery, equipment, and fixtures.
Tax increment financing (TIF) must be pursued for all eligible activities. (See below for more details on TIF.)
Tax Increment Financing (TIF):
Capture of increased local and school property tax revenues on eligible property by a brownfield redevelopment authority to pay for the costs of the following eligible activities:
1) Environmental response, demolition, and lead or asbestos abatement statewide, plus
2) Infrastructure improvements and site preparation in qualified local governmental units.
Tax increment revenues are generated by investment in, and redevelopment of, eligible property which includes contaminated, blighted or functionally obsolete property. The eligible property must be approved in a brownfield plan.
Eligible activities are conducted on the property as part of the redevelopment project. As the property value increases, the captured tax increment revenues are used to reimburse the eligible costs. If captured school taxes will be used to pay for certain environmental response activities or all of the non-environmental activities, prior approval of a work plan by the Michigan Department of Environmental Qulaity/Michigan Economic Development Corporation (MDEQ/MEDC) is necessary.
Anyone who incurs eligible costs under an approved brownfield plan is entitled to reimbursement with tax increment revenues captured by a brownfield redevelopment authority.
In 2005, Oakland County was awarded a $400,000 Assessment Grant to be used to conduct Environmental Assessment activities for Brownfield properties located through out Oakland County. (Two hundred thousand dollars ($200,000) will be used to conduct work on Hazardous Substances sites and the other $200,000 will be used to conduct work on Petroleum sites.)
Oakland County awards these monies to developers to pay for portions of the environmental investigations needed for a specific site. These grant dollars help the developer supplement the costs of needed investigation activities.
Oakland County Brownfield Remediation Loan Fund: Oakland County was awarded a supplemental grant from the U.S. Environmental Protection Agency (USEPA) in the amount of $394,350 in 2004. An application was also been made to the USEPA to authorize transition of $155,650 to this grant from our original USEPA grant funding, for a grant total of $550,000. Four hundred and forty thousand dollars ($440,000) of these monies are to be used for loan(s) directed at site clean up. Terms and conditions of these loans are negotiable.
Contact Information:
Bradley Hansen, Environmental Program Coordinator
Oakland County Waste Resource Management
2100 Pontiac Lake Rd.
Waterford, MI 48328
248-858-8073 hansenb@oakgov.com
**Qualified Local Governmental Units (reference from above)
