CITY OF DETROIT TAX ABATEMENTS VERONICA FARLEY TAX

CITY OF DETROIT TAX ABATEMENTS 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) • Industrial Property Tax Exemption (PA 198 of 1974) • Commercial Rehabilitation Exemption (PA 210 of 2005) • Commercial Redevelopment Exemption (PA 255 of 1978)

WHY 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

HOW DO TAX ABATEMENTS WORK STEPS TAX ABATEMENT COUPON 1 Buy building, apply for abatement Buys Item and presents coupon 2 City/DEGC reviews application for financial need, statutory compliance & completion of all reviews and documentation Consumer spends additional money on other items in store 3 City doesn’t charge real property taxes on improvements, gets personal property Merchant takes $ off item taxes, income taxes and $ spent at local Consumer spends additional money on businesses other items in store

CONSIDERATIONS MADE WHEN RECOMMENDING INCENTIVES: CONSIDERATIONS Fiscal analysis Does the project actually needs the incentive to make money? (i. e “but for” analysis) Statutory compliance Does the project comply with the legal requirements? Income Tax Clearance Does applicant have any outstanding City of Detroit or State of Michigan income taxes? Accounts Receivable Tax Clearance Does the applicant have any outstanding blight tickets, personal property taxes, fines from the Fire Department, etc. ? Affordable Housing For 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?