City council talks about tax incentives and mortgage relief
The Ann Arbor City Council met at Larcom City Hall Thursday evening to approve the Industrial Installations Exemption Certificatea municipal tax incentive sanctioned by Michigan law to provide tax reductions of up to 50% to private development companies, between the city of Ann Arbor and Sartorius Bioanalytical Instruments, a German research-based biopharmaceutical company. The company provides technology for the creation of pharmaceutical products and currently has four locations in Washtenaw County. The board also approved a resolution collect and communicate mortgage information to low-to-middle income city employees and residents. Mayor Christopher Taylor, Councilman Erica Briggs, D-Ward 5, and Councilman Travis Radina, D-Ward 3, were absent.
Sartorius planned to expand its operation in Ann Arbor since last year. The company wanted to build a new 13,000 square meter factory in 3874 Research Park Drive, an environmentally contaminated site, to serve as a hub for its laboratory and bioprocess products and services in North America. According to Ann Arbor SPARKan economic development agency, the expansion of Sartorius should create 160 well-paying jobs. The expansion is also expected to create economic spinoffs advantages by inducing induced jobs and increasing the tax base of public service entities.
Currently, Sartorius has received strong support at the city and state level in recognition of its potential economic, environmental and community benefits, including the Michigan Strategy Fund announced by Governor Gretchen Whitmer and brownfields policy approved by the city during a April 4 City council meeting. The latter would use additional tax financing subsidize $2.7 million for the development of Sartorius. In exchange, in addition to economic and land contributions, developers must contribute $1.1 million to Ann Arbor’s Affordable Housing Fund. The Industrial Plant Exemption Certificate provides Sartorius with an additional financial incentive, paving the way for its eventual construction and expansion.
Councilmember Lisa Disch, D-Ward 1, noted that Sartorius hopes to redevelop a brownfield site and spoke about the sustainability efforts behind the construction proposed by Sartorius.
“We spoke for many hours with the planning commission about this and came to the conclusion that (Sartorius) is doing what is technically feasible in this climate, in this geography and in our weather conditions,” Disch said.
Council Member Jeff Hayner, D-Ward 1, said while he supports the tax incentive, the council should consider tax relief for property owners to better justify the tax benefits for corporations, especially in light of the recent budget allocation and property tax planwhich proposed an increase in the tax mile.
“When we say to the individual owner, ‘no (tax relief)’, and we say to society, ‘yes, there is something we can do’… It just doesn’t sit well with me,” said said Hayner.
Board member Ali Ramlawi, D-Ward 5, said the main reason for his support for additional corporate tax incentives is Sartorius’ commitment to the Ann Arbor Affordable Housing Fund in the Brownfields Policy. previously approved industries.
the Brownfields Policy dictates that development projects that use residential land must devote at least 15% of the units built to households whose income is equal to or less than 60% of the Area median income. Projects that do not use residential land must pay a royalty of $50,000 in addition to 2% of their overall private investment amount.
“There is a public benefit that will be given in return for (the brownfields policy),” Ramlawi said. “I like the way our Brownfield system is set up, where over $1 million will go into the affordable housing fund. It’s great to welcome more well-paying jobs to our area, but those jobs will compete with people who might be competing for housing. I know it’s a delicate balance, but it’s not mutually exclusive.
The resolution was adopted unanimously.
Council also voted on Resolution DC-2, which requires the city to collect and report mortgage information to low-to-middle income city employees and residents.
the original version of this resolution was discussed at a Board meeting on April 18 and specifically supported the provision of information materials from the Neighborhood Aid Society of America (NACA) on mortgages. NACA is a non-profit organization offering mortgages at below market rates, with no down payment and no closing costs. It offers mortgages at even lower interest rates to households earning 100% or less of the region’s median income.
UM grad and Ward 3 resident Brian Chambers advocated for NACA with his to research, titled “Ann Arbor’s Middle-Income Needs Analysis: Introducing the Neighborhood Assistance Corporation of America (NACA)”. His research found a huge drop in home ownership among middle-income households, who could potentially benefit from NACA mortgage products. According to the NACA, a middle-income household is defined by an annual income of $50,000 to $100,000.
The city changed the original version of the resolution to avoid mentioning NACA exclusively. The modification resolution, which was voted on at Wednesday’s meeting, called on the city to collect and communicate information about programs supporting low- and moderate-income mortgages to city employees and residents. NACA is now mentioned in the “Whereas” clause of the amended resolution.
During the public hearing, Chambers expressed his support for the alternative resolution and stressed the importance of addressing the challenges of homeownership in Ann Arbor.
“The City Council has done a lot to promote housing development in the city,” Chambers said. “It is my understanding that apart from affordable housing developments, it will be mainly rentals exposed to market rates. As we know, rents will continue to rise and therefore home ownership itself should be an additional priority of the city’s housing policy.
Linh Song, D-Ward 2, said she disagreed with the resolution. Song said she was suspicious of NACA due to her history.
“I’m very suspicious of the private entity (NACA) that was referenced before,” Song said. “This organization has present on the Baltimore City Council, and the way the organization was presented there is really, really problematic.
NACA introduced its RICH program at the Baltimore City Council on April 26. This program asks a city to sell its city-owned homes to qualified potential buyers for one dollar in exchange for buyers who have lived there for at least 10 years and renovate the home with the help of NACA and their city. NACA founder Bruce Marks harshly criticized Baltimore board members who did not support this program at the hearing and conducted a expression outside the building where a hearing was being held on the subject.
Song also questioned the real cause of homeownership problems and the city’s role in promoting homeownership.
“I worry about promoting home ownership when we are really struggling with the supply and provision of basic housing,” Song said. “And I’m not entirely sure what the city’s role is in promoting that. I don’t know if people are prevented from accessing property because they don’t have access to information (mortgages)…Throughout the pandemic, very low interest rates mortgages have been promoted.
Councilor Julie Grand, D-Ward 3, asked Milton Dohoney, the city administrator, to provide an update on changes the city has made since the last meeting. Dohoney explained the changes.
“Staff expressed concern that the earlier version of this resolution appeared to embrace the city by playing an exclusive role in single-vendor singling out,” Dohoney said. “I can’t say that all the problems are solved, but now we are promoting all the products on the market and I don’t see any problem with that.”
Ramlawi said that while he supported the resolution, he believed that solving the homeownership challenge for middle-income households would require more resources than the resolution calls for.
“I am shocked that this resolution simply calls for information dissemination, education and communication without budget impact and that would leave anyone reluctant,” Ramlawi said. “I think we have to do everything we can at all levels for this problem, and it’s not about choosing the most effective way.”
The resolution passed 6-2, with Song and Grand voting against.
Daily reporter Chen Lyu can be reached at [email protected].