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 Plant Exemption Certificate, a municipal tax incentive sanctioned by Michigan law to provide tax reductions of up to up to 50% to private development companies, between the city of Ann Arbor and Sartorius BioAnalytical Instruments, a German biopharmaceutical research company. The company provides technology for the creation of pharmaceutical products and currently has four locations in Washtenaw County. The council also approved a resolution to collect and communicate mortgage information to employees and low-to-moderate income city residents. Mayor Christopher Taylor, Councilman Erica Briggs, D-Ward 5, and Councilman Travis Radina, D-Ward 3, were absent.

Sartorius plans to expand its operations in Ann Arbor since last year. The company wanted to build a new 13,000 square meter factory at 3874 Research Park Drive, an environmentally contaminated site, to serve as a center for its laboratory and bioprocess products and services in North America. According to Ann Arbor SPARK, an economic development agency, Sartorius’ expansion is expected to create 160 well-paying jobs. The expansion is also expected to create economic benefits by creating indirect 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 Strategic Fund announced by Governor Gretchen Whitmer and the approved Brownfields Policy. by the city during a municipal council on April 4. Meet. The latter would use additional tax funding to 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 the Ann Arbor Affordable Housing Fund. The Industrial Plant Exemption Certificate provides Sartorius with an additional financial incentive, paving the way for its eventual construction and expansion.

Councilor Lisa Disch, D-Ward 1, noted that Sartorius hopes to redevelop an environmentally polluted site and spoke about the sustainability efforts behind Sartorius’ proposed construction.

“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 that while he supports the tax incentive, the council should consider tax relief for property owners to better justify the tax benefits for corporations, particularly at the in light of the recent budget allocation and the property tax plan, which 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 states that development projects that use residential land must dedicate at least 15% of the units built to households whose income is at or below 60% of the area’s 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 an April 18 Council meeting and specifically supported the provision of Neighborhood Assistance Corporation of America (NACA) educational materials 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 graduate and Ward 3 resident Brian Chambers has advocated for NACA with his 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 amended 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 made a presentation to the Baltimore City Council, and the way the organization was presented there is really, really problematic.”

NACA presented its RICH program to 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 council members who did not support the program at the hearing and led a protest outside the building where a hearing on the matter was being held.

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 (mortgage) information…Throughout the pandemic, very low interest rate 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 although he supported the resolution, he believed that solving the problem of homeownership 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].

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