August 29, 2012IMLAY CITY — With Commissioners Arlan Winslow and Tim Kaiser absent last Tuesday, Aug. 21, the commission again agreed to table a vote on a policy governing the duration of tax abatements for new and existing businesses.
While the matter of issuing 50-percent Industrial Facilities Tax Exemptions was often debated by previous city commissions, they had routinely granted them for the maximum allowable period of 12 years.
The current commission, however, decided recently to limit the duration of an IFT to Vintech Industries for a period of six years, though the company had sought the full 12 years.
That departure from protocol resulted in a visit from Lapeer Development Corp. Director Patricia Lucas on Aug. 7, who urged the commission to return to its more liberal application of abatements.
City Manager Wayne O'Neal shares Lucas's opinion, noting that other Lapeer County municipalities continue to grant the 12-year IFTs.
"We need to remember that prospective companies will be comparing different municipalities and levels of abatements," O'Neal said in an Aug. 30 communication to commissioners. "In Lapeer County, the other cities are granting 12-year IFTs. This is true of most cities in Michigan, as we are all vying for any available economic development and potential new jobs."
At last Tuesday's meeting and the Aug. 7 commission meeting, Mayor Margaret Guerrero-Deluca expressed opposition to granting 12-year exemptions.
Guerrero-Deluca argued there have been cases where companies granted IFTs have failed to follow though on the number of employees they initially said they would hire.
"My issue is we have eight major stakeholders and they've received abatements since inception," said Guerrero-Deluca. "Some of these businesses have stated they were going to bring in employees and they laid off employees.
"We haven't held any of these businesses accountable," she continued. "All of that comes into play to make sure these promises come to fruition."
She also alluded to the Michigan legislature's proposal to eliminate the state's Personal Property Tax and its possible impact on municipalities, including Imlay City.
"When this happens, the city stands to lose $250,000 in revenue," said Guerrero-Deluca. "With everything being so volatile, it seems like an inopportune time to pigeon-hole ourselves into a 12-year policy."
Mayor Pro-tem Walt Bargen voiced support for longer duration abatements, particularly given the competitive nature of business in Michigan's struggling economic.
"We have to have some consistency, realizing that we are trying to attract new business," said Bargen. "They need to have a sense of what they can expect when they come here."
LaFontaine speaks out
Imlay City business owner/developer Paul LaFontaine, who was present at the meeting, called Guerrero-Deluca's objections into question.
He pointed out there is a distinction between allowing 12-year IFTs, and being frustrated with a perceived lack of accountability from those who've been granted abatements in the past.
"To punish a business based on your inability to police matters of accountability is wrong," said LaFontaine. "This is a very competitive world and there are rules to play by. You can't telegraph to people that you're not competitive."
He also addressed the mayor's concerns about the possible elimination of the Personal Property Tax.
"Be less concerned about what Lansing may or may not do and be willing to be aggressive and compete with other communities."
Following the meeting, LaFontaine expressed frustration with the commission for its lack of positivity and vision for the future.
He said rather than admonishing existing businesses for their employment track records, the commission should be grateful they are providing jobs and contributing to the city's tax base.
"They're also not taking into account that we've just experienced the most devastating economic collapse we've seen," said LaFontaine. "We need to give these businesses the benefit of the doubt. We shouldn't be engaged in a witch hunt against businesses.
"We are our own worst enemy in Imlay City," LaFontaine said. "If we keep fighting these battles we're going to lose the war.
"If there's a lack of accountability, then deal with it," he continued, "but don't undermine and limit our opportunities to attract new business."
Tom Wearing started at the Tri-City Times in 1989, covering the Village of Capac as a beat reporter. He later served stints as assistant editor and editor. Today, he covers Imlay City and Almont as a staff writer. He enjoys music and plays drums and sings with various musical groups in the Detroit Metropolitan area.