February 18 03:43 AM

New policy torpedoes Imlay rehab districts

January 21, 2009
IMLAY CITY — City officials finally got an answer from the Lapeer County Commission regarding its request to establish a pair of Commercial Rehabilitation Districts within the city.

It's not the answer the city hoped to hear.

The city needed the county's permission to create Rehabilitation Districts in two areas along M-53. The state's CRD program would have allowed the city to freeze taxable values on properties in the two districts, thereby encouraging new development.

Although county commissioners didn't issue a specific denial of the request, a new policy they adopted Thursday on tax increment financing and economic development effectively shot down Imlay City's plans.

District 7 County Commissioner Ian Kempf, who represents Imlay City, voted against the policy which limits financing for development that requires the county's permission.

"The policy limited the total amount of economic development funds to five percent of the county budget," said Kempf. "We're already at 5.2 percent.

"It does not directly eliminate potential for economic development participation by the county," Kempf pointed out, "but it sends the message that if there's a program that needs county approval it's going to be difficult at best to obtain."

Imlay City Manager Amy Planck said the new policy is disappointing, but the city can still pursue development programs that don't require county commission approval.

"I think our request (for commercial rehab districts) opened the door for the county to establish some new regulations on communities that choose to capture extra voted millage," said Planck, alluding to the Imlay City DDA's decision to continue capturing such millages.

Planck noted that under the terms of CRD, the city would have had the option of freezing taxable values in the two districts for a period of 1-10 years, adding that the tax values would have risen after the freeze ended.

"I understand the county commissioners wanting to protect their revenues," Planck said, "but this program would not have represented a loss of revenue to the county."

Despite the setback, Planck said the city will continue to pursue programs that will stimulate development.

"This will prohibit us from doing some things," she said, "but not all tax incentives need county authorization. This was a brand-new program. There are other things we can do."

Assistant Editor Maria Brown contributed to this report.

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