CITY OF FERNDALE REQUEST FOR COUNCIL ACTION

Transcription

1 Agenda Item 5A CITY OF FERNDALE REQUEST FOR COUNCIL ACTION FROM: SUBJECT: Justin Lyons, Planner Establishment of an Obsolete Property Rehabilitation District (OPRA) 1450 Jarvis Street - All European Auto Supply, Inc. SUMMARY & BACKGROUND: The Community and Economic Development department is in receipt of a petition to establish an Obsolete Property Rehabilitation Act (OPRA) District on the parcel located at 1450 Jarvis Street. Gill- Wright Properties, LLC. (on behalf of All European Auto Supply, Inc.) is proposing to transfer their business operations to the City of Ferndale. The M-2 (General Industrial)-zoned property is located south of E. 9 Mile Road at the corner of Wanda Street and Jarvis Street. The 25,535 square foot vacant industrial building was constructed in two phases (eastern portion in 1938 and remaining building in 1998) and historically used for manufacturing and tool and die operations. The building has been vacant for several years and has been deemed functionally by Oakland County Equalization. The applicant is proposing to rehabilitate the building, including asbestos and mold removal, repair exterior masonry and roof replacement. In order to help make this project economically feasible, All European Auto Supply, Inc. is requesting the City of Ferndale consider utilization of incentives by way of the state s Obsolete Property Rehabilitation Act. The proposed OPRA District would be the second such district proposed in the City of Ferndale. As referenced during the approval of the establishment of the district for JS Senior Living last month, OPRA is an incentive tool, similar to Brownfield Redevelopment, which delays the immediate tax penalty for making an investment in an obsolete property. The property taxes for the rehabilitated property are based on the previous year's (prior to rehabilitation) existing taxable value. The existing taxable value is frozen for the duration of the exemption up to a maximum of a 12 year abatement period following purchase and renovation. After the abatement period, the property s taxable value would increase based on the latest assessment. Communities such as Pontiac and Ypsilanti have utilized OPRA districts to incentivize economic development in older areas with functionally obsolete properties that require significant investment to redevelop and/or rehabilitate buildings for future use. The establishment of an OPRA District does not mean an applicant would automatically be approved for OPRA exemption and does not set the duration of the abatement period. Should City Council approve the creation of an OPRA District for the proposed parcels, All European Auto Supply, Inc. would be required to submit an OPRA exemption certification application for review by Staff and Oakland County Equalization. Should Staff recommend approval, City Council would hold a public hearing with notice to all taxing jurisdictions and consider the exemption certificate. RECOMMENDATION: Staff recommends City Council approve the establishment of the proposed OPRA District. Approval will allow Staff to review the pending OPRA exemption certification application and determine if the exemption is appropriate as proposed.

2 ATTACHMENTS: Petition to Establish an OPRA District by All European Auto Supply, LLC May 19, 2016 Petition to Establish an OPRA District Amendment Letter June 27, 2016 OPRA District Establishment Public Notice June _, 2016 MEDC OPRA Fact Sheet COUNCIL AGENDA DATE: July 11, 2016 CITY ATTORNEY REVIEW: N/A FINANCE DIRECTOR REVIEW: July 7, 2016 CITY MANAGER REVIEW: July 7, 2016 RECOMMENDED ACTION: Moved by _, seconded by _, that City Council APPROVE the attached resolution regarding the establishment of an Obsolete Property Rehabilitation District at the parcel listed below: RESOLUTION: WHEREAS, pursuant to PA 146 of 2000, the City of Ferndale has the authority to establish Obsolete Property Rehabilitation Districts within the City of Ferndale; and WHEREAS, Gill-Wright Properties, LLC has filed a written request with the clerk of the City of Ferndale requesting the establishment of the Obsolete Property Rehabilitation District for an area on its property located in the City of Ferndale hereinafter described; and WHEREAS, the City Council of the City of Ferndale determined that the district meets the requirements set forth in section 3(1) of PA 146 of 2000; and WHEREAS, written notice has been given by mail to all owners of real property located within the proposed district and to the public by newspaper advertisement in the Daily Tribune and/or by public posting of the hearing on the establishment of the proposed district; and WHEREAS, on July 11, 2016 a public hearing was held and all residents and taxpayers of the City of Ferndale were afforded an opportunity to be heard thereon; and WHEREAS, the City Council deems it to be in the public interest of the City of Ferndale to establish the Obsolete Property Rehabilitation District as proposed. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ferndale that the following described parcel(s) of land situated in the City of Ferndale, Oakland County, and State of Michigan, to wit:

3 PROPERTY DESCRIPTION: LAND SITUATED IN THE CITY OF FERNDALE, COUNTY OF OAKLAND, STATE OF MICHIGAN IS DESCRIBED AS FOLLOWS: T1N, R11E, SEC 35 PART OF SE ¼ OF NW ¼ BEG AT PT DIST N W FT & S W FT FROM CEN OF SEC, TH S W FT, TH N W FT, TH N E FT, TH S E FT TO BEG 1.72 A, parcel number , commonly known as 1450 Jarvis Street. be and here is established as an Obsolete Property Rehabilitation District pursuant to the provisions of PA 146 of 2000 to be known as (name of district) Obsolete Property Rehabilitation District No.. AYES: NAYS: RESOLUTION ADOPTED/DENIED. I, Marne McGrath, the duly appointed City Clerk of the City of Ferndale, Oakland County, Michigan, do hereby certify that the foregoing is a true and complete copy of a Resolution duly adopted by the City Council of the City of Ferndale at a regular meeting held on July 11, IN WITNESS WHEREOF, I have hereunto affixed my official signature on this 11 th day of July Marne McGrath, City Clerk

4 June 27, 2016 Importers & Distributors of Fine European Car Parts The City of Ferndale, Michigan 300 East Nine Mile Road Ferndale, Michigan RE: AMENDMENT REQUEST ASSOCIATED Request to form an Obsolete Property Rehabilitation District (OPRD) at 1450 Jarvis Street, Ferndale, Michigan Honorable City Council: Please accept this letter as an amendment to the request to establish an Obsolete Property Rehabilitation District for the property located at 1450 Jarvis Street, Ferndale, Michigan referred to herein as the Property. This letter clarifies Gill-Wright Properties, LLC will be the applicant associated with this request. Gill-Wright Properties, LLC, is the purchasing entity and subsequent owner for the Property on behalf of All European Auto Supply, Inc. Gill-Wright Properties, LLC is looking forward to working with the City in efforts to remediate and successfully repurpose the property. Respectfully submitted Mr.Rotem Gill, President Gill-Wright Properties, LLC On behalf of All European Auto Supply

5 Importers & Distributors of Fine European Car Parts May 19, 2016 The City of Ferndale, Michigan 300 East Nine Mile Road Ferndale, Michigan RE: Request to form an Obsolete Property Rehabilitation District (OPRD) at 1450 Jarvis Street, Ferndale, Michigan Honorable City Council: Please accept this letter as a request to form an Obsolete Property Rehabilitation District for the property located at 1450 Jarvis Street, Ferndale, Michigan referred to herein as the Property and described on Attachment A. The property is currently under contract and All European Auto Supply anticipates closing on the property in June Company and Project Synopsis All European Auto Supply, a small local business, plans to rehabilitate the existing building at 1450 Jarvis Street to transfer their business operations to Ferndale. All European Auto Supply Inc. is an independent wholesale importer & distributor for original equipment and quality aftermarket replacement parts for German, Swedish and English cars. Established in 1994, they have been a leader in the Auto Parts industry for over 20 years and takes pride in ability to provide excellent customer service. The obsolete property redevelopment project consists of one parcel, totaling 1.72 acres and contains one 25,535 square foot vacant industrial building that is considered functionally obsolete. Historical operations consisted of industrial, tool and die uses. The redevelopment includes extensive renovation to the current building to repurpose 3,115 square feet for office space and the remainder for warehousing. Currently the existing office space is unsuitable as it has been stripped of building materials and is partially unfinished. Renovations will bring the building up to code as well as address required asbestos abatement. Additional information on the project is included in Attachment A. Renovation activities are anticipated to commence in the summer of 2016 and are anticipated to be completed over the following two to six months. The Necessity for Tax Relief Substantial investment is necessary to rehabilitate the property into a viable, long-term venture. The property is currently vacant and will require extensive upgrades for continued use, due to deferred maintenance and asbestos abatement. Due to the financial investment required to repurpose and rehabilitate the Property, an Obsolete Property Rehabilitation District and Exemption Certificate are being requested 1

6 Request to form an Obsolete Property Rehabilitation District for 1450 Jarvis Street, Ferndale, Michigan for All European Auto Supply under the Obsolete Property Rehabilitation Act (PA 146). The rehabilitation project that is proposed in Attachment A would not be viable without receipt of an exemption certificate. PA 146 Request A 12-year abatement is being requested. Economic Advantages of the Rehabilitation The granting of the Obsolete Property Rehabilitation tax abatement will not result in any fewer taxes to the City of Ferndale in the short-term or long-term. During the duration of the abatement, approximately $34,000 in new school taxes are anticipated to be generated. On a short term basis construction jobs will be created that will increase the daytime density of the area resulting in spin off spending at local stores, gas stations, and restaurants. The project will create 30 and retain 20 jobs associated with the growth and expansion of the company to this new location. Aid through an OPRA Exemption Certificate will allow a local business expand its operations in Ferndale and facilitate its continued growth. Along with facilitating successful reuse of an obsolete building in the City, in the long-term following expiration of the 12-year abatement, the building will deliver an increase in tax revenue of approximately $11,500 annually. The total initial project investment is approximately $1 Million (including construction, soft costs, equipment, and acquisition) with an additional $500,000 anticipated over the next several years. All European Auto Supply is looking forward to working with the City in efforts to remediate and successfully repurpose the property. Respectfully submitted Attachments: A: Detailed Project Description B: Current Property Photos C: Tax Increment Financing Table D: Preliminary Floor Plans/Project Renderings Mr.Rotem Gill, President All European Auto Supply 2

7 Attachment A

8 Obsolete Facility Description The property consists of one parcel; located south of 9 Mile Road at the corner of Wanda Street and Jarvis Street, under a quarter mile from Wanda Park. Wanda Street is a dividing line between a bustling industrial section of the city and one of its large residential suburbs. The property totals 1.72 acres and is currently occupied by a 25,535 square foot vacant industrial building that is considered functionally obsolete. The property has primarily been occupied by various tool and die operations. The eastern portion of the building was constructed in 1938, and contains one two story office area (3,115 square feet) and a 16,789 square foot manufacturing area. The remainder of the building was constructed in 1998, and contains approximately 5,630 square feet of floor space that was utilized for press operations. The building is currently unoccupied and underutilized, as there have been no operations for the last several years. The property was historically used for manufacturing and steel forging and tool and die operations from the 1950s until Operations and occupants from 1938 until 1950 are unknown. The photo on the right depicts the existing exterior, which is outdated and an eyesore along the border of one of the City s large residential suburbs. Proposed Use, Nature and Extent of Rehabilitation The proposed redevelopment entails significant renovations being made to the existing building, which has suffered neglect, vacancy, and deferred maintenance for extended periods of time and has severely depreciated. In order to bring the building back to successful reuse, and to upgrade to the proposed office and warehouse, a significant portion of investment will be required for interior demolition, building restoration and interior finishes. Attachment A Page 1 of 4

9 The rehabilitation of the building at 1450 Jarvis Street is a vital component for the expansion of All European Auto Supply, which is a local business and employer, into the City of Ferndale. The project entails extensive renovations to the current building to repurpose 3,115 square feet for office space with the remainder for warehousing. In order to successfully reuse the existing building and bring it into functional use as such, the current building will require significant upgrades and repairs. The initial phase of repurposing includes renovation of the first floor offices, complete roof replacement, asbestos and mold removal, construction of firewalls, installation of new storage/shelving, repair exterior masonry, and gutting of second floor. First floor office renovation will include window replacement, installation of additional bathrooms, replacement of flooring, ceilings, walls, doors, electrical and installation of energy efficient lighting and HVAC. This first phase is anticipated to amount to $400,000 to $500,000 in private investment. The second phase, which is anticipated to occur over the next several years, includes the creation of additional office spaces within the primed second floor, upgrade the building s exterior for a more modernization appearance, and the resurfacing of the parking lot, estimated at an additional $500,000. A pre-renovation Asbestos Containing Materials (ACMs) Survey of the property conducted in April 2016 concluded that ACMs are present, some of which will require removal by a licensed abatement contractor during renovation activities. Removal will be necessary based on current condition of the ACMs or if it is to be disturbed as part of renovations. ACMs were identified in window glazing, door caulk, pipe insulation, floor tiles, mudded fittings and roofing materials. The required abatement will add significant cost to the renovations of the property. The property is currently functionally obsolete and has been vacant for several years. The proposed development will revitalize the property, allow for a business to grow, and will bring needed jobs to the City. Attachment A Page 2 of 4

10 Renovations for the project include; Asbestos Abatement and mold removal Addition of bathrooms Roof repairs Installation of energy efficient lighting HVAC installations Interior finishes; drywall and steel studs/insulation, hard tile, flooring, painting Rough carpentry Interior build-out Fire protection systems Electrical work All European Auto Supply intends to apply for a 12 year real property tax abatement under the provisions of a PA 146 tax abatement. The remaining sources of funds for the project are Owner Equity and Permanent Financing. The complete development investment is estimated at a $1 Million and an anticipated $500,000 in the several years following. The anticipated value of the OPRA exemption certificate totals approximately $81,584 over the course of 12 years. Time Schedule Renovation will begin on the property in summer Completion of the first phase is anticipated over the following two to six months. Statement of Economic Advantages All City of Ferndale taxes are now current. The granting of the Obsolete Property Rehabilitation tax abatement will not result in any fewer taxes to the City in the short-term or long-term and will aid in bringing the property back to safe and successful reuse. On a short term basis, a minimum of construction jobs will be created during renovation. On a long-term basis, All European Auto Supply is moving more than 20 jobs from its current location to the City and in addition, plans to add approximately 30 full-time equivalent (FTE) jobs, all with wages averaging $25 to $30 an hour. The expansion to a larger facility will encourage and promote this continued growth into the future. Additional indirect benefits will be created such as spin off spending in the City by both construction and FTE jobs. Attachment A Page 3 of 4

11 The proposed redevelopment contributes greatly to the overall revitalization of Ferndale s industrial area. The proposed development will encourage the reuse and renovations of additional nearby vacant industrial buildings. Over time, the successful redevelopment and branding will have a positive impact on nearby property values. The property is currently generating only $17,108 in local taxes and $7,186 in school taxes, which would likely continue to decline without the proposed investment as the building would continue to deteriorate. Immediately following redevelopment, the City will see an estimated increase of $34,000 in new school taxes over the course of the abatement. Following the expiration of the abatement, $11,558 in anticipated in yearly tax revenue (in addition to the existing tax base, which will remain during the duration of the abatement). Following the exemption expiration, initial rehabilitation and long-term improvements, the property will contribute considerably more value to the City s tax roll. Without this investment, it is possible that the existing value of the property would likely continue to fall. Legal Description The proposed exemption certificate includes the following parcel and legal description; Address: 1450 Jarvis Street, Ferndale, Michigan Legal Description: PID : T1N, R11E, SEC 35 PART OF SE ¼ OF NW ¼ BEG AT PT DIST N W FT & S W FT FROM CEN OF SEC, TH S W FT, TH N W FT, TH N E FT, TH S E FT TO BEG 1.72 A Attachment A Page 4 of 4

12 Attachment B

13 Abatement Estimates Table Base Taxable Value (pre-development) Estimated New Taxable Value (estimated increase of 1%/year) Incremental Difference (New Taxable Value minus Existing) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Totals $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 299,400 $ 400,000 $ 400,000 $ 404,000 $ 408,040 $ 412,120 $ 416,242 $ 420,404 $ 424,608 $ 428,854 $ 433,143 $ 437,474 $ 441,849 $ 100,600 $ 100,600 $ 104,600 $ 108,640 $ 112,720 $ 116,842 $ 121,004 $ 125,208 $ 129,454 $ 133,743 $ 138,074 $ 142,449 Local Taxes County PK & REC $ 72 $ 24 $ 24 $ 25 $ 26 $ 27 $ 28 $ 29 $ 30 $ 31 $ 32 $ 33 $ 34 $ 346 HCMA $ 64 $ 22 $ 22 $ 22 $ 22 $ 24 $ 25 $ 26 $ 27 $ 28 $ 29 $ 30 $ 31 $ 306 OCPTA $ 299 $ 101 $ 101 $ 105 $ 101 $ 113 $ 117 $ 121 $ 125 $ 129 $ 134 $ 138 $ 142 $ 1,426 Zoo Authority $ 30 $ 10 $ 10 $ 10 $ 10 $ 11 $ 12 $ 12 $ 12 $ 13 $ 13 $ 14 $ 14 $ 142 Art Institute $ 60 $ 20 $ 20 $ 21 $ 20 $ 22 $ 23 $ 24 $ 25 $ 26 $ 27 $ 28 $ 28 $ 285 City Operating $ 4,297 $ 1,444 $ 1,444 $ 1,501 $ 1,444 $ 1,618 $ 1,677 $ 1,737 $ 1,797 $ 1,858 $ 1,920 $ 1,982 $ 2,045 $ 20,466 Refuse Disposal $ 645 $ 217 $ 217 $ 225 $ 217 $ 243 $ 252 $ 260 $ 270 $ 279 $ 288 $ 297 $ 307 $ 3,070 Debt Service $ 1,933 $ 650 $ 650 $ 675 $ 650 $ 728 $ 754 $ 781 $ 808 $ 836 $ 864 $ 891 $ 920 $ 9,206 Library-Oper $ 284 $ 95 $ 95 $ 99 $ 95 $ 107 $ 111 $ 115 $ 119 $ 123 $ 127 $ 131 $ 135 $ 1,351 OCC $ 474 $ 159 $ 159 $ 165 $ 159 $ 178 $ 185 $ 191 $ 198 $ 205 $ 212 $ 218 $ 225 $ 2,256 ISD Voted $ 947 $ 318 $ 318 $ 331 $ 318 $ 357 $ 370 $ 383 $ 396 $ 410 $ 423 $ 437 $ 451 $ 4,511 ISD Allocated $ 60 $ 20 $ 20 $ 21 $ 20 $ 23 $ 23 $ 24 $ 25 $ 26 $ 27 $ 28 $ 28 $ 285 County Operating $ 1,225 $ 411 $ 411 $ 428 $ 411 $ 461 $ 478 $ 495 $ 512 $ 529 $ 547 $ 565 $ 583 $ 5,832 City Oper.-Voted $ 1,334 $ 448 $ 448 $ 466 $ 448 $ 502 $ 521 $ 539 $ 558 $ 577 $ 596 $ 615 $ 635 $ 6,353 Library-Voted $ 295 $ 99 $ 99 $ 103 $ 99 $ 111 $ 115 $ 119 $ 124 $ 128 $ 132 $ 136 $ 141 $ 1,407 HPS 12 Bong $ 898 $ 302 $ 302 $ 314 $ 302 $ 338 $ 351 $ 363 $ 376 $ 388 $ 401 $ 414 $ 427 $ 4,278 HPS Sinking Fund $ 299 $ 101 $ 101 $ 105 $ 101 $ 113 $ 117 $ 121 $ 125 $ 129 $ 134 $ 138 $ 142 $ 1,426 Rubbish-Bus/Com $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - School Debt $ 3,892 $ 1,308 $ 1,308 $ 1,360 $ 1,412 $ 1,465 $ 1,519 $ 1,573 $ 1,628 $ 1,683 $ 1,739 $ 1,795 $ 1,852 $ 18,641 Total Local Taxes $ 17,108 $ 5,748 $ 5,748 $ 5,977 $ 5,855 $ 6,441 $ 6,676 $ 6,914 $ 7,155 $ 7,397 $ 7,642 $ 7,890 $ 8,140 $ 81,584 School Taxes School Operating $ 5,389 $ 1,811 $ 1,811 $ 1,883 $ 1,956 $ 2,029 $ 2,103 $ 2,178 $ 2,254 $ 2,330 $ 2,407 $ 2,485 $ 2,564 $ 25,811 SET $ 1,796 $ 604 $ 604 $ 628 $ 652 $ 676 $ 701 $ 726 $ 751 $ 777 $ 802 $ 828 $ 855 $ 8,604 Total School Taxes $ 7,186 $ 2,414 $ 2,414 $ 2,510 $ 2,607 $ 2,705 $ 2,804 $ 2,904 $ 3,005 $ 3,107 $ 3,210 $ 3,314 $ 3,419 $ 34,414

14 Attachment C

15 Photographs From Site Reconnaissance PM Project No Location: 1450 Jarvis Street, Ferndale, Michigan Photograph 1 Exterior view of the building Photograph 2 Exterior view of the building

16 Photographs From Site Reconnaissance PM Project No Location: 1450 Jarvis Street, Ferndale, Michigan Photograph 3 View of inside the warehouse portion Photograph 4 View of inside the warehouse portion

17 Photographs From Site Reconnaissance PM Project No Location: 1450 Jarvis Street, Ferndale, Michigan Photograph 5 View of inside the warehouse portion Photograph 6 View of inside the warehouse portion

18 Photographs From Site Reconnaissance PM Project No Location: 1450 Jarvis Street, Ferndale, Michigan Photograph 7 View of inside the office/storage area Photograph 8 View of inside the bathroom

19 Attachment D

20

21

22 CITY OF FERNDALE NOTICE OF PUBLIC HEARING ON THE FORMATION OF AN OBSOLETE PROPERTY REHABILITATION DISTRICT AND DESIGNATION OF OBSOLETE PROPERTY REHABILITATION DISTRICT BOUNDARIES The Ferndale City Council will hold a Public Hearing in the Ferndale Council Chambers, 300 East Nine Mile Road, Monday, July 11, 2016 at 7:00 PM, to consider the adoption of a resolution establishing an obsolete property rehabilitation district for the City of Ferndale and designating the boundaries of an obsolete property rehabilitation district in connection, therewith, pursuant to Public Act 146 of The boundaries of the proposed obsolete property rehabilitation district shall include one parcel to be located at: T1N, R11E, SEC 35 PART OF SE ¼ OF NW ¼ BEG AT PT DIST N W FT & S W FT FROM CEN OF SEC, TH S W FT, TH N W FT, TH N E FT, TH S E FT TO BEG 1.72 A, parcel number , commonly known as 1450 Jarvis Street. Any resident or property owner may participate in the hearing, or submit written comments to the Community and Economic Development Department prior to Monday, July 11, For more information, please contact the Community and Economic Development Department at Justin Lyons, Planner Community & Economic Development

23 OBSOLETE PROPERTY REHABILITATION ACT (OPRA) The Obsolete Property Rehabilitation Act (OPRA), Public Act 146 of 2000 provides for a tax incentive to encourage the redevelopment of obsolete buildings. A new exemption will not be granted after December 31, 2016, but an exemption then in effect will continue until the certificate expires. The tax incentive is designed to assist in the redevelopment of older buildings in which a facility is contaminated, blighted or functionally obsolete. The goal is to rehabilitate older buildings into vibrant commercial and mixed-use projects. WHO IS ELIGIBLE TO APPLY? OPRA tax abatements may be given for those eligible projects that take place on an obsolete property and result in a commercial or mixed-use building project located in only the qualified local units of government. HOW DOES IT WORK?IA? A community essentially freezes the existing taxable value on a designated facility for up to 12 years. Additionally, the State Treasurer may approve reductions of half of the school operating and state education taxes for a period not to exceed six years for 25 applications annually for rehabilitated facilities. By freezing the taxable value, it provides an incentive for the developer to make significant improvements to a building without increasing the property taxes on the building. WHAT IS THE PROCESS? Note: The following steps are offered as general guidelines only and the legislation should be reviewed by local officials prior to starting the designation process. Local Government Process to Designate an Obsolete Property Rehabilitation District (OPRD) 1. The governing body of a qualified local unit of government, by resolution, may designate one or more OPRDs within that local governmental unit. The OPRD may consist of one or more parcels or tracts of land that is characterized by obsolete commercial or obsolete commercial housing property. 2. The qualified local unit of government may establish an OPRD on its own initiative or upon a written request by at least 50 percent of the owners of the property within the proposed OPRD. 3. Written notice of a public hearing is provided by certified mail to all owners of all real property within the proposed district. 4. The governing body holds a public hearing with a public notice required not less than 10 days or more than 30 days prior to the date of the hearing. 5. The governing body adopts a resolution establishing the district and the determination that it meets the requirements under the legislation. Owner/Developer Process for Obtaining an OPRA Certificate 1. An owner of an obsolete property within the district files an application for an OPRA certificate with the clerk of the local government that includes the details of the project. 2. Once a completed application is received, the clerk must notify the assessor and each taxing unit that levies property taxes (e.g. county, community college, library, etc.). 3. The governing body holds a public hearing prior to acting on the resolution regarding the certificate. 4. Within 60 days of receipt of application, the local unit of government shall by resolution approve or disapprove the application for the certification for up to 12 years. The public hearings for the district and the exemption certificate may be held on the same day, but with individual public hearings. 5. Once approved locally, the application and resolution must be sent to the State Tax Commission (STC). The STC has 60 days to approve or disapprove the request. To apply for the abatement of school millage, the developer must make michiganbusiness.org 2015 Michigan Economic Development Corporation sm 03/16B

24 note of this on the application form. The STC is responsible for final approval and issuance of all OPRA certificates. WHY WOULD A COMMUNITY WANT TO OFFER AN OBSOLETE PROPERTY TAX REHABILITATION TAX ABATEMENT? The OPRA incentive is used to encourage the redevelopment of blighted buildings. In many cases, this could be an abandoned, multi-story industrial building that is now more suited for commercial or residential rental units. To the developer, the advantage is savings on property taxes. The tax incentives essentially freeze the local property taxes for up to 12 years, exempting from local property tax all real property improvements. In addition, the State Treasurer has the ability to exempt one-half of the school millage for up to six years on 25 projects per year. CONTACT INFORMATION For more information contact the MEDC Customer Contact Center at michiganbusiness.org 2015 Michigan Economic Development Corporation sm 03/16B