Ypsi’s Karen and Eric Maurer challenge Snyder on brownfield and historic preservation tax credits

Local real estate developers Eric and Karen Maurer were featured in today’s Detroit Free Press, in an article about the Governor’s recent decision to eliminate tax credits like those which were utilized to restore several of the buildings along Ypsilanti’s Michigan Avenue corridor. In the following clip, you’ll not only hear the Maurers’ point of view, but that of the administration, expressed by Mike Finney, the newly-appointed head of the Michigan Economic Development Corporation (MEDC), who suggests that worthy projects can still get the funding they need, all-be-it from a much smaller fund.

The Ann Arbor SPARK business incubator in Ypsilanti is the sort of entrepreneurial effort that Gov. Rick Snyder hopes to promote.

There, start-up companies, often no more than one or two employees strong, occupy cubicles and share business services. Snyder served as SPARK’s founding chairman, and recently named SPARK’s former president, Mike Finney, to serve as president and CEO of the Michigan Economic Development Corp.

Yet this entrepreneurial effort in Ypsilanti — a model for promoting entrepreneurship — might never have existed without the kind of incentives that Snyder is trying to zero out.

Developers Karen and Eric Maurer, who own the building where SPARK leases space, raised about 25% of the $2 million needed to renovate this formerly vacant late 1800s building using two types of credits. One was for rehabilitating historic structures and the other was for renovating brownfield buildings….

But Finney contended the deal could still get done under the new system Snyder has proposed. Tax credits would go away under Snyder’s plan, but the state would offer a $100-million pool of incentives to help worthwhile projects happen.

“We would still be able to do that deal using the incentives that the governor has been proposing,” Finney said Monday….

Gov. Rick Snyder has proposed eliminating all such credits in his new budget. He offers instead a streamlined tax code with lower business taxes for all, saying he doesn’t want to pick winners and losers by favoring some types of deal with incentives.

In place of tax-credit incentives, Snyder proposes creating a pool of $100 million annually to pay for incentives to real estate projects like the Maurers’ as well as to filmmakers and entrepreneurs….

“Historic and brownfield (credits) would go away, but it would be replaced by this appropriation, which we would be free to use in as reasonable a manner as possible.”

Developers and urban officials are likely to dispute that. Last week, the Detroit Brownfield Redevelopment Authority released a tally showing that this single agency in Detroit had approved $36.7-million worth of brownfield tax credits in 2010.

But Finney said that too many credits have been awarded for projects that never get done. By selectively awarding incentives as part of the appropriation process from the $100-million pool, the state will be better able to pick the projects most likely to happen….

I hadn’t realized until I read the article just now that this $100 million fund would also be used to cover film industry incentives, as well as any other projects that might be categorized as entrepreneurial in nature. I’m sure I don’t need to tell you this, but that’s an awful lot of people fishing in the same very small pond. And, I could be wrong, but it sounds to me like the only folks around this pond who are going to have hooks on the ends of their strings are going to be those developers with big, corporate names attached. In other words, I don’t see Water Street happening unless someone big like Google or Koch Industries says they’re interested in building a campus in Ypsi. Hopefully I’m wrong about that, though.

As for the whole bit about the state not wanting to “pick winners and losers,” I’d encourage you to read the comments left on this site a few days ago by former Ypsi City Planner Richard Murphy.

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24 Comments

  1. Andrew Jason Clock
    Posted March 8, 2011 at 10:36 pm | Permalink

    “Historic and brownfield (credits) would go away, but it would be replaced by this appropriation, which we would be free to use in as reasonable a manner as possible.”
    “But Finney said that too many credits have been awarded for projects that never get done. By selectively awarding incentives as part of the appropriation process from the $100-million pool, the state will be better able to pick the projects most likely to happen….”

    Um, am I crazy or is he talking about picking projects the government views as winners in these quotes, after giving the line about eliminating tax credits to avoid picking winners and losers?

  2. Posted March 8, 2011 at 10:38 pm | Permalink

    Winners and losers?

    “By selectively awarding incentives as part of the appropriation process from the $100-million pool, the state will be better able to pick the projects most likely to happen….”

    Snyder’s ED guy pretty much just admitted that they would be picking and choosing who the winners and losers would be — in those words. Don’t get me started on why would the state want to give credits to projects that were already likely to happen — I’m with Murph in emphasizing that the reason they exist is to facilitate projects that wouldn’t have happened otherwise.

  3. Posted March 8, 2011 at 10:56 pm | Permalink

    Not only will they be picking winners and losers, but I think, when push comes to shove, the projects that are going to be deemed “most likely to happen” are going to be those with big corporate names attached. I don’t see local players like the Maurers getting too far in the process.

  4. Carole
    Posted March 9, 2011 at 1:16 am | Permalink

    The Maurers are using tax credits to give downtown marijuana on Michigan Avenue. If we give them more tax credits maybe they will rent to a tax chain.

  5. Andrew Jason Clock
    Posted March 9, 2011 at 1:24 am | Permalink

    Would you prefer abandoned buildings, Carole?

  6. Jeff
    Posted March 9, 2011 at 8:34 am | Permalink

    Naomi Klein on Democracy Now right now.

    A propos to some of these discussions: Klein makes an implicit link between Obama and Scott Walker (and Snyder and on and on), in that the President is pushing charter schools hard, which is primarily about weakening and then eventually eliminating teacher’s unions.

  7. Eel
    Posted March 9, 2011 at 9:22 am | Permalink

    Aren’t the Maurers Republicans? I’m pretty sure they are. I always like it when Republicans complain about the shutting down of government programs that increase their personal wealth. I bet they also complain about tax dollars being “wasted” elsewhere, like on the salaries of public employees. I know the type.

  8. French Sand
    Posted March 9, 2011 at 11:16 am | Permalink

    Apparently Rove has just fallen in love with Snyder.

  9. Posted March 9, 2011 at 11:45 am | Permalink

    In addition to my previous comments, I’m mystified by the idea that a legislative appropriations process would work better than the current administrative process.

    Let’s say you’re a developer, trying to figure out whether a construction project is worth your time — especially a big one, like the Book Cadillac or the Durand Hotel in Flint, or any of Grand Rapids’ big downtown projects, which take careful knitting together of literally dozens of different funding types and sources. As you, the developer, are penciling out this project, would you prefer to be thinking about (a) a well-defined administrative process with established standards & criteria, applied by professionals, or (b) a legislative process that is by definition political and determined strongly by the particular representatives who sit on certain committees, and who may have some pet project in their district (or by their friends) that they’re squirreling away funding capacity for?

    Developers don’t like uncertainty, because uncertainty = risk; turning a clear administrative process into a legislative black box is a great way to bring development to a screeching halt. It’s not even that fewer projects will get through the system, but that fewer developers will even try, or even consider working here.

    Meanwhile, Andrew already excerpted out one of my favorite meaningless sound bites on this – “Finney said that too many credits have been awarded for projects that never get done.” Okay. So we award the credits, the project doesn’t get done…and so we never actually release the credits to the developer. It’s not as if they get cash up front that they can choose to use on the development or just pocket and walk away with. These incentives are an “If and only if” situation, and it doesn’t hurt or cost the State a bit if a project doesn’t come to fruition.

  10. Ez Marsay
    Posted March 9, 2011 at 12:07 pm | Permalink

    Apparently to recall a Michigan governor, petition signatures totaling 25 percent of votes cast in his/her gubernatorial election are necessary.

    Does a Snyder recall stand a chance?

  11. TaterSalad
    Posted March 9, 2011 at 1:47 pm | Permalink

    Here is you typical Barack Obama supporter:

    http://noiri.blogspot.com/2011/02/how-obama-got-elected-by-these-voters.html

    ………and then we have this:

    http://il.youtube.com/watch?v=4zRbe3kv70A

    http://weaselzippers.us/2011/03/02/video-leftist-wisconsin-protesters-cant-explain-what-theyre-fighting-against/

    This is why the country is in the mess we are in. These are the typical people who support and vote for Democrats. Why do they vote this way. A simple answer of one word: “Entitlements”. The Party of Free!

    http://noiri.blogspot.com/2010/08/how-and-why-obama-got-elected-idiot.html

    Video – Your typical Union member which Barack Obama backs 100% is seen threatening a Tea Party member at a rally:
    http://weaselzippers.us/2011/03/08/ohio-union-goon-threatens-to-break-tea-partiers-neck/

  12. Andrew Jason Clock
    Posted March 9, 2011 at 4:58 pm | Permalink

    Tater, you always bring so much to the conversation. How do you do it? You are helping to lead America down the glory hole.

  13. K2
    Posted March 14, 2011 at 8:31 am | Permalink

    AA.com is finally getting around to covering this.

    http://annarbor.com/news/snyders-proposal-to-cut-historic-tax-credits-and-incentives-could-significantly-slow-ypsilantis-rede/?cmpid=NL_DH_topheadlines

  14. The 4 Browns
    Posted March 14, 2011 at 8:35 am | Permalink

    Wonder if Maurers regret sending $ to Snyder for Michigan campaign.

  15. Watching Laughing.
    Posted March 14, 2011 at 9:04 am | Permalink

    It would be interesting to get an interview will these real estate owners, Mauers, Beal etc and ask them if they voted for Snyder and what they think about it?

    Watching Laughing.

  16. The 4 Browns
    Posted March 14, 2011 at 9:09 am | Permalink

    I don’t mind so much who voted for who. It only gets interesting when we begin to see who collaborates with whom. In that sense, Maurers expressing chagrin that a friend is planning to take some cash from their bank account, is better than Maurers expressing no chagrin.

    We now should keep eyes peeled for cheerleaders of the Governor’s legislation, as they probably hope that by cheerleading, they’ll have a position in the New Order.

  17. Stu
    Posted March 14, 2011 at 10:38 am | Permalink

    Interesting demographic stats on UM students’ parents party affiliation:

    63% GOP
    32% DEM
    5% OTHER/NONE

  18. Stephen
    Posted March 14, 2011 at 12:54 pm | Permalink

    Stu, do you have a source for these numbers, or did you just make them up?

  19. kjc
    Posted March 14, 2011 at 12:59 pm | Permalink

    i’m ready for the thread about a massive protest against Snyder at the UofM commencement. This is a great opportunity.

  20. Stux
    Posted March 14, 2011 at 1:03 pm | Permalink

    Yes!

  21. Heidi
    Posted March 14, 2011 at 2:28 pm | Permalink

    Protest the commencement? Already in the works, tiny works..but it’s there:
    http://www.facebook.com/event.php?eid=140732422659192

  22. John Galt
    Posted March 14, 2011 at 2:57 pm | Permalink

    Like you, your protest will be weak and ineffective. The problem with you in the opposition is that you have no CEO to lead you. You cannot afford the tens of millions a year that a good leader costs, so you grope around in the dark, wasting your life away, complaining on silly little blogs. It takes a CEO to fight a CEO, just as the gods battled back on Mt. Olympus. What you need is a champion who can stand toe to toe with the almighty, muscle-covered Rick Snyder, without pissing himself. Mark Maynard is not that man. He is a scab on the toe of a dying rat.

  23. Marshall Law
    Posted March 14, 2011 at 3:35 pm | Permalink

    http://www.huffingtonpost.com/2011/03/14/michigan-set-to-enact-sweeping-financial-martial-law_n_835526.html

  24. Southland
    Posted July 14, 2011 at 9:09 am | Permalink

    Did you hear the Maurers won’t be buying buildings any more now that they can no longer get the state to help them?

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