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I am always up for tax breaks. Only, isn't this one of those that democrats
are always complaining about? This is only for the rich.
Here's a look at taxes for a resident of an incentive zone
who earns $50,000 a year and lives in a $150,000 home: Well Ted, It's not
really. See making 50,000 a year is not rich. OK, I'll buy that. However, when
you look at the make up of Flint. with one quarter of Flint's population living
below the poverty level. and the Median income below 33, 000 a year. Most people
living in Flint are just like the family mentioned in the article. When their
kids get school age. They are moving out. They can afford to. I'm pretty sure if
I made 50,000 a year I wouldn't be living here in Flint either!
I recently discovered, That I could afford to move out now. If my house could
sell. But a short drive around the neighborhood revels that in my neighborhood
alone. Well over a quarter of the houses are for sale.
I guess making 33,000 a year I could afford to live in the suburbs. How?
150,000 dollar house would eat up most of my income. TRUE. But the difference in
insurance costs for my house and car would be so drastically lower. It would
more than offset the difference. This is why I am so hot on Crime in Flint.
What were the reasons this family gave for wanting to move out of Flint.
Crime! Plain and simple. The Mayor continues to blame the former administrations
for problems he continually creates. "Don
Williamson, mayor since the end of the takeover, blames his predecessors. He
said the city has taken action over some failed economic projects, in some cases
filing suits against developers, but hasn't had time to resolve all of them."
Yes, he is filing suits. While this sounds like a good idea. How about
filing them against those that are not following the rules. Oops, can't do that.
It's his administration. What? Don's administration isn't following the rules?
That is correct. this is what lead to the City loosing 1.4 million in HUD funds.
That the new city Council will not finish looking into. The Administration is
currently suing Greater Eastside Community Association because of the
Administrations screw ups. And no one on the council. Including that wards
council person is saying a thing about this. They didn't say anything when the
Mayor announced that a 12 percent rise in crime was a Major Reduction, and they
haven't said anything about the loss of funds either.
Twilight
zones
Benefits of tax breaks, other incentives in distressed neighborhoods hard
to pinpoint
FLINT
THE FLINT JOURNAL FIRST EDITION
Sunday, April 09, 2006
By Christofer Machniak
cmachniak@flintjournal.com • 810.766.6304
FLINT - The mayor calls them a disaster. At least one beneficiary now says
he wants out. And in 12 neighborhoods, no one has even used potentially
lucrative tax breaks since they first were made available eight years ago.
But have special economic zones in depressed areas been a bad idea, or
just badly managed?
Once seen as the key to economic redevelopment, the zones were created in
the 1990s to spur investment in the area's most economically distressed
neighborhoods.
The benefits range from money for business loans and neighborhood
revitalization to tax breaks for businesses and homeowners, including full
refunds on most state and local taxes for several years.
Years later, the state Renaissance Zone, the state Neighborhood Enterprise
Zone, the federal Renewal Community and the federal home ownership zone
have failed - in the eyes of many - to live up to expectations.
The tax incentives enticed Leon Lucas and his wife to become first-time
home buyers in Smith Village, a struggling neighborhood north of downtown
where three of the four zones overlap.
But after more than two years of hearing sirens and gunshots while
watching no new homes being built and some sitting empty, Lucas is ready
to give up the thousands of dollars in tax breaks and even repay $30,000
the family received in down-payment assistance.
Lucas, 35, says he likes his neighbors and his relatively new and
moderately priced three-bedroom house, but is worried about his 3-year-old
son and wants to move before he is of school age.
"There's prostitutes walking around and people selling drugs in an open
nature," said Lucas, who works for the U.S. Postal Service and recently
became a real estate agent. "I just haven't seen enough progress."
Zones have 'limped along'
Critics who favor the zones say they have been grossly underused and
poorly marketed.
"The zones could be much more successful," said former Flint Councilman
Mark A. Horrigan.
"Other cities have done a better job utilizing the tools of the
legislation. Flint has kind of limped along."
But a recent Associated Press analysis of the country's 82 largest
municipalities found that most inner cities targeted by the federal
government's primary urban economic programs lost jobs from 1995-2003.
Zone promoters acknowledge problems, but they blame political infighting
and city financial problems that resulted in a state takeover from
2002-04.
Nancy Jurkiewicz Rich, the director of the Flint Area Enterprise
Community, the nonprofit agency that oversees efforts in the Renewal
Community, said she had to lay off all her staff after then-Mayor Woodrow
Stanley was recalled in 2002. She said she only recently started to get
more support, including funds for a loan officer and $80,000 for
marketing.
"Until funding became available, we were really a one-person show,"
Jurkiewicz Rich said. "That's why we're doing a larger marketing effort
(now)."
Don Williamson, mayor since the end of the takeover, blames his
predecessors. He said the city has taken action over some failed economic
projects, in some cases filing suits against developers, but hasn't had
time to resolve all of them.
"Since I've been here, all I've been doing is catch up," he said. "We are
working rapidly to stamp out the previous administration's horrible
judgments and mistakes. I can't cure 20 years of problems in a short
time."
Williamson does tout the zones' potential benefits, talking up the Renewal
Community during a recent news conference to announce an increase in the
zone's size.
The city, meantime, tapped Jurkiewicz Rich in February to oversee and sort
out problems in the city's major federal programs, such as the home
ownership zone. She said the city is putting together a new plan for Smith
Village.
Jurkiewicz Rich, who has been paid $35,000-$80,000 a year on a fluctuating
contractual basis for running the Renewal Community, said she's taken on
the new responsibility at no pay. She gets no benefits and says she pays
all expenses out of pocket.
Zones of confusion
For Bernard and Linda Boose, the trouble began in 2002, when they moved
into their new home in a state Renaissance Zone on the city's northeast
side - and found out they owed back taxes from when they first put down a
deposit.
No one had explained they had to apply for the exemption from state and
local taxes every year, or that once back taxes were owed, they couldn't
apply for an exemption.
The problems ended up costing them more than $8,000 in penalties and
interest and took years to resolve. There were constant problems from
mortgage company employees and city and state officials who didn't
understand the Renaissance Zone.
"It's been a joke," said Bernard Boose, 54, a retired welder now on
disability.
Making matters worse, the 120-home development - Windcliff Village -
stalled after 10 homes were built.
"People still don't know (our) subdivision is over there," said Linda
Boose, 51. "You just don't get any response because it was one of (Mayor)
Stanley's projects. No one took any interest."
Businesses also have had problems getting timely or accurate information
about tax breaks.
John Orin, owner of Roma's Pizzeria within the Renewal Community in Mt.
Morris Township, said he didn't get a response for three years after he
tried contacting the Flint Area Enterprise Community.
He said when he was contacted, he was given information about the tax
breaks his accountant later said was wrong. Still, Orin said the tax
breaks he got allowed him to avoid layoffs and build a new parking lot.
"It softened the blow of doing business in an area (where) all we're
getting is bad news," said Orin, who also is supervisor of Shiawassee
County's Caledonia Township. "It's given me some tools to fight with."
Phantom zones
No one has yet utilized the city's 12 Neighborhood Enterprise Zones.
In 1998, the city created 3.12 square miles of zones where residents who
rehab their homes or developers who build new ones could qualify for
significantly lower property taxes for several years.
But Bill Hammond, a co-leader of the newly formed neighborhood association
that covers one of the zones, said the city has never promoted them.
Hammond said he never realized they existed until The Flint Journal
contacted him. |
"I'd like to see the city market it," said
Hammond of the Metawaneenee Hills Neighborhood Association. "Someone has
to bring some of this stuff to light."
The zones could potentially become even more valuable to residents
since Gov. Jennifer Granholm signed changes to the law in January that
will make some existing homes eligible for the tax abatement. State
officials said the city must redesignate zones to be eligible.
Some progress made
In the case of state Renaissance Zones, the state says since 1997, Flint
has reported 22 projects that have generated 245 jobs and $18.2 million in
investment. But there's a knowledge gap: The city didn't report statistics
for five of those years.
On the flip side, the city lost nearly $1 million in property taxes in
2005 and about $680,000 in 2004, according to City Assessor William E.
Fowler. The city also estimates losing about $65,000 a year in income
taxes.
Funding the Enterprise Community also has cost the city between $80,000
and $200,000 in federal block grant dollars in recent years.
The nonprofit Enterprise Community - which manages the Renewal Community -
is slated to get $240,000 for the 2006-07 year. Jurkiewicz Rich said the
money will help market the tax benefits of not only the Renewal Community
but the other zones that overlap.
There's a similar knowledge gap for the Renewal Community. Jurkiewicz Rich
said the IRS has been unable to say how many businesses in the zone have
used the tax breaks.
Such lack of data will make it hard to determine if the community reaches
its goals by 2009 of bringing in $300 million in investments, helping 500
businesses use $100 million in tax incentives and creating or retaining
1,750 jobs.
Still, Jurkiewicz Rich said the Enterprise Community is well on its way.
She said it's been a key player behind the scenes, including in the
formation of the Genesee County Land Bank, a key player in the zone's
neighborhood redevelopment.
She said many institutions and businesses have used the federal
designation to get grants or tax credits, noting development such as the
Rowe Building downtown, a $12.5-million project that plans office space,
lofts and restaurants. She added that the Enterprise Community board
approved The Flint Journal's request for $8.5 million in tax breaks for
its recent $30-million press building project.
"It's critical," she said. "Every dollar we can save here in Flint is
critical to retaining our existing business and helps recruit new
business. " It is well worth it."
Jurkiewicz Rich said succeeding now is crucial if the area wants to keep
the designation, which is reviewed every year.
"This designation is not a given. We have to earn it," she said. "Many
cities are standing in line and want to have a Renewal Community."
***
QUICK TAKE
In the zones
Here's a look at taxes for a resident of an incentive zone who earns
$50,000 a year and lives in a $150,000 home:
City and state taxes in a city Renaissance Zone
If you file for tax benefits: $52
If you don't file: $5,400
Property taxes in a city Neighborhood Enterprise Zone
If you file for the benefits: $1,263
If you don't file: $2,923
Sources: Flint Journal files and research, city of Flint
Making sense of zones The four incentive zones meant to help revitalized
areas in and around Flint:
Flint's state Renaissance Zone
DESCRIPTION: ELEVEN SEPARATE SUBZONES ACROSS THE CITY THAT INCLUDE
UNIVERSITY PARK, THE FORMER BUICK CITY SITE AND LARGE PARTS OF DOWNTOWN.
BENEFITS: LOCAL AND STATE PERSONAL INCOME TAXES, THE SINGLE BUSINESS TAX,
STATE AND LOCAL SCHOOL OPERATING TAXES, LOCAL PROPERTY AND UTILITY TAXES
ARE WAVED FOR UP TO 15 YEARS. THE BREAKS ARE PHASED OUT IN 25 PERCENT
INCREMENTS IN THE LAST THREE YEARS. BENEFITS AVAILABLE 1997-2012.
STATUS: SINCE 1997, THE CITY HAS REPORTED 22 PROJECTS THAT HAVE GENERATED
245 JOBS AND $18.2 MILLION IN INVESTMENT, BUT STATISTICS ARE INCOMPLETE.
CONTACT: (810) 766-7255.
Flint Area Renewal Community
DESCRIPTION: 13.5 SQUARE MILES IN FLINT AND MT. MORRIS TOWNSHIP. THE FLINT
AREA ENTERPRISE COMMUNITY WAS CREATED BY THE CITY AND TOWNSHIP IN 1997 TO
OVERSEE EFFORTS IN THE ZONE.
BENEFITS: SEVERAL FEDERAL TAX BREAKS FOR BUSINESSES, GRANT OPPORTUNITIES
FOR INSTITUTIONS AND NONPROFIT AGENCIES THAT SERVE THE ZONE, REVOLVING
LOAN FUND FOR BUSINESSES (ON HOLD UNTIL AN AUDIT IS COMPLETE).
GOAL: BRING IN $300 MILLION IN INVESTMENTS, HELP 500 BUSINESSES USE $100
MILLION IN TAX INCENTIVES AND CREATE OR RETAIN 1,750 JOBS BY 2009.
CONTACT: (810) 341-1499
Flint's state Neighborhood Enterprise Zone
DESCRIPTION: TWELVE SEPARATE SUBZONES ACROSS FLINT, TOTALING 3.12 SQUARE
MILES
BENEFITS: RESIDENTS CAN QUALIFY TO PAY A SIGNIFICANTLY LOWER TAX RATE ON
NEW BUILDINGS FOR 6-12 YEARS OR MORE. FOR REHABILITATED HOMES, TAXABLE
VALUE IS FROZEN.
STATUS: NO ONE HAS YET FILED TO RECEIVE TAX BENEFITS, ALTHOUGH THE LAW HAS
BEEN RECENTLY CHANGED TO ALLOW EXISTING HOMEOWNERS TO QUALIFY.
CONTACT: (810) 766-7255.
Federal home ownership zone
DESCRIPTION: ABOUT 200 ACRES INCLUDING UNIVERSITY PARK ESTATES AND SMITH
VILLAGE DEVELOPMENTS NORTH OF DOWNTOWN FLINT
GRANT: $2 MILLION IN SEED MONEY FOR DEVELOPMENT
GOAL: 299 NEW SINGLE-FAMILY HOMES AND 50 REHABILITATED HOMES
STATUS: UNIVERSITY PARK ESTATES IS NEARLY
COMPLETE WITH MORE THAN 100 HOMES BUILT, BUT ONLY HANDFUL OF HOMES HAVE
BEEN BUILT IN SMITH VILLAGE.
CONTACT: (810) 766-7436.
Sources: Flint Journal files and research, city of Flint |
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