Posted Apr 23, 2024, 9:19 PM
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Detroiter4life
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Join Date: Jul 2001
Location: Back home in Georgia!
Posts: 4,115
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$318M in tax credits sought for ‘transformational’ projects. Here’s where the money comes from.
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The private economic development group leading the push to build a 12,000-seat amphitheater, downtown soccer stadium and two, mixed-use housing towers is requesting $318 million in public subsidies to help finance the projects.
The request, from Grand Action 2.0, is outlined in a city memo, and is scheduled to be considered Wednesday by the Grand Rapids Brownfield Redevelopment Authority. It would then head to the Grand Rapids City Commission for approval.
Here’s a look at what’s included in the request, as well as the housing and inclusion plan for the developments:
Transformational Brownfield
The vast majority of the $318 million subsidy comes from the Transformational Brownfield program.
The program, designed to help spur large-scale projects that would have a “transformational” impact on the local economy, reimburses a developer for a host of construction costs using state and local tax revenue generated because of the development.
That includes property taxes, and the state withholding and income taxes of people who live and work at a development. It also includes income taxes paid by a project’s construction workers.
In Grand Rapids, only projects valued at $100 million or more qualify for the Transformational Brownfield program. The four projects being planned by Grand Action 2.0 — the amphitheater, soccer stadium and two housing towers — would generate an estimated $748 million investment.
The reimbursements are only made if the developments occur and generate the tax revenue needed to reimburse the developer, the city says. There is no up-front check cut to the developer.
In addition to the Transformational Brownfield program, the projects are also seeking a $30.8 million tax cut through the city’s Neighborhood Enterprise Zone exemption. Those funds, which are part of the overall $318 million subsidy, would be received over a 15-year period.
How much would go to each project?
Acrisure Amphitheater: $17.2 million between 2024 and 2044
Ampitheater Tower: $196.6 million between 2025 and 2056.
Soccer Stadium: $10.8 million between 2024 and 2044.
Soccer Stadium Tower: $93.4 million between 2026 and 2057.
The amount of taxes that would be reimbursed for the amphitheater tower and the soccer stadium tower are significantly higher than the reimbursement for the venues.
That’s because the developers of those projects can capture the state income taxes of people who live and work at the developments.
At the amphitheater tower, for instance, that amounts to $101.2 million of the $196.7 million subsidy.
Project details
Acrisure Amphitheater: Grand Action is leading development of a 12,000-capacity venue at 201 Market Ave. SW. The venue, expected to open in 2026, would be owned and operated by the Grand Rapids-Kent County Convention/Arena Authority (CAA). The venue is expected to cost $186 million.
Amphitheater Residential Tower: A 21-story, mixed-use building (six floors of parking and 15-floors of residential) with 475 apartments. The tower would be built adjacent to the amphitheater, and it would cost an estimated $219 million. A private developer would lead this project. At this point, a private developer has not been selected, the city said. Grand Action says it would like the tower to be open by fall 2027.
Soccer Stadium: Grand Action is leading development of an 8,500-seat soccer stadium that would be built next to the David D. Hunting YMCA near Pearl Street and Mt. Vernon Avenue NW. The cost of the stadium, which Grand Action wants to complete by 2026, is $172 million. The venue would be owned and operated by the CAA.
Soccer Stadium Tower: The Grand Rapids Downtown Development Authority will oversee this project, which would be done in conjunction with a private developer. The 18-story towner would include retail, office and residential uses, as well as a 350-space parking garage. The building would include 260 apartments on the top nine floors of the building, with the lower nine-floors comprised of office and retail space. The project is still conceptual, but officials hope it’s open by spring 2028.
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https://www.mlive.com/news/grand-rap...omes-from.html
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