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Monday, March 18,2013

Kids in the Hall

City acquires parkland; some airport-area businesses voice concern over proposed tax sharing agreements

by Andy Balaskovitz
Tuesday, Oct. 18 — The Lansing City Council voted unanimously Monday night to acquire 28.47 acres of parkland in west Lansing, and it’ll come nearly free of charge.

While the property, commonly known as “Hunter’s Ridge,” along the Grand River near the Holmes and Waverly roads intersection costs about $270,000, 75 percent of that will be covered under a Michigan Natural Resources Trust Fund grant from the state. Capital National Bank Corp., which owns the property, has agreed to donate the rest of the matching funds, according to the resolution approved Monday night.

At-Large Councilman Brian Jeffries said that the city will likely end up paying between $5,000 and $8,000 in “some closing costs” for the property.

“The property is in a very natural state,” Jeffries said. “It’s intended to stay that way for the short term. Ongoing maintenance is going to be very minimal.”

In other news, most of the Council’s business Monday night was dedicated to discussing two proposed 425 tax sharing agreements between the city and DeWitt Township. The agreements involve roughly 1,800 acres of land around the Capital Regional International Airport. The two jurisdictions would split tax revenues from the land, as some businesses would be charged Lansing’s millage rate and others would be charged under DeWitt Township’s lower rate. All would be subject to the city’s personal and corporate income tax rate. The city’s corporate income tax rate is 1 percent. The personal income tax rate is 1 percent for city residents and .5 percent for non-city residents.

The Council held public hearings on the proposals at Mondays’ meeting and also discussed them further during Committee of the Whole.

Two men representing businesses at the airport said they see the proposals as tax increases because of the city’s income taxes. George Carr, a lobbyist and attorney who rents out hangar space at the airport, said the proposed 425 agreements are “fine unless you have property at the airport.” Because the proposals would subject him to the city's 1 percent personal and corporate income tax rate, Carr said it’s “simply a tax increase.”

Carr — who said he owns businesses in Lansing and East Lansing — is also concerned that the proposals do not say whether 1 percent of his total sales will be taxed or just his sales in Lansing. Bob Trezise, president and CEO of the Lansing Economic Development Corp., said an answer to that question would be ready by Monday’s meeting before Council casts a final vote on the proposals.

Mike Borta, manager of QoE Consulting, also said he’s concerned that his business and its six employees will be subject to the city’s income tax rates.

“This could conceivably in a worst-case scenario cost me $10,000,” Borta said. “If that’s the case, I would seriously look at moving off the airport to some other location to avoid that kind of punitive income tax.” QoE, an engineering consulting firm with offices in Lansing and Detroit, has offices in the second floor of the main terminal building at Capital Regional International Airport.

During Committee of the Whole, Borta went on to say: “This appears very blatantly as a revenue grab by the city and the township.”

Chris Thelen, an area manager for Consumers Energy, wanted language added to the proposals that would allow electric utilities to compete for any new businesses that might come after the agreements. As they’re written, the Lansing Board of Water & Light would supply power to any new businesses. Existing businesses, if they’re served by Consumers, would be able to stay with Consumers. Thelen said it is unfair that BWL would automatically get the new customers.

“Our right to compete for new business is not protected,” Thelen said during public comment. “It’s not right local businesses are treated this way. I’m not asking for special treatment or exclusivity. I’m simply asking for the right to compete for new business.”

Trezise, of the EDC, said it’s the city’s policy that the BWL provides power to the city. “If it’s in the city of Lansing, electricity will be provided by our utility. (The BWL) will not interfere or try to steal any business currently out there using Consumers for energy. This has nothing to do with our friends at Consumers. Policy-wise, if it’s in the city of Lansing, power will be provided by the Board of Water & Light.”

As for the businesses that would fall under the city’s corporate and personal income tax jurisdiction if the proposals are approved, Trezise said: “We are raising taxes slightly on those existing businesses. Instead of raising taxes, it’s more of a tax fairness issue.”

Trezise later said: “Fundamentally, I think it’s odd that everyone in Ingham County, the lion’s share being in the city of Lansing, is taxed to support the airport and the businesses at the airport are not. I don’t know how to be more simple than that.”

The Committee of the Whole voted unanimously to move both proposals out of the committee and to a final vote by the Council at Monday’s meeting.
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