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Wednesday, March 6,2013

Consequences

Fate of Niowave's tax break is unknown, but could have consequences for company, City Council and neighbors

by Sam Inglot and Andy Balaskovitz

This story was corrected on March 6 to say that Rina Risper ran for an At-Large City Council seat in 2009, not the 4th Ward. 

Three groups have been the chief characters in the Niowave pole barn saga: the Walnut Neighborhood Organization, the company itself and the Lansing City Council. A Council vote tentatively set for March 25 on granting the particle accelerator company a six-year, $550,000 tax break on new equipment holds consequences for all involved.

And you could argue that the city at-large has a stake in the outcome: How will Lansing be perceived as it balances neighborhood and business interests?

It’s been over eight months since Niowave built a 14,000-square-foot pole barn on the grounds of a vacant school north of downtown, sparking the quarrel with neighbors who say it’s an eyesore and that it’s hurting their property values.

But the story’s more complicated than that. When the company bought the former Walnut School in 2006 from the Lansing School District — and subsequently rehabbed that and 14 homes in the neighborhood — relations were good between residents and Niowave. The company employs more than 50 people at its headquarters at 1012 N. Walnut St., a mile north of the Capitol. Niowave pays nearly $40,000 a year in property taxes to the city for the 15 properties it owns. It wants to invest $5 million as part of its expansion, adding 25 new jobs with an average salary of $60,000. Economic development officials hail Niowave as exactly the kind of high-tech business Lansing needs within its borders to progress as a city. It’s not clear what Niowave will do if it’s denied the tax abatement, according to chief financial officer Mark Sinila.

Now all eyes turn to the Council, which is faced with a decision: Approve the tax abatement and risk political capital with an ever-growing base of residents throughout the city; or side with neighbors to deny the tax abatement, risking potential flight of the company from Lansing. A public hearing is set for Monday.

From the neighbors’ perspective, a vote for the tax break is a vote against not just Walnut residents, but neighborhoods throughout Lansing. 

“We’ve got letters of support from a dozen Lansing neighborhood organizations, and we’re all going to be watching this vote closely, not just the Walnut Neighborhood,” said Dale Schrader, a Walnut Neighborhood resident. “If they vote to give Niowave the incentives, that’s a vote against all of these neighborhoods. They’re basically saying, ‘Yes, we think this is right and we’ll do anything for businesses — 12 neighborhoods be damned.”

Council members are holding their cards close, saying they’re waiting till after the public hearing before taking an official position. President Carol Wood and Councilwomen A’Lynne Boles-Robinson, Kathie Dunbar, Tina Houghton and Jessica Yorko said they’re still undecided. Councilman Brian Jeffries — who was Council president when the fiasco started and now chairs the Development and Planning Committee — still has questions. Like: “Fa'ade improvements — what would the cost be? They (Niowave) don’t know.”

Yorko, as the 4th Ward representative who’s up for re-election this year, is in a tight spot. Like the neighbors, Yorko wants Niowave to bring forward a plan to fix the fa'ade, yet she declined to say whether she will vote against the tax abatement if it doesn’t. Niowave has proposed $100,000 worth of landscaping they say will help hide the building, which neighbors rejected. 

Neighbors aren’t blind to the fact that Yorko, Jeffries, Dunbar and Houghton are up for re-election this year. Walnut Neighborhood Organization President Rina Risper wrote to neighbors on Facebook Saturday: “I want to make it clear that any city council person who does not vote no to the tax abatement to Niowave, DOES NOT DESERVE OUR VOTE.”

Yorko says Risper is being “territorial” and rallying the neighborhood to be uncooperative for political gain. 

“I have offered my help with Niowave, but have been asked to ‘keep out’ by the WNO president,” Yorko wrote in an email. “I was barely allowed to speak at their November meeting because their President kept cutting me off when I would offer ideas and solutions … There is clearly a political agenda here to perpetuate this disagreement/problem.”

Risper denied the allegations, saying that Yorko has a tendency to “piggyback” on community events for her own political advantage. She believes the Niowave situation is another example of that. The feelings may be a carryover from the 2009 when they each ran for City Council. Risper ran for an At-Large seat and Yorko ran in the 4th Ward.

The Niowave saga started last year when the company pulled its original personal property tax exemption worth $230,000 as it agreed to work things out with the neighborhood. 

That never happened. Niowave says the neighborhood hasn’t been clear about what exactly it wants. Neighbors say the company has been unwilling to meet with them. 

Karl Dorshimer, director of economic development at Lansing Economic Area Partnership, said the tax abatement amount increased from $230,000 to $550,000 because Niowave decided to invest in additional equipment from the previous request.

At a Feb. 20 Development and Planning Committee meeting, the distance between Niowave and the neighbors was made abundantly clear. When Sinila was asked by Jeffries about the status of negotiations with the neighbors, Sinila surprised some in attendance, including Mary Elaine Kiener, a key Walnut resident who has largely led on the issue. 

“I don’t think the neighborhood itself can agree to what they want,” Sinila said. “And that’s what we’re waiting for an answer on.”

Kiener said she almost fell out of her chair when she heard that. Where has Sinila been for the past eight months, she wondered?

Looming over the Council’s vote is whether the company would choose to expand outside the city in the future or leave its headquarters in the Walnut Neighborhood.

“There will be a lot of options on the table,” Sinila said. When asked if that would mean a lot of options in Lansing or elsewhere, he said, “Everywhere.” 

Although Niowave has never “threatened” him with leaving, Lansing Mayor Virg Bernero said that doesn’t mean it couldn’t happen. He’s a supporter of Niowave and its tax break. 

“I’m concerned about the message it sends Niowave if it doesn’t pass,” Bernero said. “They’re a growing company. Their next move could take them out of that building. But the question is: Where will they go?”

Bob Trezise, president and CEO of Lansing Economic Area Partnership, said he hopes Niowave will keep Lansing in mind when they think about expanding. He says the company has enormous potential, calling it a “dream company” for Lansing. 

“If there’s a single company in the city of Lansing that has the highest rated future growth potential, it’s Niowave,” Trezise said. “We’re going to handle this issue and then we’re going to move on and hopefully handle a growth issue later on … We’ll do the best we can to make sure Niowave grows here in the area.”

Bernero, while understanding neighbors’ concerns, believes Niowave’s presence in the neighborhood has been a “net positive” and neighbors should look at the good things the company has done. Sinila shares the mayor’s attitude, pointing to the rehabbed houses it rents out and the refurbished Walnut School. 

Neighbors don’t deny Niowave’s good deeds. They also don’t think Niowave deserves a pass on the pole barn.

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