Cutting off brownfield and historic preservation tax incentives could halt development progress

Gov. Snyder's proposed state budget ruthlessly eliminates state tax incentives for a number of industries and projects in favor of lower overall business taxes. While the incentives for filmmaking have gotten the most attention, the elimination of state tax incentives for the redevelopment of brownfield sites and historic preservation may be the most crucial issue for Detroit.

The brownfield credits apply to "brownfield sites," which the Michigan Economic Development Corp. loosely defines as "properties that are either contaminated, blighted or functionally obsolete." These incentives, along with others for the preservation of historic properties, have been responsible for many high-profile redevelopment projects, including the Book-Cadillac and Fort Shelby. As I wrote earlier in a post about redevelopment around Grand Circus Park, the redevelopment of the Broderick Tower was literally made possible by state tax credits.

I understand the need for a balanced budget, but it seems that many of Snyder's proposals would set Detroit and Michigan backwards, leaving us to rely entirely on the hope that his "good climate for business" idea is going to pan out. Nancy Kaffer and Daniel Duggan of Crain's Detroit write that the elimination of these tax credits "could slow or stop the flow of redevelopment projects in Detroit," and the article quotes the vice president of board administration of the Detroit Economic Growth Corp., who says that "it's hard to think of a big project that hasn't used the credits."

With all the progress that's been made recently on these projects, the idea of cutting off the state tax incentives seems very misguided.