The implication is that the State Tax Commission has taken away one tool that communities have to enforce businesses to comply with the agreements made with the community.
Bob Trezise of LEAP drops a bombshell
This new information was presented just hours before the special City Council Development and Planning (D&P) committee meeting last evening t4/22/2015 at 7:00 p.m. that was dedicated to the Niowave issue.
Here is the information from Bob Tresize, who helped broker the initial agreement between Walnut neighbors and Niowave in an email dated 4/22/2015 2:46 p.m.:
Recently, the Lansing City Attorney’s Office was asked by Council President Houghton to examine the options that Lansing City Council has at its disposal in response to the written report about Niowave’s progress on their building. The Council has been exploring the possibility of revoking incentives related to the building, including the PA 328, a 100% personal property exemption. LEAP has recommended that Council not revoke this incentive.
The City Attorney now reports that the PA 328 law is silent on the issue of revocation.
The LEDC and LEAP’s interpretation of this silence has been and is that the incentive was and is revocable. All other incentives are revocable, so LEAP and, previously, the LEDC has been working under that same assumption for PA 328s. PA 328 agreements, along with revocation language, were routinely included in the city’s Universal Predevelopment Agreement for economic incentives. It is important to note, that these agreements all were reviewed and approved by a wide variety of city departments, as well as the State Tax Commission itself, which actually approves the incentive.
On Monday of this week, LEAP contacted the State Tax Commission for clarification of the PA 328 revocation issue. To our shock and disagreement, the State Tax Commission reports that, approximately two years ago, it reviewed a request for revocation by another community and decided, in that case, that it did not have the authority to revoke that particular PA 328. The city and LEAP were unaware of this position, because the State Tax Commission did not apparently make an overall policy decision. They simply noted that they do not have the authority to revoke and did not make an overall ruling. We do not recall any notifications or other statements about this from the State Tax Commission.
It is fair to say that, generally speaking, the economic development community and municipalities are not aware of this case or the precedent it appears to establish.
We strongly share your anticipated disappointment and anger by this turn of events. We strongly believe that all incentives, including PA 328s, should and can be revoked for good cause by a local community and the state. LEAP has recommended revocation of incentives, agreed to by the Lansing City Council, on several occasions, including incentive packages for OPRAs and PA 198s.
The issue could potentially be resolved at the state level. LEAP believes it is imperative that a local community have the choice to revoke an incentive. Though we would have disagreed with Council’s choice to revoke this particular incentive under this particular circumstance, it is nonetheless critical that a community have the right to make that choice of revocation if justified.
Bob Trezise, President and CEO
Council members not on the Development and Planning (D&P) Committee and were in attendance at the meeting last night could not speak due to the failure of the D&P chair, Tina Houghton, to provide proper notice of a public council meeting in accordance with the open meetings act.
Council member Jody Washington also pointed out a protocol error on the part of Houghton in this email from 4/13/2015: " I was not happy when I found out that Councilmember Houghton took it upon herself to negotiate an agreement [with Niowave]. She was out of line and that is not within her authority to do so."
Houghton was also scheduled to participate in the Current State radio program this morning, but was unable to be reached at the last moment.
WKAR Interviewer Reports Frustration
WKAR interviewer Mark Bashore, spoke with Dale Schrader of Walnut Neighborhood Organization about the Niowave issue.
Both Bob Trezise (LEAP CEO) and Jerry Hollister (Niowave COO) declined t participate in the interview. Mark Bashore expressed surprise and frustration with the limited amount of information being provided by Niowave.
Council member Carol Wood determined to pursue options:
This was posted on her Facebook page today 4/23/2015:
To the Walnut Neighborhood Organization I am very upset over the revelations at last night’s Development & Planning Committee meeting. As of late it seems I doing a great deal of apologizing on behalf of Council to the community, but here we go again. Both Councilmember Yorko and I requested that this meeting be posted in a way that would allow you to hear any comments from any Council Members present with regards to Niowave but the posting of the meeting was done in a manner that did not allowed us the ability to speak to you during the meeting. Due to that I am including my concerns and recommendations below, because I do believe we as a Council DO HAVE OPTIONS.
I have a call into the State Tax Commission and will be requesting the informal opinion that was the bases for the City Attorney’s decision and will share that with you as soon as I have that.
I also believe that we as a Council should pass a resolution to revoke PA 328 Personal Property Tax Exemption based on the contract agreement between the City and Niowave and have the State determine whether it is valid or not.
City Council during the approval of the PA 328 Personal Property Tax abatement were told repeatedly by LEAP and the City Attorney’s office that we had the ability to rescind the abatement if Niowave fail to comply with the agreement. Based on this information Council approved the abatement and since this information now appears to false the approval of the resolution was based on false information and resolution should be declared not binding which would mean Niowave DOES NOT have a valid resolution for the State to issue the abatement.
LEAP is paid by the City of Lansing under a contract and has responsible to bear in this situation as well. Since their job is to be current on all matters dealing with economic development and in the memo from Mr. Trezise he states “approximately two years ago” the State made a decision there is liability on behalf of LEAP and they should be require to paid the lost revenue back to the City because of the erroneous information given to Council.