City Council to Decide on Trowbridge Developer’s Request to Change Tax Plan

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Monday, October 6, 2014, 8:51 am
By: 
Alice Dreger

On Tuesday night (October 7), East Lansing City Council is expected to make the final ruling on a request from the redeveloper of Trowbridge Plaza, the former location of Goodrich Shoprite, to give the developer hundreds of thousands of dollars more than previously planned under Tax Increment Financing (TIF). The developer, Kevin McGraw of River Caddis, has told City Council that if they don’t revise the TIF plan to give him more of the money that would otherwise go into the coffers of the City of East Lansing and other local public bodies, his profit margin will be much smaller than he’d planned. (See our report on McGraw’s appeal at Council’s last meeting.)

As Chris Root previously reported for ELi, more recently McGraw told the Brownfield Redevelopment Authority that the project will be “way under water” if Council does not give what he is asking. The Brownfield Redevelopment Authority approved his request, with the only “no” vote coming from City Manager George Lahanas. Lahanas has been frequently speaking at public meetings about the budgetary problems the city is facing.

TIF is a tax scheme whereby incremental increases in taxes obtained from a development over a number of years can be used to reimburse a developer for approved expenses occurred in relation to that development. TIF is used in practice as an incentive to build projects that may benefit a community and ultimately produce more tax revenue. TIF plans are ordinarily completed before a development begins.

Before River Caddis began redevelopment of the Trowbridge Plaza, Council approved a request from McGraw that will give his company about $1.4 million of TIF for approved expenses. Now McGraw is seeking a revised TIF plan that could give his company a total of as much as $2.6 million over 16 years from funds that would otherwise go to pay for such things as public services. The new plan would therefore reduce the public “take” by as much as $1.2 million more. McGraw has said a tax miscalcuation and unexpected construction expenses means the development will not reap the profits originally expected.

City Council meets in the courtroom on the second floor of City Hall and begins at 7 pm. Citizens wishing to make public comments should arrive early because public comment comes at the beginning of the session.

 

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