By Meg Peters
Review Staff Writer
With the sight of new developments in the distance, Orion Township is interested in establishing a program that would capture the taxable value increases of future investments along Brown Rd. and Baldwin Rd. to be spent back into the corridors.
Board members discussed the Corridor Improvement Act (CIA), established in 2005 by Governor Jennifer Granholm, at a special workshop meeting Monday night prior to the board meeting. The CIA program was originally enacted to reverse the deterioration of existing business districts and instead promote economic development in targeted areas.
Township-hired marketing consultants Strategic Marketing Systems (SCS) presented information on the program which would capture increases in the tax base before they are dispersed to local tax entities.
‘We’re really close to announcing some new business partners that will be coming to town, so it’s a way for us to keep some of these tax dollars in the corridor for road improvements and beautification,? Supervisor Chris Barnett said. ?
Further action for a CIA in Orion Township will be taken after the board is presented with more information.
The main purpose of Orion’s CIA would be to collect tax increases provided by future business investments in the Brown Rd. and Baldwin Rd. business district in order to sustain and beautify the surrounding infrastructure. ?
Development plans for captured funds would go to two main projects: widening Brown Rd. to prepare for future developments in the Brown Road Innovation Zone, and to fund and beautify the future Baldwin Rd. boulevard.
The closest enacted CIA is along Sashabaw Rd. in Independence Township, which was approved for 15 years starting in 2006 with the goal of attaining $4 million in captured tax increases by 2021.
How it works
The CIA functions in a similar way to a Downtown Development Authority (DDA), such as the Lake Orion DDA, but with a few more powers and unique criteria.
Firstly, a board would be established, consisting of members appointed by Barnett and the township trustees. The majority of the five to nine members would have own or have a business interest within the development area, and at least one member would be a resident within a half mile of the area.
From there, the CIA board would create a development plan to fund said projects, which is ultimately approved by the township board of trustees.
The most commanding tool the CIA has is to utilize tax increment financing (TIF) in order to capture any new tax revenues from real and personal property in the established corridor. Instead of the increases being disbursed according to the local taxing authorities, all revenues beyond what was established in the CIA’s base year would be set aside for the CIA’s use.
Certain entities would be excluded from the program and continue capturing the full amount, including the intermediate school district, the zoo authority and the art institute. All other entities have 60 days to opt out of the CIA, however, the township predicts to capture about ten to 12 mills if approved.
Eligible tax entities who agree to the program would continue to collect taxes based on rates set during the base year. A full breakdown of the education, township and county millages is available at’http://oriontownship.org/Government/Departments/TreasurerTax.aspx.
‘Right now this is a great time to set the base because it’s not going to hurt anybody currently because there’s nothing there (in the Brown Rd. business district), and there’s a great opportunity to capture on all the investments happening in this district,? Barnett said.
Some trustees disagreed.
‘If I were one of the taxing units, I wouldn’t be interested in this agreement at all,? Trustee John Steimel said. ‘We were tight as it was with the police and fire millage, and now you want to take from it, I’m not so sure of that.?
Township Attorney Dan Kelly clarified.
‘You’re diverting funds for the general fund for a specific purpose,? Kelly said. ‘Based on our legal review of it, it’s certainly something we can do and it meets all of the criteria.?
Unlike DDAs, the township would have more control over the CIA with the power to approve the development plan and the TIF plan.
‘The key ingredient is the purpose of the CIA, which is to spark the development of this area in a consistent manner,? Kelly said.
Without this kind of incentive, and schedule to maintain surrounding infrastructure, Barnett believes securing future, quality developments will be more tasking.
‘This is a selling tool for us,? he said. ‘The one thing I’ve heard over and over from applicants is the concern with the traffic on Brown Rd., and’I can guarantee that improvements won’t be made if we don’t do something like this.?
The first step the township must take is to establish a resolution including the development and TIF plan and discussed at a future board meeting. Next, a public hearing will be set. ?