City Council considers joining Ann Arbor SmartZone group
At the Monday, June 2, Tecumseh City Council meeting, the council unanimously passed a resolution to consider becoming part of the Ann Arbor SPARK SmartZone. Lenawee Now, formerly Lenawee Economic Development Corporation, invited Tecumseh and Adrian to join the Ann Arbor SmartZone. No council members were absent from the meeting.
“Ultimately it is another economic development tool that we can have available to us,” said City Manager Kevin Welch. “In order to even be included in the development we’re being asked to adopt a resolution of support.”
If council approves joining the Ann Arbor SmartZone at a later meeting, Tecumseh would be able to expand the Local Development Finance Act (LDFA) district. Properties that Welch said could be considered for the LDFA expansion include the Tecumseh Business and Technology Campus, the Tecumseh Industrial Park and the former Tecumseh Products property.
A SmartZone is a state-approved property that allows a portion of the increased tax revenue, which happens when investment occurs and there is an increase in the value of the property, to be returned to the local government. That money can then be used to bring high-tech companies into the community.
In 2001, the Michigan Economic Development Corp. (MEDC) created 15 separate SmartZones throughout the state, including one in Ann Arbor. Originally, the SmartZones were only supposed to operate for 15 years. However, SmartZones can continue if they can establish a SmartZone in an adjoining community.
SmartZones are tax increment financing (TIF) districts, similar to the Downtown Development Authority (DDA) and the Brownfield Redevelopment Authority (BRA). The captured tax is then used for specific projects depending on the TIF district.
For SmartZones, the captured tax from the increased tax revenue is derived from the portion of school taxes from the property. However, the state has to replace those lost funds, having no effect on school aid.
The passing of the resolution of support does not commit the city to the SmartZone project, a concern made by council member Jack Baker.
“If we accept this resolution do you think it would be excepted of us to join this consortium?” asked Baker.
“No,” said Welch. “We’ve pointed out to them that there are a couple things that are a concern to us with this. They don’t need us to go forward.”
If Tecumseh joined the SmartZone, a SmartZone board would be created that would dictate how the captured tax funds are used.
“We’d be concerned that we have adequate control over those decisions and that the money is used here in Tecumseh,” said Welch. “Those kind of things have not been worked out.”
“One concern that I would have is that SPARK is a big organization. I would just want to make sure our voices and concerns were heard,” said council member Ron Wimple.
“If the membership of that board is not at least 50 percent Tecumseh, I would recommend that we not do it,” added Welch. “We’re basically saying that we are willing to discuss it at this point in time. Unfortunately, we don’t have all the answers to this. There are a lot of questions that we had that Ann Arbor SPARK and Lenawee Now could not answer at this point in time.”
The council has until September 1 to decide if the city will join the Ann Arbor SPARK SmartZone.
“This is our only opportunity to be a part of this,” added Welch.
In other business, council:
• Approved a public hearing for an Industrial Facilities Exemption Certificate filed by Rare Tool, located at 300 E. Russell Rd. The hearing will be on Monday, June 16, at 7:35 p.m. during the regular session of the Tecumseh City Council meeting.
“We’ve done many of these in the past. This is the standard procedure for city council,” Welch said.
• Approved the request for the 11th Annual Great Lakes Truck Show “Parade of Light” event on Sunday, June 21. Approximately 50 semi-trucks with decorative lights will start in Dundee at dusk and travel through Tecumseh before driving back to Dundee.
“I really think this is special,” said Tecumseh Mayor Richard Johnson.
• Adjourned into closed session for discussion of an attorney-client privilege communication.