LDFA OK’d, moves ahead for Adrian, Tecumseh

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The creation of a SmartZone Local Development Finance Authority (LDFA) for Tecumseh and Adrian has been a race against other municipalities in becoming a satellite zone to the one already established in Ann Arbor and Ypsilanti.

On Thursday, the Ann Arbor/Ypsilanti SmartZone (AYSZ) LDFA met to discuss with whom they would be choosing to accept as their satellite district. Brighton also submitted documentation along with Tecumseh and Adrian.

A SmartZone LDFA operates by capturing the incremental tax revenue in local taxes along with the six percent school tax. Money captured from the incremental tax revenue can only be used for public right-of-way projects that directly benefit the business in that district while collected school tax can only be used to entice new companies to the area with training and support programs.

All revenue captured in Tecumseh will be spent in Tecumseh, unless usage outside the city is voted upon. The same goes for revenue captured in Adrian.

What set the Tecumseh/Adrian SmartZone (TASZ) apart from Brighton was its readiness and complimentary offerings to what AYSZ was accomplishing. The AYSZ passed a resolution to accept the TASZ as its satellite district.

Now, the AYSZ has to go to their respective city councils for approval of adding the TASZ as the satellite district before seeking approval from the Michigan Economic Development Corporation (MEDC).

The AYSZ did raise concern that after the New Year, those at the MEDC may interpret the rules governing SmartZones in the state differently. The AYSZ praised Tecumseh and Adrian for being ready, just one criterion Ann Arbor/Ypsilanti used to determine which SmartZone to go with.

The other criteria were:

• How much money was placed into each program?

• Which was the more strategic choice?

• Which would be most attractive to the state?

• Who had a better history of innovation?

Adrian College made an in-kind donation of $200,000 for the TASZ LDFA’s first three years of operation in the form of incubator space, business support services and salary for the incubator director. Another factor was how much money would be generated over the 15-year lifespan of the TASZ LDFA.

For Adrian and Tecumseh, it is estimated that at least $80 million of private real property investment would generate approximately $7.8 million of funding over those 15 years. Brighton estimated $6.5 million in funding over the same period.

Next, the AYSZ LDFA looked at which proposed satellite would be complimentary to its own current offerings. Brighton offers much of what Ann Arbor and Ypsilanti already does. Adrian and Tecumseh offer a focus on biotechnology, chemical engineering and agriculture — one factor the State of Michigan has great interest in, according to Carrie Leahy, the AYSZ Chair.

“It compliments to our point,” said Skip Simms of Ann Arbor SPARK, as he discussed the merits of Lenawee County.

Because of the focus on agriculture and the TASZ’s readiness, the AnnArbor/Ypsilanti LDFA felt Adrian and Tecumseh’s SmartZone offering would appear more attractive to the state.

While Brighton had more startups than Adrian and Tecumseh, Adrian College’s incubator drew praise, as it was open to anybody in the community to use as a resource. Cleary University, which is the educational entity Brighton partnered with, focused their incubator for only their students.

Now, the Ann Arbor and Ypsilanti city councils will vote on the AYSZ’s recommendation to add the TASZ as a satellite district. Both councils are expected to make that decision at their respective September 2 meetings.




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