SmartZone may come to Tecumseh
The Tecumseh City Council has taken its next step in becoming part of the Ann Arbor SPARK SmartZone at the Monday, July 7, city council meeting.
The council unanimously passed a resolution to hold a special meeting on Monday, July 14. The meeting will begin at 6:30 p.m. to not only schedule a public hearing on joining the SmartZone, but also approve Tecumseh City Manager Kevin Welch to prepare the necessary notices and resolutions to create the SmartZone Local Development Finance Act (LDFA) district.
“In part, it’s a relatively unutilized economic development tool in the state,” said Welch.
Tecumseh could become a satellite SmartZone, in partnership with Adrian, to the one Ann Arbor currently has. This will allow the Ann Arbor SmartZone to continue operating. If Adrian decides to not create a SmartZone district, Tecumseh would move forward on their own.
“They don’t get any more money because of us,” Welch said.
A SmartZone is not much different from the LDFA the city currently has. It operates by capturing the incremental tax revenue increases in local taxes along with the six percent school tax. Money captured from the incremental tax revenue can be used in the public right-of-way that directly benefits the business in that district, like expanding infrastructure at the Tecumseh Business and Technology Campus.
Joining the Ann Arbor SmartZone is a 15-year agreement.
“I would guess that at some point in time there’s going to be a project in that business and technology campus where we expand the infrastructure there. That money could be used for that,” said Welch.
Along with the Tecumseh Business and Technology Campus, the proposed SmartZone district includes Van-Rob Tecumseh, Tecumseh District Library, Tecumseh Middle and High schools and the Tecumseh Public School Administrative building. It would also include the property in Adrian’s district.
Money captured from the six percent school tax, which is replaced by the State of Michigan, can be used to entice new companies to the area, and doesn’t have to be spent on right-of-way improvements. Things that could entice businesses to the area could include training programs at the high school or support programs at the library for new businesses.
“Taxpayers are not paying anything different than they were before. The school is not receiving anything less,” Welch assured.
At the council’s initial discussion about becoming a satellite SmartZone district, the former Tecumseh Products property was included. It was removed because it was believed that any development on that land would want to use Brownfield Development Authority (BDA) incentives.
“The reason we chose not to recommend it is that it is more than likely that you’re going to want to use Brownfield incentives because it’s a Brownfield site.” Welch said. “You have to weigh what’s better as an incentive — Brownfield incentives or public right-of-way incentives. There’s nothing stopping us from including it later on.”
There can only be one satellite SmartZone district in District 9 of the Michigan Economic Development Collaborative, which includes Lenawee, Monroe, Hillsdale, Jackson, Washtenaw and Livingston counties.
“As far as we know we are farther ahead than anyone else,” said Welch. “If were going to do it, we need to get it going.”
Under Tecumseh’s proposition, the city would only capture 50 percent of the incremental tax revenue and school tax.
“The Library does know they will loose 50 percent of future capture. Now, we’re talking about new money and Gayle indicated to me that they would be supportive of this because they see the bigger picture that if we have this pot of money we can use to bring new companies in, that helps them too,” said Welch. Gayle Hazelbaker is the library director.
A new board made up of appointees by the Tecumseh City Council and Adrian City Commission will decide the usage of funds captured. A county commissioner will also have to serve on the board because it is a multi-city SmartZone.
“Ann Arbor has nothing to do with our board. Our board would control our money generated here,” Welch said.
The city’s joining of the SmartZone is conditional to the agreement that all increased tax revenue collected in Tecumseh will be restricted for use in only the city’s SmartZone district. Any usage of funds outside the city would have to be voted upon.
“We can agree to have a spending plan where the money that’s generated in Tecumseh can only be used in Tecumseh — and the same for Adrian,” added Welch.
“If there’s a downside to this, it’s that you’re moving funds that you would normally have in your general fund to the LDFA. However, those funds are still available to you to use on public roads that could somehow service the Tecumseh Business and Technology Campus or Van-Rob,” Welch said.