Argonaut Building Receives $5.6 million Tax Credit

[Allan]

New Center building gets $5.6 million brownfield tax credit

By Robert Ankeny

Jan. 18, 2005 3:49 PM

The Michigan Economic Development Corp. has approved a $5.6 million brownfield single-business-tax credit for redevelopment of the former General Motors Corp. Argonaut Building in the New Center area of Detroit.

GM sold the 11-story, 75-year-old office structure to Irvine, Calif.-based Orton Development Inc. last April.

Orton subsidiary Midway Corporate Plaza L.L.C. will use the tax credit along with $64 million in private investment to create a mixed-use development of residential lofts, office and retail space and parking for 800 cars, the MEDC said in its announcement. The project is expected to create about 300 jobs.

An estimated 370,000 square feet of space is to be converted into about 250 lofts. About 140,000 square feet will be retail and office space.

The Argonaut Building is between Cass and Second avenues south of Milwaukee Street.

[PghUSA]

That is great news for Detroit . . . but I seriously wonder if Orton would have done it anyway. Haven't crunched the #s but would I get a tax credit of equal % if I bought a rundown house in one of the city's "redevelopment" areas? I would hope the answer is yes, I know in the land of metro planning the tax credits and the like are sometimes what it takes to renew the urban core and actually pays big dividends to the city coffers in the way of increased business in the urban core. Knowing about how some of the board views Kilpatrick I wonder if this is corporate welfare. It is great news, just would be better if GM or Ortons community foundations would foot the bill on the taxes as a show of corporate citizenship. That money could keep city employee families with food on the table etc. just alot to give up on the tax end. Just my two cents. Interested on how this turns out for Detroit.

[Allan]

The brownfield tax credit is a state-funded program, not a city-funded progam. It is designed to encourage developers to invest in areas that otherwise would be skipped over because they are former industrial or commercial sites that are contaminated. The brownfield tax credit program has helped to encourage quite a few developments that otherwise would not have been possible. The brownfield tax credit program is actually seen as a model for similar programs across the country.

Here is a summary of the brownfield tax credit program: http://www.crcmich.org/EDSurvey/abatements-credits/btc.html

This program would exclude homes. However for all people choosing to live in a renaissance zone, all property taxes are abated for a certain length of time (I belive it is 12 years). The same applies to businesses in renaissance zones. Also, for those people living in neighborhood enterprise zones, there are 50% property tax breaks for 12 years. This program has been in place since 1994 and has helped create investment in areas that otherwise would've received none. There are 70 NEZs across the city. In addition there are historic tax credits that may be taken advantage of in some renovations.

You are right though. This particular development likely would've been built anyway. In many cases however, it is a tax credit like this that pushes a project from dream to reality.

[PghUSA]

^^ that being the case it looks like that policy is bearing great fruits for Detroit. I am also glad to see that the program is open to the Joe Schmos of the world if they want to participate. Looks like a very good program, and thanks for keeping them honest up there in Lansing!

[Aaron]

Great news. You don't really hear much about this gem, though it's a beautiful building. Its size creates a nice urban wall and the ornamentation around the top is just classic. If all goes well and the building is filled, it should be a real boost to the neighborhood and its density.

Also, a big high-five for GM, since they obviously took pride in the building and secured it in good condition when they moved to the RenCen.

[Allan]

This project is huge for New Center. In fact, it is the largest adaptive reuse project ever approved in the city of Detroit.

I wish I had some better photos of the building, but this is as good as I could do for now.

[Jonzo]

This is great news! That building is beautiful, and it will be a huge boost for the city.