Scottville Commission approves brownfield redevelopment 

June 13, 2023

Scottville Commission approves brownfield redevelopment 

SCOTTVILLE — City Commission took steps Monday evening to remove a blighted commercial building and allow the property developer to move forward with building a new market in town. The commission approved an inter-local agreement to use local tax increment revenues for Midwest V, LLC’s brownfield redevelopment project. The company is under contract to build a new Dollar General Market (also called DG Market) store at 209 S. Main Street on the southeast corner of Main and Second streets. 

The agreement is the first to be recommended by the city’s brownfield authority board, which was established in 2022 jointly with the City of Ludington. 

A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant, according to the U.S. Environmental Protection Agency. 

The Michigan Brownfield Redevelopment Financing Act of 1996 authorizes municipalities to create a brownfield redevelopment authority to facilitate the implementation of brownfield plans; to create brownfield redevelopment zones; to promote the revitalization, redevelopment, and reuse of certain property, including, but not limited to, tax reverted, blighted, or functionally obsolete property; to prescribe the powers and duties of brownfield redevelopment authorities; to permit the issuance of bonds and other evidences of indebtedness by an authority; to authorize the acquisition and disposal of certain property; to authorize certain funds; to prescribe certain powers and duties of certain state officers and agencies; and to authorize and permit the use of certain tax increment financing.

According to the State of Michigan website, a brownfield tax increment financing (TIF) works as follows: 

  • When a vacant, blighted, contaminated, or otherwise challenged property is redeveloped it becomes more valuable.
  • The increase in value results in an increase in property taxes paid to the municipality, school district or other taxing authorities for that property.
  • The additional tax paid due to the increased property value is referred to as the increment.
  • The increment is “captured” by the taxing authority and used to reimburse the developer for the cost of addressing brownfield conditions on the property during construction.
  • The brownfield activities eligible for reimbursement are defined in the Brownfield Redevelopment Financing Act (Act 381). They require local and sometimes state approval.
  • Once the developer has been reimbursed for the approved eligible brownfield activities on a project the taxing authority begins retaining all taxes collected for the property, fully realizing the increase in tax revenue from the development.

In the case of the property at 209 S. Main St., which was formerly part of Holden’s Home Emporium (and prior to that a car dealership), the current property tax on the building is about $3,000 annually. The redevelopment of the building will mean the property tax will be uncapped and — with construction of a new store — will be estimated at about $31,000 a year, according to Susan Wenzlick of Fishbeck, Thompson, Carr & Huber, Inc., the city’s brownfield consultant. While Scottville will continue to collect $3,000 a year in property taxes, the remainder of the tax increase will be used by the developer to pay for environmental cleanup up to 22 years. Full taxes may get collected sooner depending on costs. 

Roy Holden, former owner, attended the public hearing on the brownfield development, which took place during the City Commission’s regular bi-monthly meeting Monday. Holden said approving the brownfield development seems like a “no brainer”, comparing doing nothing to the old 135-year-old Scottville High School schoolhouse on North Main Street. That building is in a condition beyond repair and clean-up costs are prohibitive without the tax incentives. 

The request was approved 6-0. The commission currently has one vacancy. Another vacant seat was filled Monday by Randy Wyman. 

Builder Jason Raleigh complimented the commission being progressive in forming a brownfield authority and encouraging the re-development of dilapidated  buildings. 

The proposed new building will be 12,000 square feet, 3,500 square feet larger than the current Dollar General, located across the street. Raleigh said Dollar General Market is an upscale version of the regular Dollar General stores and is a new concept for the corporation. He said the new store would offer fresh produce and meats, along with more merchandise. He said there are few like it in Michigan, with another being built north of North Muskegon on Whitehall Road in Muskegon County. 

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