The Mill Receives Major State Support

By Rob Peterson

Many have known that Vicksburg is exceptional. A state agency provided a new reason.

The Michigan Strategic Fund approved up to $30 million to support development at the Mill at Vicksburg through its new Transformational Brownfield Plan (TBP). The funds will help offset the extraordinary costs associated with developing an obsolete, environmentally contaminated property.

The Mill at Vicksburg is only the second project in the state to receive this level of support. The other was in Detroit.

“The redevelopment of the Vicksburg paper mill into a dynamic, exciting multi-use development will bring the village of Vicksburg and the surrounding area to life and represents exactly the type of development the Transformational Brownfield Plan program was intended for,” said Jeff Mason, CEO of Michigan Economic Development Corporation (MEDC).

The agency’s website defines a Transformational Brownfield Plan as one that, “will have a transformational impact on local economic development and community revitalization while also having an overall positive fiscal impact on the state.”

The MEDC reviewed the impact of the reimbursements and found that the investment of tax dollars will be returned 2.3 to 1 in new tax revenue over 30 years. This estimate was corroborated by a team from the University of Michigan and the Upjohn Institute, an internationally known economic think-tank.

How the Incentives Work

When a blighted and contaminated property is being developed, municipalities are able to reimburse the owner for costs associated with cleanup and public spaces (see main story) through tax increment financing, meaning only new tax revenue generated by the project is used to repay the owner.

The assumption is that the project would not have occurred without these incentives, so the municipality isn’t giving up tax revenue; it is gaining a functional property, jobs, and public space for the community’s benefit. The incentives will be paid to his development company over 30 years. Once the incentives are paid back to the developer, the tax revenue, presumably much higher than what it was pre-development, resumes to the municipalities.

The exception that the State of Michigan’s Transformational Brownfield program makes is significant: not only will the developer be reimbursed through local property taxes, it will be reimbursed through state income and sales tax generated by the project. This additional benefit accounts for one-third of the $30 million in incentives provided to the developer.

The vast majority of the $80 million needed to redevelop the Mill will be fronted by Chris Moore, the Vicksburg native who is backing the Mill.

“The money doesn’t come out of our (taxpayer) pockets,” said Rachael Grover of the Kalamazoo County Brownfield Redevelopment Authority. “It is revenue that wouldn’t exist without the project, and the project wouldn’t exist without the incentives.”

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