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We want your business!
We want your company to
relocate here. Saginaw Future Inc. and Saginaw County will work
together with you to develop a package you can’t refuse. Renaissance
Zones, Tax Abatements, and Workforce Development are just a few of the
incentives awaiting you in Saginaw County.
Renaissance Zones
P.A. 198 Tax Abatement
P.A. 328 Tax
Abatements
Obsolete Property Rehabilitation Act - OPRA
Community Development Block Grant
MICHIGAN ECONOMIC GROWTH AUTHORITY (MEGA)
HIGH TECH MEGA
Brownfield Tax Increment Financing
Brownfield Redevelopment
Economic Development Job Training (EDJT)
Youth Registered Apprentice Tax Credit
Saginaw County Revolving Loan Fund (RLF)
IDRB - Industrial Development Revenue Bonds
SBA 504 - Small Business Administration 504
SBA 7(a) Small Business Administration 7(a)
Renaissance Zones
The City of Saginaw has received designation for an area of 860
acres containing 10 sub-zones that are virtually TAX FREE for a period
up to
12 years.
Renaissance Zones waive
local and state taxes such as:
·
Single Business Tax (SBT)
· State Income Tax
· General Property Tax
· City Income Tax
· Industrial Facilities Tax
· Enterprise Zone Tax
· Technology Park Facilities Tax
· Commercial Forest Tax
· Neighborhood Enterprise Zone Tax
· City Utility Users Tax
Renaissance Zones are
available in the City of Saginaw only.
Click
for more information
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P.A. 198 Tax Abatement - Industrial Facilities
Exemption
Most municipalities in Saginaw County are very favorable to offering
tax abatements on new facilities and equipment purchases by
manufacturers. The P.A. 198 tax abatement program provides a 50%
abatement of real and personal property for up to 12 years on new
plant and/or machinery and equipment. Instead of the property tax, the
firm pays an Industrial Facilities Tax (IFT) that reflects the
abatement savings.
Eligible Facilities:
· Industrial plants who
primarily manufacture or process goods or materials by physical
change. Related facilities of Michigan manufacturers such as offices,
engineering, research and development, warehousing or parts
distribution are also eligible for exemption.
· High technology companies.
· Exemption applies to buildings, building improvements, machinery,
equipment, furniture, and fixtures. Land is specifically excluded from
the benefits of the act and is fully taxable.
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P.A. 328 Tax
Abatements
Public Act 328
allows communities to abate all new personal property taxes in certain
geographic areas. Saginaw County municipalities eligible to
participate include the City of Saginaw, Buena Vista Township,
Carrollton Township, Spaulding Township, and Zilwaukee Township. New
personal property is defined as property not previously subject
to property taxes in any other jurisdiction in this state. The local
community and the business negotiate the length of abatement for the
new personal property tax. The law does not contain a maximum, nor a
minimum number of years.
Eligible Facilities:
· Manufacturing, mining,
research and development, wholesale and trade, and office operations.
Retail businesses are not eligible.
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Obsolete Property Rehabilitation Act - OPRA
The OPRA (P.A. 146)
incentive essentially allows property owners that are proposing a
building renovation to "freeze" a portion of their real property taxes
on the current property's value for a period of up to 12 years. Only
commercial property or commercial housing property is eligible and the
project must be located in a qualified local governmental unit (City
of Saginaw and Buena Vista Township are eligible). The process to
secure this incentive includes two public hearings and two council
resolutions. In order for a project to be eligible, this incentive
must be secured prior to building renovation.
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Community
Development Block Grant (Small Cities CDBG)
The Michigan Community
Development Block Grant is available to all Saginaw County communities
outside the City of Saginaw. As an entitlement community, the City of
Saginaw is not eligible to receive CDBG infrastructure grants.
However, in the past the state has offered similar infrastructure
programs targeted to the City of Saginaw such as the Core Communities
Initiative, Waterfront Redevelopment Grant, or Center for Michigan
Renaissance Program. Grants are available for public infrastructure,
including construction of water lines, sanitary sewer lines, streets,
roads, bridges, utilities, and parking facilities. These public
improvements must be directly related to the location, expansion, or
retention of a specific business (es) resulting in permanent job
creation. Priority is given to base manufacturing businesses.
Generally, CDBG grants
take into consideration the number of jobs that will be created with
eligible grants up to $10,000 per job committed.
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MICHIGAN ECONOMIC GROWTH AUTHORITY (MEGA)
Companies that are
financially sound and have solid project proposals may be eligible for
a refundable Michigan Economic Growth Authority (MEGA) tax credit
against the Michigan Single Business Tax. Companies engaged
in manufacturing, R&D, wholesale and trade, and office operations are
eligible. Retail facilities are not eligible. Each credit may be
awarded for up to 20 years and up to 100% of the amount of the
project.
Factors governing the
amount and duration of MEGA Credits:
· Creation of 75 new jobs
for in-state, 150 for out-of-state, companies. The new jobs must be in
addition to those existing during the year preceding application for
the credit.
· MEGA tax credits must address any competitive disadvantage of
expanding or locating the business in Michigan, must be necessary for
the expansion/location to be made in Michigan.
· A local organization must make a financial or economic commitment to
the project.
· The project cannot be announced or work started before the MEGA
award.
· The average wage must equal or exceed 150% of the federal minimum
wage.
· Total Capital investment of the project.
· Impact of the project on Michigan's economy.
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HIGH TECH MEGA
High Tech
companies may be eligible for tax credits against the Single Business
Tax through the Michigan Economic Growth Authority. High Tech
companies include businesses whose activity includes high-technology
activity, and that use at least 25 percent of its total operating
expenses for research and development. High-tech activity includes
computing; advanced materials; biotechnology, but not cloning or stem
cell research with embryonic tissue; electronic device technology;
product research and development; advanced vehicle technology; and
medical device technology.
Minimum eligibility for
credit:
· Company must create 5
jobs initially, and 25 jobs over the five years
· Company must spend at least 25% of operating budget on research and
development.
· Company must have high-tech activity.
· The average wage for the jobs would have to be at least four times
the federal minimum wage.
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Brownfield
Tax Increment Financing
The Tax Increment
Financing Authorities allows municipalities to develop districts with
authority to capture taxes due to the increase in property values
within a specific district that have resulted from project
investments. The districts may be under the jurisdiction of a Downtown
Development Authority (DDA), Local Development Finance Authority (LDFA),
Tax Increment Finance Authority (TIFA) or Brownfield Redevelopment
Authority (BRA).
Under the act, the
authority may use the captured taxes to pay for water and
sewer, roads, environmental testing and other public investments
within the development district depending on type of authority. The
funds may be used for either industrial or commercial projects.
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Brownfield Redevelopment (SBT Credit)
Under the Brownfield
Redevelopment program, buyers of contaminated sites can take title to
environmentally impaired property without assuming liability for
existing contamination, provided the buyer conducts a baseline
environmental assessment (BEA) and discloses it to the state.
Municipalities may also
create a Brownfield Redevelopment Authority to capture tax revenues
generated by developer's projects to pay for eligible environmental
costs, due care activities, and additional response activities. The
mechanism for capturing these taxes is a Brownfield Plan that is
approved by both the local unit of government and the Brownfield
Redevelopment Authority. In addition, a Brownfield plan may also
provide a Single Business Tax (SBT) Credit equal to 10/% of the costs
of eligible investment (including building and equipment) on the
Brownfield site up to a maximum credit of $30 million.
Recent legislation
expanded both the eligibility and the number of incentives under this
program within Core Communities, such as the City of Saginaw and Buena
Vista Charter Township. In addition to contaminated sites, eligible
sites now include properties declared blighted or functionally
obsolete.
Blighted property is
defined as property declared a public nuisance under local housing
laws, fire hazard, dangerous to persons or property, tax reverted
property, and unfit for use due to destroyed or removed municipal
services. Functionally obsolete property is property not useable for
intended purpose due to overcapacity, changes in technology,
deficiencies or super-adequacies in design.
As Core Communities, the
City of Saginaw and Buena Vista Charter Township may also approve
Brownfield Plans that allow tax capture for not only environmental
concerns, but also site improvement costs such as site preparation,
demolition, and infrastructure improvements. In addition, Core
Communities may also consider approving a tax freeze on local taxes,
called the Obsolete Property Rehabilitation Exemption (OPRA)
Certificate, for a period up to 12 years on existing buildings being
converted to commercial or multi-family residential projects.
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M.E.D.C.
Economic Development Job Training (EDJT)
This program provides training
funds for businesses that promote new job opportunities, advanced
training for existing employees, skilled training for new workers, and
strengthen the state's economic base.
Funds are released through
a competitive application process. Once the company has defined its
training needs, SFI will pursue training funds through the appropriate
eligible entity. Eligible course categories include: applied
academics, equipment specific, process improvement (ISO/QS 9000) and
technical training. The recent average training grant has been $900
per trainee.
In a typical project, a
provider such as Delta College Office of Corporate Services will meet
with a Company to discuss their employment plans and training needs.
Delta will help develop a training plan that includes cost estimates.
These costs may be covered by the EDJT program, the Governor's
Scholarship Fund, On-The-Job (OJT) funding or Job Training Partnership
Act (JTPA) funds.
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Youth
Registered Apprentice Tax Credit
A tax credit of up to
$2,000 annually per apprentice is available to employers who, through
registered apprenticeships, train young people under age 20 who are
enrolled in high school or a GED test preparation program. Students
are employed part-time with structured on-the-job training combined
with classroom work. Wages are paid on a graduated scale leading to
journeyman status. Continued employment with the firm is expected.
An employer, employer
association, or the employer and the union, if applicable, are
eligible to apply. A formal agreement is made between the business or
industry, the educational facility, and the U.S. Department of Labor's
Bureau of Apprenticeship
and Training.
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Saginaw
County Revolving Loan Fund
The Saginaw County
Revolving Loan Fund (RLF) is available for companies making new
investment and creating jobs in Saginaw County. Funds may be used for
working capital or fixed assets. Eligible businesses are manufacturing
companies, high tech firms, or distributors. The program is
administered by Saginaw Future Inc. and all applications are reviewed
by the County Revolving Loan Fund Board.
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IDRB - Industrial Development Revenue Bonds
The Industrial
Development Revenue Bond program is tax exempt financing for fixed
asset purchases. The Saginaw County Economic Development Corporation (EDC)
authorizes issuance of the bonds that are sold to single or multiple
investors.
The Michigan Economic
Development Corporation (MEDC) also has a statewide program to issue
IDRB's through the Michigan Strategic Fund. Saginaw Future Inc.'s
staff can assist in pursuing these tax-exempt bonds from either
source.
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SBA 504 - Small Business Administration 504
A Small Business
Administration loan program providing long-term fixed rate financing
for the acquisition or construction of fixed assets. Projects are
financed through a unique public/private partnership that involves
private lenders financing 50% of project costs, MCDC (Michigan
Certified Development Corporation) covering up to 40% of project
costs, and small businesses investing at least 10% of project costs.
The SBA 504 Loan Program
offers two loan terms, ten and twenty years, carry a fixed rate equal
to a five-year treasury bond plus 1.75%, and a twenty-year loan
carries an interest rate equal to a ten-year treasury bond plus 2.1%.
The SBA 504 Loan Program
is primarily designed to assist healthy, expanding businesses that
have been in operation for two years or more.
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SBA 7(a) - Small Business Administration 7(a)
Guaranteed Loan
The SBA 7(a) assists
small businesses in obtaining a loan guarantee to enhance conventional
financing. When conventional sources have been exhausted, small
profit-making businesses that operate in retail, construction,
wholesale, manufacturing and other services may apply for SBA 7(a)
assistance.
Businesses apply for SBA
7(a) guarantee through a bank that submits the application to the
SBA's Michigan office. The SBA 7(a) provides working capital for the
acquisition of inventory, financing receivables, and diminishing
debts. Along with working capital, the SBA 7(a) covers fixed assets.
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Summary
Saginaw Future is
prepared to develop a customized incentive package to meet your
company’s specific needs. Please contact us at
info@saginawfuture.com
for assistance.
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