By SUE SUCHYTA
DEARBORN – City Council members learned during an online May 6 special council meeting that Ford Land Development would like to convert the under-utilized Rotunda ballfields to industrial use.
City Assessor Scott Miller said the creation of a special district is an indication of the city’s tentative comfortableness with the project.
“It is telling the state that you guys, at this point, are comfortable with them moving forward and applying for the application,” he said. “It doesn’t mean that the exemption, later on, is approved or not.”
Miller said there are two different types of exemptions: one for new construction, and one for rehabbing a property.
“This one, obviously, is a vacant lot, which is known as the baseball fields, and would be new construction,” he said. “The impact to the city is this: For new construction, how taxes are established, typically, in the state of Michigan, is taxable value times your millage rate. For new construction, your taxable millage rate is cut in half, except for the state education tax, during the life of the certificate.”
Miller said the maximum life that may be granted for a certificate is 12 years, which can be extended to 14 years if there is a two-year construction period. The certificate life can be shorter if a lease has a specific year limit.
“So, the grant, or the break, if you will, goes on the building component and the personal property,” he said. “They will go on a separate assessment roll.”
Miller said the tradeoff typically is getting a new building, new taxes, new jobs, and it does tend to uplift surrounding properties.
“Eventually, that property comes off of that roll and goes on the ad valorem roll at the end of the certificate, at a higher millage rate – the existing millage rate that the rest of the city uses,” he said.
Miller confirmed that Ford Land would be applying for an Industrial Facilities Tax exemption for new construction.
“The district is established first on the site, and then at that point, they would move forward on the application to the state,” he said. “It will still go through you guys, so the council still gets a chance to say yea or nay, but ultimately, though, that decision does go through the State Tax Commission.”
He said the application can be denied or removed if they do not fulfill the requirements of what was agreed upon in the application.
Miller said that once a district is established, and the IFT is approved, he believes the entity has the right to appeal if it is denied.
He said if an IFT is approved, the millage rate is reduced by 50 percent for the life of the certificate (excluding the state education tax).
City Council President Susan Dabaja confirmed that the city, county and local school district receive 50 percent of the millage rate for the certificate period on the building and the personal property.
Miller said the personal property will probably qualify for an Eligible Manufacturing Personal Property Exemption.
He said the building components and the site improvements, such as parking lots, would go on a separate assessment roll, at a reduced millage rate, which would be cut in half.
“The land, separately, will stay on the ad valorem assessment roll, and that gets taxed just like all the other properties – taxable value times millage rate,” Miller said.
He said the land is currently classified as commercial for tax purposes, and its current assessed value is $1.4 million, or $2.8 million true cash estimated value, while $2.4 million is its estimated taxable value, and it is a 26.62-acre site, at the corner of Rotunda Drive and Schaefer Road.
Councilman David Bazzy asked how the new construction ties into the Ford Rouge plant and the vehicles that will be built there.
Miller said Dominion Realty Services will do a build-to-suit analysis for a facility of 100,000 square feet or more, which will be built for tenant Ground Effects LLC, which provides customizing services on a non-factory basis.
He said Ground Effects LLC currently puts in bedliners for Ford F-150 pickups built at the Rouge complex, and the company wishes to expand its current contract with the Ford Motor Co.
Following additional discussion, Bazzy moved to create the special district, which was supported by Councilman Robert Abraham, and unanimously approved.