Traverse City Record-Eagle

East Bay

May 4, 2008

East Bay Township questions tax break

BY BRIAN MCGILLIVARY

TRAVERSE CITY -- East Bay Township officials are questioning why they should give a $21,000 brownfield tax break to a development on a clean site.

The Grand Traverse County Brownfield Redevelopment Authority is pushing the special designation for the nearly completed Traverse Bay Bear Company sportswear and souvenir shop on the corner of U.S. 31 and Three Mile Road.

Township Supervisor Glen Lile said he doesn't see the advantage of granting the designation.

"We don't have a blighted area, we have a brand new building there," Lile said.

The East Bay Township board must approve the brownfield plan for the county to move ahead. East Bay's board tabled the request in April and will reconsider it on May 12.

Michigan legislators created the brownfield program to encourage redevelopment of abandoned, blighted or contaminated properties by reimbursing developers for site evaluation, cleanup and some infrastructure costs.

The developer wants reimbursement for tests it completed before purchasing the property and removal of buried pipes and other equipment used to clean-up previous fuel spills.

The brownfield authority captures new property taxes generated by the development to repay the developer. Once the developer is repaid, the authority continues to capture local taxes for five years, a stipulation that would earn the county authority more than $50,000 on the project.

The former gas station site across from East Bay appeared as a good candidate for the program -- except tests showed the site was clean and the state said it didn't qualify as a brownfield.

So the local brownfield authority expanded the brownfield plan to include the adjoining roads and Mitchell Creek Inn.

Contamination from past fuel spills migrated in the groundwater from the gas station onto the adjoining properties.

Brownfield authority director Jean Derenzy said it has been "quite a while" since the sites were tested, and her board wants to test to see if contamination remains.

It's a proactive move to protect Mitchell Creek or East Bay from continuing contamination, she said.

The authority would pay for testing through a U.S. Environmental Protection Agency grant that it administers.

The brownfield designation is not required to qualify for EPA testing, but without the township's cooperation, Derenzy said she didn't know if the authority would go ahead and test the site.

"We'd have to talk to East Bay Township and see if it's a priority for them or not," she said.

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