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IM council approves new rehab district

IRON MOUNTAIN — While no one Monday night took issue the proposed boundaries for a commercial rehabilitation district in Iron Mountain, business owners did have concerns about the potential eligibility requirements to qualify for tax relief for improvements within that area.

Under the plan, properties within the district would be granted a Commercial Rehabilitation Act Certificate for investing in vacant or underutilized buildings and land in Iron Mountain.

The eligibility requirements only come into play to determine how many years of tax abatement would be granted to promote property renovations and upgrades.

The Iron Mountain City Council did set the district’s boundaries Monday to mirror the Downtown Development Authority district.

Criteria for qualifying for tax relief within that district will be discussed at a special meeting next Monday that already had been set for a public hearing on the city’s draft five-year recreation plan.

The council then will set final eligibility terms March 6.

All property owners within 300 feet of the new district were notified about Monday’s meeting and several attended but were confused about when they could address the matter.

No one spoke during the first public comment period or public hearing.

The business owners later said it wasn’t clear in the notice when they could talk.

The rehabilitation district now goes to the Dickinson County Board for approval in the next 28 days. County board members indicated their support for the district in January, City Manager Jordan Stanchina said.

No matter what the local eligibility requirements are, the state caps tax abatement at 10 years.

Business owners in the district who do improvements may qualify to not pay taxes on the additional taxable value created, except for school operating and state education tax, Stanchina said.

“Full taxes are still paid on the amount of taxable value which existed prior to the rehabilitation,” Stanchina added.

Suggested criteria Monday included two years of tax relief for adding $50,000 to the taxable value on a building or property, with an additional year of abatement for every $35,000 more in investment.

The eligibility criteria also includes how the property being considered will increase the local tax base, retain jobs, create jobs, provide for multi-facility residential housing and additional use and facilities that will result from the project.

As part of uses and facilities, credit will be given for creating outdoor dining areas if this work repurposes an obsolete property; for construction of a new building that supports the traditional Midwestern downtown character and architecture; if it provides new multi-level construction; or if the project protects and preserves the interior and exterior historical features.

Council member Bill Revord questioned the $50,000 investment needed for a two-year abatement as well as another $35,000 for each additional year of abatement.

“The purpose is to provide an incentive for businesses to bring back old, underutilized business stock in the downtown area. We are living in an area where the economy is difficult — every dollar invested by a business is harder to come by. That’s a lot of money to come up with for a business owner,” Revord said.

He also was concerned too many restrictions were being placed on getting the tax abatement, saying, “We would be creating so many barriers that it would prevent many business owners from taking part in it.”

Council member Kyle Blomquist said these are just some numbers they discussed in the committee meeting. He added they had to come up with certain numbers to control box stores from coming into the district, since they don’t fit into the traditional downtown area.

“We were looking to reward a certain segment — if they met the criteria, they get the reward (of) tax abatement. But we can talk about whether they are too restrictive,” Blomquist said.

A secondary requirement should be added, Blomquist said, if they reduce the amount of investment.

“I think that is needed if we really want people in the downtown district not to be petrified to invest. We’ve got to make it worth it for them to do,” Revord said.

During the second public comment time, Russ Kassin of the Dickinson County Economic Alliance said he supported setting up the district, calling it “important for local economic development as well as for Dickinson County.”

Holly DeGroot of 310 S. Stephenson Ave. in iron Mountain asked for a copy of the criteria for getting tax abatement before Monday’s special meeting.

Stanchina said that it would be posted on the city website today.

Linda Lobeck can be reached at 906-774-2772, ext. 29, or llobeck@ironmountaindailynews.com.

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