Ypsilanti City officials are considering putting an income tax proposal in front of voters next May (2007). City Council just passed a resolution designed to place a moratorium on new special events. There has aslo been a lot of public talk surrounding cutting the bus subsidy the City of Ypsilanti pays to the AATA in half.

Everyone knows the financial outlook in Ypsilanti is pretty bleak.

But you know what? Things aren’t so bad. The Ypsilanti City Council is considering giving the Pennisular Apartments and Edwards Communities another ONE MILLION DOLLAR tax break.

Who would ever consider giving away another ONE MILLION DOLLARS when the community is struggling?

For some reason these gems never make it into the local papers, but at the most recent Ypsilanti City Council meeting, Rick Kirk gave a presentation about how he and his investor spent more money than they expected in cleaning up the Brownsfield site at the corner of Leforge Road and Huron River Drive. He carried a massive stack of binders to the table filled with more than a thousand pages in order to help reinforce his point. He said that he and his investor took a great risk in developing this property and Ypsilanti owed them. He didn’t use those exact words, but there wasn’t anyone at the meeting who interpretted it differently.

To see a person beg for a million dollars in order to make his multi-million dollar investment more financially viable really chokes a guy up. I’m not embarrassed to say I was moved.

The old Peninsular Paper Mill was generating a little more than $14K per year in property taxes. The property tax revenue on the new Peninsular Apartments is over $300K per year. Often times great risk brings great rewards. One of those rewards was a $1M tax abatement on the apartments. I hate to admit it, but Ypsilanti has a great number of Brownsfield sites, and in order to get investors to come in and develop these sites, government often has to ply them with tax incentives. And that’s just what the City of Ypsilanti did the first time around. The full value of the property taxes generated won’t hit the City’s coffers until 2009.

Now that Mr. Kirk has thrown a monkey wrench into the works, depending on the deal they ultimately cut, the City may not see the full value of those property taxes until 2015. Councilmember Barry LaRue asked how receptive Mr. Kirk would be to paying half of the full value of the property taxes from 2009 through 2015 so the ONE MILLION DOLLAR tax abatement might be spread out over six years rather than three. It’s a pretty decent suggestion if you want to give away ONE MILLION DOLLARS.

One City Councilmember defended the suggestion by saying, “[We] have the opportunity to have Penn Apt tax money diverted to the general fund earlier than now allowed while, at the same time, keeping the credibility of the City of Ypsilanti.” He continued with, “If we forced the developer to eat their unexpected costs, we would discourage other developers to consider our dirty brownfield sites.”

What’s rather comical about this is that the Penn Apartments have been completed for nine months. It’s only now that the investors are coming to the City with their hands out. The logical question Council needs to ask is why wasn’t construction halted when the developer discovered the soil to be more contaminated than previously assumed. And why didn’t the developer try and come back and negotiate a better deal then.

It’s especially frustrating to know this ONE MILLION DOLLARS will head straight to Ohio and never be spent on any other local development projects.

Can you imagine what all of those people working on saving bus service to Ypsilanti are going to do when they hear about this?