The Michigan Strategic Fund board approved two massive tax incentive packages Monday to spur on developments in Kalamazoo and Grand Rapids.
Combined, the two projects are expected to lead to nearly $900 million in investment in the two cities.
Much of the investment will be supported by brownfield tax credit recapture, which allows developers to avoid paying some of their taxes to invest the money in the project instead. Both of the projects received approval for incentives through the state’s transformational brownfield plans, which are meant to support large-scale, transformational projects.
The Grand Rapids project has been in the works for more than a year, and could reshape the city’s skyline with three new towers along the riverfront downtown. The towers are planned for a vacant parking lot on the riverfront, near a new amphitheater currently under construction.
“The Fulton & Market development will have the size, scale and impact to transform and revitalize long-underused prime riverfront property in the heart of our downtown,” said Grand Rapids Mayor David LaGrand in a statement provided by the Michigan Economic Development Corporation.
The Michigan Strategic Fund Board approved tax incentives worth about $561 million to help fund the project. It’s expected to lead to $796 million in total investment, create 1,900 jobs and lead to 670 new housing units.
The plan for tax incentives first had to be approved at the local level by the city of Grand Rapids last year. Many residents showed up to city commission meetings to oppose the plans then, saying more money from the project should go into the city’s affordable housing fund. The developer has offered to pay $8.5 million into the fund over 20 years.
The Kalamazoo plan was approved for $54.6 million in tax incentives for a project to redevelop three buildings in the city’s downtown. The three buildings include the Michigan Avenue Courthouse, an office building, and a vacant industrial building. The project is expected to involve an investment of $96 million, create 93 jobs and lead to 115 new housing units, according to the Michigan Economic Development Corporation.
