Playing Favorites

Senate Bill 323 Hands Out Lucrative Favors on Prime Real Estate

In studies and blog posts, this author and others have argued that state "jobs" programs are really political development programs used by term limited legislators to advance their own political careerism by handing out special tax favors and subsidies to select corporate "winners," all under the guise of "economic development."

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Consider Senate Bill 323, sponsored by state Sen. John Pappageorge, R-Troy.

This would authorize special tax favors for any "major redevelopment project" spending at least $50 million for construction on a parking garage of several levels where the developer promises at least 300 new and permanent jobs.

Yep, any project at all fitting this description gets the bennies: No special favors here, no sir.

Except, only one such current project does fit that description to our knowledge and it happens to be in the district of the politician who introduced the bill.

Specifically, the bill would authorize special tax favors for the developer who wants to convert the former Kmart Corp. headquarters in Troy. The details of the project appear to be a moving target, but committee testimony in September described condos, restaurants, shops, offices and a hotel.

This is prime real estate, near the Somerset Mall off of I-75. That means it shouldn't really need any tax "incentives" to develop -- not that the developer won't try to get some, or that he won't be able to find politicians willing to deliver some.

Ironically, the law under which these particular favors would be granted is the "Brownfield Redevelopment" program, intended to help clean up and redevelop contaminated properties. However, it's become routine for Lansing to use such laws as "vehicles" to grant special favors to particular developers without regard to the original purpose. If a developer has the right political connections, he can be assured that such a vehicle will be found.

Also ironic, this site is haunted by the ghost of special favors past - "winners" that turned out to be losers. In this instance, a previous owner, Kmart, was the recipient of two separate tax break deals that rode upon another statutory favor-granting vehicle, the Michigan Economic Growth Authority. Kmart collected more than $6 million in special state tax breaks plus other local goodies in return for job promises that eventually went poof.

All this special favor-granting is unfair to hard working business owners and other taxpayers who don't have friends in Lansing. It obviously has not worked to fix Michigan's economy, and the potential for corruption is also clear. It's time that residents stop letting politicians use "economic development" as an excuse to build their own careers as favor-grantors.