Available Development Incentives

Incentives/Services Applicable by Industry and/or Parcel Eligibility
August 2006

Industrial
Commercial
1. Tax Incentives
2. Financing Tools
3. Additional Programs & Incentives
Hi-Tech Industry
1. Tax Incentives
2. Financing Tools
3. Additional Programs & Incentives

Main Street Program Incentives

If your property or business is located within the Main Street Program district of Ferndale, a variety of incentives are available. The Main St. Program boundaries run along Woodward Ave. from Breckenridge to Saratoga (two blocks north and south of Nine Mile) and along Nine Mile from Pinecrest to Paxton.

Details of all programs below.

Tax Incentives

Industrial Property Tax Abatement (Industrial Facilities Tax P.A. 198 of 1974)

Property tax incentives are available to eligible businesses to renovate or expand aging manufacturing plants or to build new facilities. This incentive can reduce property taxes (real and personal) for up to 12 years. An obsolete plant or machinery that is replaced or restored results in a 100% exemption from the property tax on the value of the improvement. The Industrial Facilities Tax (IFT) on a new plant and/or machinery and equipment is computed at half the local property tax millage rate, plus the 6-mill statewide education tax. This amounts to a reduction in property taxes of approximately 50%. For more information go to: http://www.michigan.org/medc/services/general/cat/guide/index.asp

MEGA Manufacturing, R&D, Wholesale Trade and Office Operations Job Creation Credits

Companies eligible for a refundable job creation tax credit against the Michigan Single Business Tax are those engaged in manufacturing, R&D, wholesale trade, or office operations that are financially sound, devote at least 25% of operating expenses to research and development and have solid proposals. Retail facilities are not eligible. Each credit may be awarded for up to 20 years and up to 100% of the amount of the project. See the following link for more details regarding eligibility and duration of credits. http://www.michigan.org/medc/services/financial/combo.asp?ContentId=85376A88-2715-4D48-89A5-AD81A39B717E&QueueId=1&ContentTypeId=10002

High Mega Job Creation Tax Credits

Eligible companies are those businesses that are primarily engaged in a "hi-technology activity" (i.e. electronics, communications, medical science and other high technology) or that devote at least 25% of total operating expenses to research and development. Retail facilities are not eligible. Each credit may be awarded for up to 20 years and up to 100% of the amount of the project. Incentives include an SBT credit and a refundable credit equal to the personal income tax attributable to new jobs created. For more information regarding eligibility requirements and duration of credits call (517) 373-9808 or go to: http://www.michigan.org/medc/common/book/topic.asp?BookId=1&BookName=Data+Book&ChapName=Business+Incentives&ChapId=22&TopicId=64&TopicContent={66B46752-A375-427E-A25E-784A2A437767}&From=BI

Tool and Die Recovery Zone Abatement

As part of the Michigan Renaissance Zone, the Michigan Strategic Fund (MSF) Board is allowed to designate up to 25 Tool and Die Renaissance Recovery Zones (Recovery Zones). The designation of a Recovery Zone is within the discretion of the MSF Board, pursuant to MCL 125.2688d. The taxes that companies in Recovery Zones DO NOT pay are: Single Business Tax, 6-mill state education tax, local personal property tax, local real property tax and local income tax. For more information and to see if your company is eligible to apply, please go to: http://www.michigan.org/medc/services/sitedevelopment/renzone/toolanddierecovery/index.asp

Michigan NextEnergy Tax Credit

Alternative Energy companies in Michigan may be eligible for tax breaks including an SBT credit and personal property tax abatement. To be eligible, a company must first be certified as "Alternative Energy". See criteria and tax abatement information at: http://www.michigan.org/medc/ttc/FundingOpportunities/

15% SBT Credit for Industrial Personal Property Tax & New Apportionment Factors

New legislation allows Michigan companies to claim a refundable 15% SBT credit for property taxes paid on industrial personal property for a 4-year period, 2006-2009. The credit addresses the property tax associated with the General Property Tax Act, the Industrial Facilities Tax (PA 198), OPRA, and reimbursement payments made under contract relative to Renaissance Zones and other agreements in local distressed communities. For more information, contact the MEDC Customer Assistance ay (517) 373-9808.

Brownfield Redevelopment Incentives (Core Community Incentive)

Core Communities have the ability to use Brownfield redevelopment tools on contaminated, blighted and functionally obsolete sites to facilitate the reuse of undesirable properties. The tax increment-financing (TIF) allows projects to capture state and local property and possibly school taxes to pay for cleanup-related costs such as demolition, site preparation, public infrastructure and lead and asbestos abatement, as well as environmental remediation. Brownfield redevelopment projects in Core Communities are also eligible to apply for a Single Business Tax Credit. Credits are available for up to 10% of eligible investments to a limit of $30 million. For more information on Brownfield Incentives go to the MEDC Website: http://www.michigan.org/medc/miadvantage/incentives OR http://www.michigan.org/medc/services/general/cat/guide/index.asp

Obsolete Property Rehabilitation Exemption (OPRA) (Core Community Incentive)

Available only in Core Communities, this incentive is designed to assist in the redevelopment of contaminated, blighted and functionally obsolete properties. The objective is to convert underutilized buildings into vibrant commercial and/or commercial housing opportunities and is available only for commercial and/or commercial housing projects. The incentive offers the community the ability to freeze local property taxes at the pre-development level for up to 12 years. The developer can also apply to the State Treasurer to freeze half of the state education millage for up to six years. Land is not abated. For more information go to: http://www.michigan.org/medc/services/general/cat/guide/index.asp

Neighborhood Enterprise Zones

This program provides property tax incentives for new home construction and home rehabilitation. For new home construction, instead of the full millage rate, the new home is taxed at half of the statewide average. For rehabilitation projects, the assessment is frozen at pre-improvement levels. Each of these abatements can be approved for 6 to 12 years. Land is not abated. For more information go to: http://www.michigan.org/medc/services/general/cat/guide/index.asp

Financing Tools

Industrial Revenue Bonds (available through Michigan Strategic Fund)

Manufacturing companies, non-profit organizations, and solid-waste facilities can finance projects with low-interest Industrial Revenue Bond (IRB) loans available through the Michigan Strategic Fund. These bonds offer profitable firms with capital cost savings stemming from the difference between taxable and tax-exempt interest rates. The governmental unit borrows money from private capital markets, secured only by the project’s revenues rather than the government’s full faith and credit. Interest income earned on bonds issued by a governmental entity to finance a project for a private company which has demonstrated a good public purpose is exempt from federal, state, and local income taxes, thereby reducing the cost of capital (including the cost of letters of credit, remarketing fees, etc.) to an average 75-85% of prime. For more information on eligibility and terms, go to: http://www.michigan.org/medc/services/financial/combo.asp?ContentId=ACDD73A1-DC3B-4601-B544-9AE5654CBCD0&QueueId=1&ContentTypeId=10002&ContentName=IDRB_Industrial_Development_Revenue_Bonds

Industrial Revenue Bonds (available through Oakland County's Economic Development Corporation)

Manufacturing companies and non-profit organizations can finance projects with low- interest Industrial Revenue Bond (IRB) loans available through Oakland County's Economic Development Corporation (OCEDC). These bonds offer small to medium sized manufacturers and not-for-profit organizations the opportunity to finance the acquisition of fixed assets and related soft costs at favorable interest rates. The bond amounts range from $1 million to $10 million (no limit for not-for profit) and offer terms of up to 30 years. For more information go to: https://www.oakgov.com/peds/program_service/finance_bond.html

Charter One Job Creation Loan Program

This new lending program is a partnership between the State of Michigan and Charter One Bank to help grow Michigan's economy by helping businesses access affordable financing. Up to $200 million is available for Michigan businesses to invest in equipment, machinery, building acquisition or remodeling. The Charter One Job Creation Loan Program can help you put your business plans into action. For more information, please go to: http://www.michigan.org/medc/services/financial/combo.asp?ContentId=276EFF6C-3B62-4F91-9402-23B3AA3D35C6&QueueId=1&ContentTypeId=10002&ContentName=Charter_One_Job_Creation_Loan_Program

Capital Access Program

To assist small businesses with capital needs, the Michigan legislature has asked the Michigan Economic Development Corporation (MEDC) sm to reestablish the Capital Access Program (CAP). This innovative program uses small amounts of public resources to generate private bank financing, providing small, Michigan businesses access to bank financing that might not otherwise be available. While active, the CAP provided funding to more than 9,700 businesses, generating approximately $550 million in bank lending. For additional information go to: http://www.michigan.org/medc/cm/attach/0003005A-7A12-42C3-BE1C-044EF1E000EA/CAP.pdf OR http://www.michigan.org/medc/services/financial/combo.asp?ContentId=D0DBF463-8122-460E-8029-E2A1E896EC36&QueueId=1&ContentTypeId=10002&ContentName=Capital_Access_Program

SBIR (Small Business Innovation Research)/STTR (Small Business Technology Transfer) Emerging Business Fund

This matching program, administered by the Michigan Economic Development Corporation (MEDC), awards funds to Michigan companies by matching Phase I SBIR/STTR awards. A "Michigan Company" is defined as a for-profit business that has all or substantially all of its employees and operations, including operations funded by the Phase I SBIR/STTR award, within the State of Michigan both at the time of the Phase I SBIR/STTR award and during the time period covered by the Phase I SBIR/STTR award. The Matching Award amount will be the lesser of $15,000 or 15% of the SBIR/STTR award. There will be a maximum of $50,000 available per Michigan Company, including affiliates, per fiscal year allocated on a first come first serve basis, contingent upon the availability of funds. Eligible applicants include individuals, Michigan Companies, and non-Michigan Companies. Matching Award distribution will be contingent upon individuals and non-Michigan Companies becoming a Michigan Company. For more information, go to http://www.michigan.org/medc/ttc/sbir.asp OR http://www.sba.gov/sbir/indexsbir-sttr.html

SBA Small Business 504 Loans

The SBA's 504 Loan Program is Oakland County Business Finance Corporation a great deal for small and medium-sized businesses. Administered at the County level through the Oakland County Business Finance Corporation, a 504 loan provides access to the same type of long-term, fixed-rate financing enjoyed by larger firms. Interest rates are equivalent to favorable bond market rates. A 504 loan may be used for purchasing such fixed assets as land and improvements; construction of new facilities or renovation of existing facilities; or long-term machinery and equipment with a useful life of at least 10 years. Soft costs, such as legal and architectural fees, environmental studies, appraisals can be rolled into the loan. Ineligible costs include venture capital, refinancing or debt consolidation, working capital or vehicles. The program is designed to assist small to medium-sized companies that are considered fiscally healthy. In certain instances, the SBA 504 Loan Program may also be used to finance start-up businesses (i.e. those in operation less than two years). However, such businesses must demonstrate the following:

Qualified management with industry related work experience,
Strong marketing plan backed by a thorough market feasibility study,
Access to an adequate amount of working capital, and
Minimum 15% equity contribution.

There are also other loan programs available through the SBA that may be more suited for the various needs of small and medium sized business. For more information on the 504 Loan or other Federal Loan Programs go to the Federal or County website: http://www.sba.gov/financing/sbaloan/cdc504.html OR http://www.oakgov.com/peds/program_service/finance_sba.html

Additional Programs & Incentives

Workers’ Compensation Cost Control Service

The Workers’ Compensation Cost Control Service assists employers in designing and implementing strategies for minimizing their costs of workers’ compensation coverage. This program also benefits employees by stressing the importance of injury prevention and easy return-to-work-programs, thereby minimizing the suffering and lost income, which result from work-related disabilities. For more information regarding this program please contact MEDC’s Customer Assistance at (517) 373-9808 or go to: http://www.michigan.org/medc/services/workerscomp/?m=12;9

Export Services Creation/Assistance

The Michigan Economic Development Corporation has programs to assist Michigan companies at all levels of export experience, from beginners to those seeking to expand into new areas. Services are provided through a variety of methods. There is continuous web access to information and statistics including The Export Connection, a searchable web-based directory of Michigan export businesses and service providers found at http://www.michigan.org. Additionally, one-on-one assistance is available through an international trade specialist at MEDC. For more information call (517) 373-9808 or go to http://www.michigan.org/medc/services/export/

Michigan Small Business & Technology Development Center^SM

The Michigan Small Business & Technology Development Center^SM network provides a full range of services for a variety of small businesses that are emerging and growing throughout Michigan -- new venture companies, existing small businesses, expanding businesses, new technology companies, and innovators. The MI-SBTDC is known throughout Michigan for its quality counsel, training and market research capabilities. All services are available at low-or no-cost because of the financial support of the Small Business Administration and local partners in each region. http://www.gvsu.edu/misbtdc/

Business Operating Cost Estimating Service

This service can assist with the expansion and location decision process. It analyzes company-specific data and estimates the impact a firm’s expansion might have on four cost factors, specifically the Single Business Tax, property taxes, workers’ compensation insurance, and unemployment insurance. For further information go to: http://www.michigan.org/medc/services/financial/combo.asp?ContentId=5781DDE7-EE91-4747-A4DF-55469F0D6088&QueueId=1&ContentTypeId=10002

For other Business Services go to: http://www.michigan.org/medc/services/?m=12 and click on the "Business Services" tab.

Main Street Program Oakland County (MSOC)/National Program

Federal and State Historic Preservation Tax Credits

The Federal/State Tax Credit is a 20% income tax credit for the certified rehabilitation of income-producing, certified historic structures (Certified Historic Structure means buildings listed on The National Register of Historic Places either individually or in a designated historic district ). Applicants must first apply for and receive the Federal Tax Credit before a property becomes eligible for the additional 5% State Tax Credit.

American for Disabilities Act (ADA) 0f 1990 Access Tax Credits

A 50% tax credit is available to small business owners for "eligible access expenditures" that meet ADA Guidelines when rehabilitating an existing building. The credits apply only to construction costs directly associated with making the building ADA compliant.

New Markets Tax Credits

This program allows eligible businesses in qualified districts to have greater access to loans and equity investments, and/or be able to borrow money on better terms than for which they would usually qualify. A qualified commercial district is one that is in, or services, a low-income census tract with a 20% poverty rate or a median household income that is 80% or less of the statewide median household income. The NMTC can be utilized with the following five different National Trust for Historic Preservation fund programs: 1) Inner-City New Markets Fund, 2) Historic Tax Credit Fund, 3) Historic New Markets Conduit Fund, 4) Main Street Conduit Lending Fund, and 5) Main Street CDE Conduit Lending Fund.

OPRA (Core Community and Main Street Program Incentive)

In addition, there are several Rehabilitation Incentives such as:

MSOC Design Assistance Program
Façade improvement Grant Program
Sign Grant Program
Awning Grant Program
Paint Program
Low-Interest Loan Program
Retail Rent Subsidy Grants
Working Capital Loan Fund
Preservation Easements
Acquisition Assistance Grants & Loans

For more information on Main Street Programs go to: http://www.oakgov.com/peds/program_service/main_street/mainstreetoc.html

The City of Ferndale, Michigan
300 East Nine Mile Road
Ferndale, Michigan 48220
(248) 546-2525

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