Available Development Incentives

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

1. Industrial
   1. Tax Incentives
      1. Industrial Property Tax Abatement (Industrial Facilities Tax P.A.198 of 1974)
      2. MEGA Job Creation Tax Credit (Manufacturing, R&D, Wholesale Trade, or Office Operations)
      3. Hi-Tech MEGA Job Creation Tax Credit (Tool & Die Manufacturing ONLY)
      4. Tool & Die Recovery Zone Abatement
      5. 15% SBT Credit for Industrial Personal Property Taxes
      6. Brownfield Redevelopment Financing/Tax Credits
      7. Obsolete Property Rehabilitation Exemption
   2. Financing Tools
      1. Industrial Revenue Bonds (MSF)
      2. Industrial Revenue Bonds (OCEDC)
      3. Charter One Job Creation Loan Program
      4. Capital Access Program
      5. SBIR/STTR Emerging Business Fund
      6. SBA 504 Loan Program
   3. Additional Programs & Incentives
      1. Workers’ Compensation Cost Control Service
      2. Export Services Creation/Assistance
      3. Michigan Small Business & Technology Development Center^SM
      4. Business Operating Cost Estimating Service
2. Commercial
   1. Tax Incentives
      1. MEGA Job Creation Tax Credit (Wholesale Trade, or Office Operations)
      2. Brownfield Redevelopment Financing/Tax Credits
      3. Obsolete Property Rehabilitation Exemption
   2. Financing Tools
      1. Charter One Job Creation Loan Program
      2. Capital Access Program
      3. SBIR/STTR Emerging Business Fund
      4. SBA 504 Loan Program
   3. Additional Programs & Incentives
      1. Workers’ Compensation Cost Control Service
      2. Export Services Creation/Assistance
      3. Michigan Small Business & Technology Development Center^SM
      4. Business Operating Cost Estimating Service
3. Hi-Tech Industry
   1. Tax Incentives
      1. Hi-Tech MEGA Job Creation Tax Credit (R&D, Hi-Tech Activity, Tool & Die Manufacturing)
      2. Michigan NextEnergy Tax Credits
      3. Brownfield Redevelopment Financing/Tax Credits
      4. Obsolete Property Rehabilitation Exemption
   2. Financing Tools
      1. Charter One Job Creation Loan Program
      2. Capital Access Program
      3. SBIR/STTR Emerging Business Fund
      4. SBA 504 Loan Program
   3. Additional Programs & Incentives
      1. Workers’ Compensation Cost Control Service
      2. Export Services Creation/Assistance
      3. Michigan Small Business & Technology Development Center^SM
      4. Business Operating Cost Estimating Service

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)

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

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

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

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

Capital Access Program

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

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.

Additional Programs & Incentives

Workers’ Compensation Cost Control Service

Export Services Creation/Assistance

Michigan Small Business & Technology Development Center^SM

Business Operating Cost Estimating Service

Main Street Program Oakland County (MSOC)/National Program

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.

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