Flo’s brownfield grant hits snag with MEDC

By Cory Smith • Last Updated 11:55 am on Tuesday, December 27, 2016

Greenville City Manager George Bosanic, left, updates members of the Greenville Downtown Development Authority, including Mayor John Hoppough, right, about the status of a proposal for a brownfield grant with Flo’s Ristorante & Pizzeria. — Daily News/Cory Smith

GREENVILLE — Efforts to secure tax increment funding (TIF) through a brownfield grant involving Flo’s Ristorante & Pizzeria appear to have hit a snag.

During this month’s Greenville Downtown Development Authority (DDA) meeting, Greenville City Manager George Bosanic reported that a plan to create a 50-50 split on future TIF funds between the city and Flo’s, as proposed by the city, had been rejected by the Michigan Economic Development Corp (MEDC).

According to Bosanic, the proposal from the city to include an agreement to release future tax revenue on the local school-aid millage could only be approved if the DDA was willing to give up 100 percent of that future revenue, as opposed to only 50 percent as proposed by the DDA.

“We are still holding out hope, but it’s getting less and less of a possibility that they (MEDC) will participate with the school aid portion, given that the DDA wants to split the TIF captures 50-50,” Bosanic said. “They are just saying that that is not enough commitment by the DDA to give up only 50 percent of the (tax) capture. They (MEDC) want you to give up 100 percent.”

Bosanic said despite the setback, Flo’s is still willing to move forward with a brownfield agreement through TIF funding with the DDA.

“Flo’s is essentially saying, if that’s the message, that’s the message,” Bosanic said. “They want to move forward with a plan that just captures the 50 percent, and see if they can make that work.”

A standard Brownfield Authority Grant agreement would shift TIF funds that the DDA currently receives and deliver it to the owners of Flo’s — brothers Dan and Davide Uccello — over a period of about nine years, resulting in approximately $140,000 in funds.

However, Bosanic said the city pleaded with the MEDC to reach a common ground, claiming that 100 percent removal of the TIF from the DDA would have created too large a burden for the authority.

The result was a 50-50 split over 18 years instead of nine, with the inclusion of TIF funding from the school-aid fund.

The proposed split was agreeable between the two parties because of the inclusion of the school-aid fund; however, with that likely no longer being an option, Bosanic said the DDA will have to make a new decision on how much funding to give up on annual basis, as well as for how long, or to simply stop pursuing the brownfield grant altogether.

“I would anticipate that in January there may be a formal request for consideration of a plan,” Bosanic said. “In the meantime, because of the interest of time, I’m going to get the process started with the Brownfield Authority and get a meeting set with them. At the end of the day, if the DDA says it’s not interested, then it will just die. But at least the process will have started with the Authority.”

According to DDA Chairman David Ralph, the DDA had previously reached a consensus without a vote to go forward with conversations on the TIF funding plan, however, with the school-aid fund at 50 percent no longer being an option, the DDA would have to re-evaluate the issue.

The DDA is continuing to pay off a bond for the Lafayette Street streetscape from more than a decade ago, and Ralph said that needs to remain a priority as the DDA looks at its finances.

“Even with those options we have to look at the bottom line for our budgeting,” Ralph said. “We’re committed to the bond and other things that we would like to do. Should we go through with this process, I think we still have to be very mindful of what it is we are establishing, and what level of commitment the DDA is making to any single investment in the downtown.”

Ralph said there are other businesses aside from Flo’s that the DDA needs to consider in reaching its decision.

“The DDA is being asked to provide a level of commitment to help keep their (Flo’s) investment viable,” he said. “It’s an interesting tug of war I’m seeing develop here because it is asking a type of commitment from the DDA that others may wish to see. I’m not pushing one way or the other, I’m just identifying what is happening here, and what it might mean going forward.”

Bosanic reiterated that the consideration of a brownfield grant for Flo’s occurred because Flo’s invested more than $1 million in opening a location in Greenville.

“If others, such as four projects could coordinate with each other at a quarter of a million each, they would need each other to get to that level of $1 million for it to make sense,” he said. “In 30 years, we’ve not had anyone invest more than $1 million in a downtown project, but that’s what we have now.”

Despite the evidence for assisting Flo’s through TIF funding, Bosanic said the DDA still needs to err on the side of caution and pointed to two downtown buildings being taken off the tax roll within the past year as a sign that tax funding isn’t plentiful.

“The DDA has obligations,” he said. “We are paying off a bond of a streetscape that benefits everyone, including this property (Flo’s). We have a debt obligation that we have to meet. But I think frugally, and rightly, the DDA is saying it wants to be a partner, it wants to reflect this view to the business community that we want others to be successful. You have rightly determined your threshold at 50 percent as a reasonable number that you can commit, given your financial status.”

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