Overview of Public Act 231 as a Tool for Community Economic Development and to Promote Healthy and Affordable Food Options in Michigan Robert G. Craig, Director Agriculture Development Division Michigan Department of Agriculture Lansing, Michigan 2009 Michigan Has a Variety of Retail Supermarkets and Grocery Stores “A city without chain grocery stores” National retailers are steering clear of Detroit, leaving independent grocers to serve the city's hard-hit residents. “Hunger hits Detroit's middle class” Food has long been an issue in this city without a major supermarket. Now demand for assistance is rising, affecting a whole new set of people. Food retailers also needed in rural areas “Corunna hopes grocery store will fill vacant Brady's building” By NICOLE RAYMOND Argus-Press Intern Wednesday, June 3, 2009 Newly Remodeled Alden Store PA 231 amends Commercial Rehabilitation Act Michigan Dept. of Treasury administers the property tax exemptions included in Commercial Rehabilitation Act that provides commercial property tax incentive for up to 10 years. More information, forms and instructions are provided by them at their Website: www.michigan.gov/propertytax exemptions Additional information program is also available from Michigan Dept. of Agriculture Website at: www.michigan.gov/mda . Economic Impact of New Retail Food Stores in Michigan’s Food Deserts MDA estimates 20 new grocery stores statewide over next 2-3 years yielding $852 million in sales and total employment increased by 3,020 jobs. Initial capital investment and short-term construction jobs not included, but should be considered by state and local leaders with a providing commercial property tax abatement. MSU Product Center April 2009 Paper, Economic Impact of a Supermarket: Total economic impact estimated to $42.6 million and total employment increased by 151 for a single supermarket. PA 231 Definition of “Underserved Area” Means an area determined by the Michigan Dept. of Agriculture that contains a low or moderate income census tract and a below average supermarket density, An area that has a supermarket customer base with more than 50% living in a low income census tract, or An area that has demonstrated significant access limitations due to travel distance. What if Our Site is Not Qualified Underserved Area on the List and Map of Census Tracts? The qualified retail food establishment developer must show to MDA that they’re in “an area that has a supermarket customer base with more than 50% living in a low income census tract” MDA requests MSU Product Center to review confidential supermarket customer base study and advise. MDA based on its internal analysis of supermarket customer base study and MSU recommendation, MDA may decide that it is in an: Underserved Area. If so, then the developer meets a key requirement for tax incentive. Qualified Retail Food Establishment The definition of a “qualified retail food establishment” requires, among other things, that the “…property will be used primarily as a retail supermarket, grocery store, produce market, or delicatessen that offers fresh and frozen USDA-inspected meat and poultry products, fresh fruits and vegetables, and dairy products for sale to the public…” It is the policy of the State Tax Commission that at least 75% of the property (based on sales floor square footage) must be used as a supermarket, grocery store, produce market, or delicatessen, as those types of retail establishments are normally utilized, to be considered “used primarily” as a retail supermarket, grocery store, produce market, or delicatessen. Qualified Retail Food Establishments - Requirements Qualified Retail Food Establishments under Commercial Rehabilitation Act (PA 210 of 2005) Qualified Retail Food Establishments under Commercial Rehabilitation Act may qualify for the tax incentive for the “rehabilitation of” or “expansion” to existing stores. Constructing completely new stores also qualify. Stores that simply “remodel” would not qualify as that tends to be more cosmetic in nature, and not a necessary structural upgrade. Questions?
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