FLINT, MI -- The company planning to redevelop the former Buick City complex in Flint is asking the city to approve a brownfield plan that would provide more than $70 million in captured taxes as it begins the laborious task of heavy construction in an environmentally sensitive area.
Ashley Capital, which is scheduled to close on the purchase of 273 acres of the site on July 30, said the adoption of the brownfield plan, the first step in capturing future taxes generated by the development, is critical for the project to continue.
The plan must be approved by the City Council. Mayor Sheldon Neeley told MLive-The Flint Journal that he’s endorsing it.
“After two decades of dormancy, we are very excited to have a new industry activating the Buick City brownfield,” Neeley said in a statement issued by the city. “The city of Flint will reap the full benefits of the new taxable value created by (the first phase) of Ashley Capital’s Flint Commerce Center ... with no tax incentive.”
State law allows for a brownfield designation on land and buildings if they are environmentally contaminated, blighted, or functionally obsolete. As an incentive for redevelopment, the Brownfield Redevelopment Financing Act of 1996 allows for tax increment financing, a method of capturing future taxes to reimburse developers for extra costs incurred due to environmental issues.
In Flint, Ashley has proposed a plan that would capture $70.7 million during the second phase of construction on the property it intends to buy. The plan calls for capturing 80% of incremental taxes instead of 100%, which is allowed by statute.
Senior Vice President of Ashley Capital Susan Harvey said that the company utilized a similar brownfield plan at the former Hazel Park Raceway, which became the Tri-County Commerce Center.
Ashley’s plans at Buick City call for an investment of $300 million over time to develop a new industrial park and it broke ground on the first building in the Flint Commerce Center earlier this month.
The first building in the center is considered the first phase of the redevelopment plan and isn’t a part of the proposal.
Ashley’s plan estimates that once completed, the first phase of the development is expected to generate approximately $433,000 in new taxes, $190,000 of which will earmarked for the city. The plan assumes tax captures during the second phase of the project will start in 2026.
By 2037, after constructing seven more buildings during the second phase, Ashley estimates it will have captured $70.7 million through the brownfield plan. The current taxable value of the 273 acres is $549,000, resulting in $17,000 in city taxes.
Harvey said the Buick City site, which once produced every Buick built by General Motors, was left in worse condition than a typical brownfield. While the company demolished buildings after ending vehicle manufacturing in 1999, it left behind building slabs, foundations and underground utilities.
The site contains soil and groundwater contaminated with various petroleum products, chemicals and metals, according to the U.S. Environmental Protection Agency.
It is also one of more than 230 properties in Michigan where the state says PFAS -- a family of man-made “forever chemicals” -- has polluted groundwater at elevated levels.
Because of those and other issues on the site, the city, Genesee County, the Charles Stewart Mott Foundation and the state of Michigan have pledged $17 million specifically for tearing out GM’s infrastructure.
GM abandoned Buick City during its bankruptcy in 2009 and a court trust -- Revitalizing Auto Communities Environmental Response (RACER) -- was created to manage it and properties like it.
The trust was tasked with remediating and containing pollution on the property and marketing it for future redevelopment, but its work didn’t bring the site into a construction-ready condition.
“The RACER Trust’s job is to contain and make the site safe as-is,” Harvey said. The company still must pay for additional development costs as well as environmental costs resulting from construction and site preparation.
The Ashley plan says examples of brownfield-eligible activities include the replacement of groundwater wells destroyed during construction, management of contaminated soil and groundwater generated during construction, testing and disposal of disturbed soils and groundwater, and the installation of vapor barriers in new buildings.
Neeley said thousands of new jobs and increased tax revenue -- even after a tax capture -- depend on the project.
“The city of Flint ... looks forward to capturing 20% of the new taxable value created by Phase 2 of the redevelopment plan,” he said. “Without this redevelopment opportunity, we would continue to see a blighted brownfield where we once had economic opportunity, generating no taxable value for the city of Flint whatsoever. This is a huge win for the Flint community, and we look forward to increased economic stability on Flint’s north side as a result.”
A city spokeswoman said the Neeley administration expects the brownfield plan to be sent to the City Council’s Finance Committee on July 19. If the plan is approved by the committee, it could be given final approval in August.
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Read more at The Flint Journal:
Flint’s Buick City site is back in business but these 4 hurdles still face developer
Trust that owns Buick City site looks for PFAS solutions in contaminated lagoon
GM left Buick City in worse condition than a ‘normal brownfield,’ buyer says