Signature Associates

Industrial development district for ‘flex-tech’ facility being considered by Ann Arbor City Council

A biotechnology company and SPARK Ann Arbor are spearheading efforts to create a city industrial development district to encourage growth and provide a tax abatement for owners in the area.

The Ann Arbor City Council took public comments at its Jan. 3 meeting about the possibility of creating an industrial development district at 3874, 3990, 3886, 3994, 3950 and 3958 Research Park Drive. The land is currently owned by Sartorius BioAnalytical Instruments, Inc., which has plans to create a $57-million facility at 3874 Research Park Drive.

The project, which would consolidate four existing locations of the company, was approved in early October 2020 and is slated to open in 2023. The average age of buildings in the area is 46 years old, with the average age of those slated for development by Sartorius at 56 years old, according to Phil Santer, the senior vice president of SPARK Ann Arbor.

The creation of an industrial development district, also called an industrial facilities exemption, would allow Sartorius to take a 50% tax abatement for up to 12 years.

“It’s a common economic development tool,” Santer said. “It has been underutilized in the city of Ann Arbor over the past decade or so. But it’s not uncommon in many communities in Michigan to utilize it.”

Ann Arbor last approved an industrial development district in 2013 at 1901 East Ellsworth Road. for Mahindra GenZe, an electric bike company.

Although SPARK and Sartorius can petition the council to create a district, the decision ultimately rests with the city, Santer said. A recommendation to create the district could come as soon as this month and could include a decision to expand the district outside of the proposed properties, although Santer said that is unlikely.

“Ann Arbor City Council has not been open to that in the past, so we’re really trying to do it on a per-user basis,” Santer said. “We haven’t even tried to utilize the tool over the past 10 years or so in the city. And this is a chance where it’s like, well, this seems like the right spot, the right time to be able to try to utilize this.”

The development project is also seeking a brownfield grant, which would help offset the cost of environmental remediation of contaminated spaces, of roughly $2 million. Santer said he expects the grants and the creation of the district to be handled simultaneously.

“Construction costs are skyrocketing at this point and in order to encourage any kind of development, any sort of cost savings is going to be helpful for a company like Sartorius to be able to come in and do this work,” Santer said.

Incentivizing industrial development in the area is part of a larger push to create a more walkable and livable area in the south side of Ann Arbor. In addition to the industrial development district, SPARK is also working to create a business improvement zone in the Briarwood Mall area.

The zone, also known as a BIZ and led in part by local real estate company Oxford Companies, would be a collaboration between local businesses to better maintain the area, with a goal of making it similar to Ann Arbor’s downtown area, according to previous reporting.

Having both the business improvement zone and industrial development district would help take the area beyond feeling like “Anywheresville, USA,” Santer said.

“We’ve always looked at the south side entrance way as ripe for opportunity for both companies, for business that are there overall,” Santer said. “We wanted to really focus on letting people know that they’re coming into a place when they enter town.”

Posted By: mlive on January 7, 2022.  For more information, please click here to read the source article.

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