JIM MATTHEWS: Manistee City Council got vote right

TO THE EDITOR:

The May 2 vote at City Council encourages us that more than half our City Council understands the impact that misdirected state and federal spending can have on rural towns like Manistee.

Any subsidized housing project provides rental apartments at substantially below market rate, and expects everyone else in town that pays real estate tax to subsidize it through LIHTC (Low Income Housing Tax Credits), PILOT (Payment in Lieu of Taxes) and tax abatements.

The members of the City Council who vote for such schemes benevolently shift that burden to every other tax payer in the city when they agree. Most citizens are not even aware that these schemes exist, but many businesses make their entire living off of them.

The proposed Senior Center and the 400 River St. projects are somewhat different, but even more alike. Both involve consultants and developers trolling the state agencies for taxpayer money being redistributed in the name of various economic and social programs. These agencies create ways to spend block grants (large sums of federal taxpayer money allocated to the state agencies by the federal government to effect social and economic change) through various programs they create.

Third Coast Development seeks Low Income Housing programs administered by Michigan State Housing Development Authority (MSHDA) for the Oleson’s redevelopment. Hollander is seeking Michigan Economic Development Corporation (MEDC) Development Ready Communities, MSHDA Low Income Housing Tax Credits and possibly tax abatements for up to 12 years for the former Glik’s building project. Both developers are investing minimal amounts of their own capital.

I initiated conversations with two individuals from the MEDC and MSHDA trying to understand how these agencies safeguard a city, such as Manistee, from bankrupting itself by over extending real estate tax burdens through PILOT, tax abatements or by distorting the distribution of population. It was confirmed that they do not consider this. Their award process and audits are purely aimed at the potential success of the developer. The impact the development will have on the community in which it is placed is not considered. In each case they confirmed this is up to the local governing body. In this case, that is our City Council.

The state has deep pockets filled with other people’s money that they can award to developers, and consultants to effect a particular social or economic change with no accountability for the result of the distortion they may create. This is why the victory last week was so important. The City Council got it right that time.

Citizens must continue to guide them, challenge them to see the big picture, make sure they stick to the master plan, and follow the governance protocols that exist to assure integrity of the process. Citizens must stay vigilant;, because, even the individual with the best intentions can make a mistake, and one cannot assume every individual has the best intentions. Please stay engaged.

Jim Matthews

Manistee

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