Overview of Public Act 231Overview of Public Act 231as a Tool for Community as a Tool for Community

Economic Development and to Economic Development and to Promote Healthy and Promote Healthy and

Affordable Food Options in Affordable Food Options in MichiganMichigan

Robert G. Craig, DirectorRobert G. Craig, DirectorAgriculture Development DivisionAgriculture Development Division

Michigan Department of Michigan Department of AgricultureAgriculture

Lansing, MichiganLansing, Michigan 20092009

Michigan Has a Variety of Michigan Has a Variety of Retail Supermarkets and Retail Supermarkets and

Grocery StoresGrocery Stores

““A city without chain grocery stores”A city without chain grocery stores”National retailers are steering clear of Detroit, leaving National retailers are steering clear of Detroit, leaving independent grocers to serve the city's hard-hit independent grocers to serve the city's hard-hit residents.residents.

““Hunger hits Hunger hits Detroit's Detroit's middle middle class”class”

Food has long Food has long been an issue in been an issue in this city without this city without a major a major supermarket. supermarket. Now demand for Now demand for assistance is assistance is rising, affecting rising, affecting a whole new set a whole new set of people.of people.

Food retailers also Food retailers also needed in rural areas 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 StoreNewly Remodeled Alden Store

PA 231 amends PA 231 amends Commercial Rehabilitation Commercial Rehabilitation

ActAct Michigan Dept. of Treasury Michigan Dept. of Treasury

administers the property tax administers the property tax exemptions included in Commercial exemptions included in Commercial Rehabilitation Act Rehabilitation Act that provides that provides commercial property tax commercial property tax incentive for up to 10 years.incentive for up to 10 years. More information, forms and More information, forms and instructions are provided by them at instructions are provided by them at their Website: their Website: www.michigan.gov/propertytaxwww.michigan.gov/propertytax

exemptionsexemptions Additional information program is Additional information program is

also available from Michigan Dept. also available from Michigan Dept. of Agriculture Website at: of Agriculture Website at: www.michigan.gov/mdawww.michigan.gov/mda . .

Economic Impact of New Economic Impact of New Retail Food Stores in Retail Food Stores in

Michigan’s Food DesertsMichigan’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 MSU Product Center April 2009 Paper, Paper, Economic Impact of a Economic Impact of a SupermarketSupermarket: : Total economic impact estimated to $42.6 million and total employment increased by 151 for a single supermarket.

PA 231 Definition of PA 231 Definition of “Underserved Area”“Underserved Area”

Means an area determined by Means an area determined by the Michigan Dept. of the Michigan Dept. of Agriculture that contains a low Agriculture that contains a low or moderate income census or moderate income census tract and a below average tract and a below average supermarket density, supermarket density,

An area that has a An area that has a supermarket customer base supermarket customer base with more than 50% living in a with more than 50% living in a low income census tract, orlow income census tract, or

An area that has demonstrated An area that has demonstrated significant access limitations significant access limitations due to travel distance.due to travel distance.

What if Our Site is Not Qualified What if Our Site is Not Qualified Underserved Area on the List Underserved Area on the List and Map of Census Tracts?and Map of Census Tracts?

The qualified retail food The qualified retail food establishment developer must establishment developer must show to MDA that they’re in “an show to MDA that they’re in “an area that has a supermarket area that has a supermarket customer base with more than 50% customer base with more than 50% living in a low income census tract”living in a low income census tract”

MDA requests MSU Product Center MDA requests MSU Product Center to review confidential supermarket to review confidential supermarket customer base study and advise.customer base study and advise.

MDA based on its internal analysis MDA based on its internal analysis of supermarket customer base of supermarket customer base study and MSU recommendation, study and MSU recommendation, MDA may decide that it is in an: MDA may decide that it is in an: Underserved Area. Underserved Area.

If so, then the developer meets a If so, then the developer meets a key requirement for tax incentivekey requirement for tax incentive..

Qualified Retail Food Qualified Retail Food EstablishmentEstablishment

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 Qualified Retail Food Establishments - Requirements- Requirements

Qualified Retail Food Qualified Retail Food Establishments under Establishments under

Commercial Rehabilitation Act Commercial Rehabilitation Act (PA 210 of 2005)(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?Questions?