To: Martin L. Cousineau, Finance Committee Chairperson
From: Chrystal Simpson, Chief Financial Officer
title
RE: Approval of the MOU with Genesee County Land Bank for collection of settlement funds related to Durant tax loss
recommendation
BOARD ACTION REQUESTED:
Requesting approval to sign the MOU with the Genesee County Land Bank to allow the County to collect funds related to the tax loss for the Durant Hotel
BACKGROUND:
Part of the funding for the redevelopment of the Durant came from debt issued by the Genesee County Brownfield Authority. This debt was secured by the anticipated tax revenue from the Durant and the full faith and credit of the County. The owner of the Durant agreed not to challenge the taxable value of the Durant. However, the agreement was breached when the Durant requested taxable value reductions which reduced the tax revenue available to the County.
DISCUSSION:
The Land Bank has sold its interest in the Durant and as part of the sale agreement and payment received by the Land Bank, it received $508,104 which is the amount of tax revenue the County estimated it would not receive (at the time of the settlement) from 2017, the year of the first improper reduction in taxable value through 2035, when the debt matures.
Within two days of signature on this agreement, the County will receive $161,366 which as the calculated amount of lost tax revenue from 2017 and 2022 due to the reductions in taxable value.
Beginning with 2023 and ending in 2035 each year, by December 15th, the County will invoice the Land Bank an amount not to exceed $26,672 per year for the shortfall in tax revenue received by the County in that year because of the reduction in the Durant's taxable value.
IMPACT ON HUMAN RESOURCES:
N/A
IMPACT ON BUDGET:
This MOU will allow the County to replace the lost tax revenue due to the reduction in the taxable value on the Durant.
IMPACT ON FACILITIES:
N/A
IMPACT ON TECHNOLOGY:
N/A
CONFORMITY TO COUNTY PRIORITIES:
Collectio...
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