The city of Warren encourages quality development and redevelopment of the city’s industrial tax base through the controlled use of IFT’s (Industrial Facility Exemption Certificates) commonly known as tax abatements. These abatements are granted as provided by Michigan Public Act 198 of 1974, as amended, and can entitle a facility to a 50% exemption from ad valorem real and personal property taxes for a period of up to 12 years. This page presents information about the tax abatement process but is not meant to be an all-encompassing guide. A link at the end of this page to a State of Michigan web site provides detailed information on the abatement process as well as a copy of the State required application form 1012 (formerly L4380). Additional questions may be addressed to City of Warren’s Department of Community, Economic and Downtown Development (586) 574-4676.
A. Eligible Facilities
P.A. 198 of 1974 is designed to provide a stimulus in the form of significant tax incentives to industry to renovate and expand aging plants, build new plants, and promote establishment of research and development laboratories and retain employment. Facilities that would qualify are those that manufacture or process goods or materials, with this including that company’s offices, engineering, research and development, warehouse or parts distribution. In 2000, P.A. 198 was amended to also include high-technology activity.
The exemption applies to buildings, building improvements, machinery, equipment, furniture and fixtures. Real property and personal property, owned or leased, are eligible provided the lessee is liable for payments of taxes on the property. Only the specific project named in the application is eligible for an Industrial Facilities Exemption Certificate. Any existing buildings and equipment in place prior to construction of a new facility are not exempt.
A request for establishment of a plant rehabilitation district or industrial development district can only be filed for a proposed facility where construction, acquisition, alteration or installation of equipment has not begun at the time of filing the request.
Applications for facility exemption certificates must be filed not later than six months after the beginning of restoration, replacement or construction of the facility.
Each application must include an agreement signed by the City of Warren and the operator of the facility outlining conditions/recourse to be upheld during the term of the abatement. This agreement includes a required statement that no payment of any kind in excess of the fee allowed by Public Act 198 was made or promised in exchange for favorable consideration of the exemption certificate.
Requesting a tax abatement is a two step process. First, an Industrial Development District (IDD) must be established. The request to establish the IDD must be submitted to the City before the project (building construction or addition, machinery and equipment installation, etc.) is begun. (IDD application is available under FORMS) This process usually takes about a month because a required public hearing must be scheduled before the City Council and proper public notice must be given.
After City Council has approved the IDD, the second step of the process, the application for an Industrial Facility Exemption Certificate (IFT), can begin. In addition to Form 1012 (available under FORMS), the applicant must also submit a signed City of Warren IFT Agreement (available under FORMS). After review of the application by the Economic Development Director and City Assessor, the Mayor makes a recommendation to the City Council on the number of years of abatement (maximum allowable under state law is 12 years). The City of Warren Industrial Facilities Abatement Guidelines, Revised June 2006, are used to make the recommendation (See Abatement Guidelines under FORMS). This part of the process takes about two weeks and requires an administrative hearing before the City Council.
Following City Council approval, the City Clerk sends the application to the State Tax Commission for final approval. State Tax Commission Rule No. 57 states that a complete application (with all required attachments) received by the State Tax Commission on or before October 31 will be acted on by the Commission before December 31 of that year. Applications received after October 31 will be processed contingent upon staff availability.
Other Business Incentives
For the convenience of visitors to this web page, we are providing a link to the State of Michigan web site where there are guides, questions and answers, forms and contacts related to the Industrial Facilities Exemption Certificate, as well as other business incentives such as: Obsolete Property Rehabilitation Act (OPRA), loans, job retention grants, Brownfield Redevelopment, etc. Click HERE to go to the state Web site.
For specific information regarding the City of Warren Brownfield Redevelopment Authority contact the Planning Department at (586) 574-4687.
FORMS (just click on the link left of the form to download the pdf file):
Form A – Application for Establishment of a Plant Rehabilitation or Industrial Development District
Form B – City of Warren IFT Agreement
Form C – Industrial Facilities Tax Abatement Guidelines
Form D – Application for Industrial Facility Tax Exemption — Form 1012