Meeting Overview: Kalamazoo City Commission Temporarily Exempts Two Properties From Taxes

On Monday, October 3, the Kalamazoo City Commission discussed, then voted to adopt two resolutions by not collecting the total property tax on property development projects.

On Monday, October 3, the Kalamazoo City Commission discussed, then voted to adopt two resolutions by not collecting the total property tax on property development projects. The commission also heard the first readings of three ordinance changes. One change dealt with Kalamazoo College zoning and the other two “housekeeping” changes with moving the Wellhead Protection Ordinance (“overlay”) from the Zoning Ordinance to the Public Services Department.


Finally, the commission presented a proclamation declaring Henrietta Lacks Day in the City of Kalamazoo, and the city hall lights set to purple in remembrance.


The property tax freeze helps make it financially feasible to rehabilitate rather than demolish a downtown building. Located at 215 E. Michigan Ave near the Wine Loft and across from Benny DiCarta’s, this former bant, vacant since 2013, is asbestos-laden and described as “tired and functionally obsolete”.


The Treystar property development company states that rehabilitating and modernizing this building will make financial sense if the property taxes are frozen at their current rates for 12 years using the “Obsolete Property Rehabilitation Act” exemption program defined by the state of Michigan.


Treystar is planning to spend $4,200,000 for the building and its rehabilitation, so this can be the home of a new “Barrio Tacos + Tequila + Whiskey” and the fourth Barrio Tacos concept in the State of Michigan.


With this plan, Treystar can afford to fix the buildings and help activate the Haymarket area into a vibrant downtown neighborhood.


The overall feeling is that if Kalamazoo does not do this, the building will remain vacant, and Kalamazoo will only receive the taxes for empty buildings. With this plan and its frozen property taxes over the 12 years, Kalamazoo will not collect an estimated $393,946 in additional taxes for this vacant building. However, in the 13th year, Kalamazoo will receive all the property tax on vastly improved construction and a vibrant downtown neighborhood.


The other tax item was a 12-year tax exemption for a new Zoetis, LLC facility at 2605 East Kilgore Road, near the Kalamazoo / Battle Creek International Airport. Zoetis is requesting a 12-year “Industrial Facilities Tax Exemption Certificate” for the new 53,000-square-foot manufacturing facility totaling $95 million, of which $57,567,482 is the actual building construction and design cost. This property tax exemption would be for this $57 million building over 12 years. The property tax breaks have at least 59 high-paying jobs over the next three years.


There’s an estimation that Zoetis LLC will save over $10 million, and the city will not collect a bit over $2 million in property taxes over the 12 years.


Other items approved in the meeting were $908,000 for activated carbon powder and $114,348 for odor suppressant chemicals, both for wastewater treatment.


There were “first readings” for three items that will have their final public hearing and vote on October 17. The first is an updated zoning map and Master Plan Agreement for the Kalamazoo College Campus. Next are a pair of “housekeeping” changes centering on the Wellhead Protection ordinance. Currently, Wellhead Protection is under the Zoning Ordinance. However, this belongs under the Public Services Department because wellhead protection crosses multiple city boundaries and the measurement responsibility and any enforcement come from the Public Services Department.


Finally, a proclamation remembering and celebrating Henrietta Lacks without the knowledge provided samples of cancer cells that led to numerous discoveries in cancer, immunology, and infectious disease, including polio and COVID vaccines. Kalamazoo School Board trustee Jermaine Jackson, the great-grand-nephew of Henrietta Lacks, accepted the proclamation.