Audit Finds Sloppy 'Renaissance Zone' Tracking

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Audit Finds Sloppy 'Renaissance Zone' Tracking

CREATED Jan. 24, 2013

Broken down buildings, contaminated sites - not a developer's dream, but with tax incentives they can be.

They're called Renaissance Zones, and many places in communities wouldn't exist without them, but the state is questioning the success of the program after more than 15 years.

Without being deemed a Renaissance Zone, Knapp's Centre's renaissance may have never began.

"You never want to say something would have been impossible," Nick Eyde of Eyde Company Project Developer said. "But it was one of those pieces where we looked at this project, and we said, how do we get this thing done, we saw it as something that is vital to the project, and a critical piece to bringing that building back to life."

Knapp's isn't the only success story in Lansing. The Accident Fund Headquarters on N. Grand Ave. is also thanks to a Renaissance Zone, meaning taxes were waived in order to build on the former Ottawa Power Station site.

"Those two bookend projects, Renaissance Zones are primarily why all of downtown Lansing is completely booming," Lansing Economic Area Partnership President Bob Trezise said.

The Michigan Economic Development Corporation, or MEDC, estimates more than 12,000 jobs have been created with the program statewide, but a new state audit says that can't be verified. Auditor General Thomas McTavish concluded the MEDC's efforts to evaluate Renaissance Zones were ineffective and almost non-existent.

"We're aggressively working to go back through all the years that the Renaissance program has been in place to ensure that all the jobs that have been referenced by the companies and the communities that created those, that they are in fact correct," MEDC President Michael Finney said. "So, we're still working on that."

Experts point out that many Renaissance Zones were granted in extremely rural areas, which could be impacting the data.

"No development happened there, and so I don't think there was a lot of attention, probably not a lot of accountability, and that has skewed the good work of our Renaissance Zones in urban areas that were successful," Trezise said.

The MEDC said in the audit it's making changes to make sure its numbers are more accurate. MEDC is working on a new database to record and organize the job creation reports from all the Renaissance Zones around the state. The report also concluded MEDC wasn't providing an accurate or complete report to the legislature, as it's required to do. MEDC said in the audit it's already taking steps to fix that, too.

The report estimates about $820 million in tax revenue was abated in the program's first 13 years.

The audit only covered the period from October 2008 through September 2011.

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