Downtown Business Incentives

For help understanding which incentives might be of value to you, please call Muskegon Main Street at 724-3180.

Tax-Free Renaissance Zone:

The taxes that companies and residents do not pay comprise nearly all the state and local taxes levied on business activity: Single Business Tax (SBT), state personal income tax, six-mill state education tax, local personal property tax, local real property tax, and local income tax.
This tax free status is applicable through 2014. In all cases, the tax relief will be phased out in 25% increments over the last three years of the program. Note: Workers in the zone that live outside the city of Muskegon will pay .5% city income tax. Workers in the zone who live in the city will pay 1% city income tax.

There are three Renaissance Zones within the City of Muskegon. They are pictured at right. To zoom in click on the map.

Brownfield Michigan Business Tax Credit:

Michigan allows qualified taxpayers to claim a credit against the MBT for projects that redevelop contaminated, blighted, or functionally obsolete property provided the qualified taxpayer has a pre-approval letter issued after December 31, 2007 and January 1, 2013 and the project is completed not more than five years after the letter is issued. If the total of all credits for the project is $1 milion or less, the credit is based on 12.5% of the eligible investment. If all of the credits for the project is greater than $1 million but not more than $30 million, a credit is available for a percentage of eligible investment to be determined by the Michigan Economic Growth Authority (MEGA).

If a project is an Urban Redevelopment Project, the credit is up to 20% if the pre-approval letter is issued in 2008, 2009 and 2010. After 2010, the credit for a Urban Redevelopment Project Area is 15%. An Urban Redevelopment Area Project includes Downtowns or Traditional Commerce Centers of Qualified Local Units of Government and County Seats.

This amendment also increases the number of “Large Credits” $1 million or more to 20 projects per year that may be approved by the MEGA. Combines “small” and “mini” allocation to $40 Million per calendar year.

Federal and State Tax Incentives for Historic Buildings:

10% investment tax credit for the rehabilitation of a non-historic, non-residential end-use structure built before 1936.
20% investment tax credit for the certified rehabilitation of certified historic structures.
Note: projects approved to receive 20% federal tax credits may be eligible to receive an additional 5% state tax credit from the state against the Michigan income tax. In late 2008 the State of Michigan made changes to the State Historic tax credit that greatly benefit those rehabilitating historic buildings. Please see the briefing paper, prepared by Plante & Moran, to learn more.

New Markets Tax Credit:

The New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year credit allowance period. In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period.
Note: Projects in Downtown Muskegon are eligible for New Markets Tax Credits. However, New Markets Tax Credits are awarded on a competitive basis.

Community Development Block Grants (CDBG):

Federal funds in the form of state-administered Community Development Block Grants can be used for road, water and sewer improvements necessary for a firm to locate or expand in an area. The amount of the grant depends on the number of jobs created and the amount of private investment. CDBG funds can also be used for streetscape, landscaping and creation of parking lots, alleyways, etc.

Obsolete Property Rehabilitation Act:

This incentive is designed to assist in the development of older buildings, in which a facility is contaminated, blighted, or functionally obsolete. A community essentially freezes the existing taxable value on a designated facility for up to 12 years. By freezing the taxable value, the developer has incentive to make significant improvements to a building without increasing the property taxes on the building. Call the City Planning department 724-6702 for more information.

Commercial Property Rehabilitation Act:

This incentive is designed to assist in the development of older buildings (at least 15 years old), in which a facility is contaminated, or blighted. A community essentially freezes the existing taxable value on a designated facility for up to 10 years. By freezing the taxable value, the developer has incentive to make significant improvements to a building without increasing the property taxes on the building. Call the City Planning department 724-6702 for more information.

City of Muskegon Facade Grant:

This grant is for general facade/storefront improvement and provides up to $5,000. A match is required. You can download an application here. Please refer all questions about this opportunity to the City of Muskegon Planning department at 724-6702.

Downtown Muskegon Low-Interest Loan programs

Downtown Muskegon has partnered with Huntington Bank to promote a Downtown Muskegon Facade loan program provided by Huntington. Click here to learn more about the loan program.