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Grand Haven council reviews economic incentive policy; staff to return with drafted revisions
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Summary
At a special work session, staff reviewed Grand Haven—s incentive tools (OPRA, commercial rehab, TIF) and proposed policy questions including whether to retain a 7.5% cap, set AMI targets for housing, require equity contributions and how the city uses third-party financial reviews; staff will draft revisions for EDC/BRA review.
Grand Haven—s mayor convened a special work session on April 13 for a detailed review of the city—s economic incentive policy and to collect direction from council on possible revisions.
Assistant City Manager Dana Colaway told council the purpose of incentives is to "maintain some competitiveness for investment" and to encourage development that aligns with the master plan. She reviewed the city—s common tools — OPRA (Obsolete Property Rehabilitation Act) abatements, commercial rehabilitation abatements and tax-increment financing (TIF) — and showed how TIF has increased taxable value on recent downtown redevelopment projects. "The intent is to provide the minimum incentive necessary, capping total incentives at 7.5% of the city's taxable value," Colaway said.
Colaway asked council whether it wanted staff to revisit several policy items: whether to keep the 7.5% cap, whether to tighten or change area median income (AMI) thresholds for housing projects (the policy now references attainable housing at 80—20% AMI), whether to prefer reimbursement of documented hard costs for housing TIFs rather than rent-loss gap calculations, whether to limit the types of incentives offered, and whether to require equity contributions as a percentage of project cost.
Councilmembers pressed staff on two recurring themes: the objectivity and cost of the city—s third-party financial review and whether the EDC/BRA review step could be streamlined. One member said they had "failed to see" the benefit of the paid third-party review and called the overall process "cumbersome"; another countered that the outside review helps avoid internal conflicts and that staff and the finance director work with Plante Moran on drafts before reports are finalized.
Several councilmembers said the policy—s public-benefit scoring and the way abatement years are awarded are too subjective. "Incentives must be awarded in proportion with the degree of public benefit," one councilmember said, and urged clearer, numeric criteria so comparables and scoring are harder to "cherry-pick." Council members also discussed scaling abatement years by project size rather than granting identical terms to a small three-unit building and a 40-unit development.
Colaway said staff will prepare draft revisions reflecting council feedback and return them to the EDC/BRA for additional refinement before bringing a proposal back to council for possible adoption. No formal policy change was adopted at the work session.
Why it matters: The policy governs how Grand Haven subsidizes development and how the city balances taxpayer protection with efforts to attract housing and redevelopment. Any change to AMI targets, caps or scoring could affect which projects qualify for incentives and the scale of municipal support.
What—s next: Staff will draft policy revisions, present them to the EDC/BRA and then return the refined proposal to council for consideration.
