City passes tax abatement policy for business development
MARSHALL — It started with a Marshall landowner’s request for a city property tax abatement. Now, the city of Marshall has some official guidelines to address abatement requests — and they’re open to a whole range of private development projects.
At the Marshall City Council’s regular meeting Tuesday night, council members voted to approve a draft tax abatement policy for development projects.
Having a general city policy concerning tax abatements is a fairly common practice, said Marshall City Administrator Sharon Hanson.
“I think it’s good practice to have something written,” she said. The policy will help guide the Marshall Economic Development Authority and the city when handling requests.
The story behind the draft policy goes back a couple months, said Marshall EDA Director Tara Onken. In early November, the owner of land near the Red Baron Arena and Expo approached the city, and asked for a tax abatement to help with developing a possible Hampton Inn & Suites.
“The council at that time recommended that we start to draft an abatement policy,” Onken said. An earlier draft focused on lodging businesses, but after more discussion the council said the policy should be expanded to include all types of businesses.
“We went ahead and updated a draft. We looked at many examples from many other communities,” Onken said Tuesday. The process involved multiple meetings with the EDA and city staff, she said.
Under the draft policy presented Tuesday, Marshall may grant city property tax abatements for a period of up to 15 years, for private development projects that would enhance Marshall’s economic base, redevelop commercial and industrial areas, or create opportunities for affordable housing.
“This policy would open it up to all businesses or commercial industry, and it refers to state statute throughout,” Onken said.
The Marshall Economic Development Authority would administer the abatement program, but the city council would need to take action to approve or deny a request, the policy said. Applying for an abatement would involve a written application and an application fee.
“Each request would still be reviewed on a case-by-case basis,” Onken said.
Tax abatements wouldn’t be allowed on properties that are already in a Tax Increment Financing district.
Hanson and Onken said the policy was a little different from the one council members approved last year, for tax abatements on new housing development.
Council members voted 4-2 to approve the policy. Council members Russ Labat and Glenn Bayerkohler cast the votes against.