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Marshall eases late penalties for tax abatement applicants

MARSHALL — Property tax abatements were the topic of most of the discussion at Tuesday’s meeting of the Marshall City Council.

Council members not only granted a commercial property tax abatement for the rebuilt and expanded buildings at Southwest Coaches and Southwest Tour and Travel, but gave city staff guidance that could help future tax abatement applicants.

As a result of the discussion, council members voted to remove a 10% penalty from a tax abatement for expansions at a local child care center.

Marshall currently has municipal policies that allow the city to grant property tax abatements for new housing development and for commercial and industrial development. In the time since January, when the council approved the commercial tax abatement policy, some questions have come up over how to apply it, city staff said.

The policy says developers must apply for a tax abatement before any new construction begins on their property. However, the Marshall EDA and the city have gotten some requests for projects that have already been built, Hanson said. In September, the city granted a tax abatement for the expansion of Canoga Park Childcare, but reduced the abatement 10% as a penalty for a late application.

“We know this is a relatively new policy,” that not all businesses may be aware of, Hanson said.

City staff recommended that there be a window of time where abatement applications can be brought forward without a late penalty. Until the end of 2020, applications could be brought forward without a late penalty, for construction that started after the abatement policy went into effect. Starting Jan. 1, 2021, tax abatement applications will have to be made before construction starts, Hanson said.

The proposal got unanimous support from council members.

“I think this is a good decision,” said council member James Lozinski. “It gives us another year to inform the public.”

Hanson said the Marshall EDA board was also recommending that the 10% penalty be removed from Canoga Park Childcare’s tax abatement. Council members voted 5-1 in favor of removing the penalty. Council member Glenn Bayerkohler cast the vote against, and Lozinski abstained.

A request for a city tax abatement for property at 1500 Travis Road was the topic of a public hearing earlier at the council meeting. Southwest Coaches and Southwest Tour and Travel rebuilt and expanded their bus garage after a 2018 fire. While the business was covered by insurance, the insurance payment wasn’t enough to make them whole, said Marshall City Administrator Sharon Hanson.

This year, Southwest Coaches constructed a 28,000 square foot building to house a bus garage and travel agency. Hanson said the proposed tax abatement for the building would be over four years, with an 80% city property tax abatement the first year, a 60% abatement the second year, a 40% abatement the third year and a 20% abatement the fourth year. The total abatement was estimated to be about $24,608.

Council member Glenn Bayerkohler had some concerns about the proposed abatement. The purpose of the city abatements was to encourage new development, he said. Southwest Coaches had rebuilt after the fire.

Marshall Mayor Bob Byrnes responded that the facilities had been expanded, not just rebuilt. It was a reinvestment for the business, he said. “They chose to make it in the city of Marshall.”

Council members voted 6-1 in favor of the tax abatement, with Bayerkohler casting the dissenting vote.

Tom Hey, of Southwest Coaches, said the business had choices when it came to rebuilding the bus garage after the fire.

“But we decided Marshall’s been a really good community to us,” Hey said. He thanked the Marshall community and the council for the support they have shown.

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