A Taxing Development

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Carlson notes that it is smaller developers like him, those who work on projects costing $5 million or less, who are most likely to have to make sacrifices in the quality of their work. Large, out-of-state developers who work on large-scale projects are likely to be unaffected. "Because a lot of Ann Arbor buildings are small buildings, larger developers won't come in and do those small jobs," Carlson says. "We'll have to make some compromises."

Though brownfields have attracted outside developers, those projects haven't always gone well. None of the three approved brownfield projects listed on the city's website--William Street Station, 200 South Ashley, and Broadway Village at Lowertown--has been built. The Broadway Village site, on Maiden Lane, remains a vacant lot--despite $96 million in promised brownfield funding and a $20 million equity investment from the state pension fund.

As with historic preservation, homegrown brownfield projects have been more successful. The highly visible Zingerman's Deli expansion is currently using the credits to offset $1.2 million of a $6.7 million budget. A TIF credit--which won't be affected by the state changes--is kicking in another $800,000.

According to managing partner Grace Singleton, the cost of upgrading infrastructure while putting a major addition on the historic deli meant the brownfield credits were integral to their planning process. "Without the credits we wouldn't be building the same project," says Singleton, "and it's possible that we would have taken an entirely different approach to our expansion."