Detroit Mayor Announces Newest Downtown Development Project

1
Detroit Mayor Announces Newest Downtown
Development Project

• www.woodtv.com/global/story.asp?s
• January 6, 2008
• Presented by Akilah Tucker

2
Rockefeller Center of Detroit

• Location Campus Martius Park between Compuware
  HQ and the newly renovated Cadillac tower
• Cost The city has estimated a cost of 150
  million
• Ground Breaking Construction is set to begin in
  September of 2009
• Forecasted Completion Construction is projected
  to end in December 2011

3
Building Highlights

• The two 24-story metal and glass towers will sit
  on top of a twelve story base.
• There will be 84 apartments/condos available
• The buildings base will span a full block and
  include
• 30,000 ft2 market
• 100,000ft2 in retail shops
• 14,400 ft2 health club and spa
• 6 screen movie theater
• A public garden on the main
• level and another on the roof
• A restaurant with a waterfall

4
Is this feasible given current economic climate???
Is this feasible given current economic climate???
Is this feasible given current economic climate???
Is this feasible given current economic climate???
Is this feasible given current economic climate???

• Kilpatrick and the New York based development
  company Northern Group say yes!!
• The city has approved bonds to compensate for
  gun-shy lenders not willing to finance large
  projects in the mist of a nationwide mortgage
  crisis.
• Renters vs. Buyers Rental property along
  Woodard and other areas downtown are thriving at
  90 occupancy. Cadillac centre will have the
  option to sell the units as condos five years
  from the projects groundbreaking.
• The major concern is finding businesses
  interested in occupying the 100,000 square feet
  slated for retail shops. A renaissance zone has
  been established to attract retailers through tax
  breaks.

• Kilpatrick and the New York based development
  company Northern Group say yes!!
• The city has approved bonds to compensate for
  gun-shy lenders not willing to finance large
  projects in the mist of a nationwide mortgage
  crisis.
• Renters vs. Buyers Rental property along
  Woodard and other areas downtown are thriving at
  90 occupancy. Cadillac centre will have the
  option to sell the units as condos five years
  from the projects groundbreaking.
• The major concern is finding businesses
  interested in occupying the 100,000 square feet
  slated for retail shops. A renaissance zone has
  been established to attract retailers through tax
  breaks.

• Kilpatrick and the New York based development
  company Northern Group say yes!!
• The city has approved bonds to compensate for
  gun-shy lenders not willing to finance large
  projects in the mist of a nationwide mortgage
  crisis.
• Renters vs. Buyers Rental property along
  Woodard and other areas downtown are thriving at
  90 occupancy. Cadillac centre will have the
  option to sell the units as condos five years
  from the projects groundbreaking.
• The major concern is finding businesses
  interested in occupying the 100,000 square feet
  slated for retail shops. A renaissance zone has
  been established to attract retailers through tax
  breaks.

5
Will retailers take the bate?

• We must first understand how the state of
  Michigan taxes businesses
• According to the text, Michigan is the only state
  to impose a Value Added Tax
• Value Added Revenue Purchase of Materials
  
• Wages Depreciation
  Interest Rent Profit
• As of January 1, 2008, Michigan changed from the
  Single Business Tax to the
• Michigan Business
• Tax.

6
Michigan Business Tax At a Glance

•   A Better Tax for Michigan Business
• Rewards investment in capital, jobs, and RD
• Reduces reliance on taxing compensation
• Provides small business and personal property tax
  relief 
• The Tax
• Business income taxed at a rate of 4.95
• Modified gross receipts tax (sales minus
  purchases from other firms) at a rate of 0.8
• Banks pay alternate net capital tax (net worth at
  a rate of 0.235)
• Insurance tax rate increased from 1.07 to 1.25
  (current credits retained) 
• Credits for Investing in Michigan
• Investment tax credit for purchase of capital
  assets
• Compensation credit for jobs created or retained
• Research and development credit
• The MBT retains or expands 15 Single Business Tax
  (SBT) credits and adds 11 new credits.
• www.michigan.gov/taxes

7
Once again, Will Retailers Take the Bate? Yes,
as long as revenue is greater than cost.
Profit Revenue 4.95(Value Added) Cost Tax
Credits

• The MBT was set up to encourage businesses to
  come to Michigan.
• Material costs actually work as a sort of tax
  credit
• The success of the Cadillac Centre could be a
  major contributor to the long over-due economic
  turnaround of Metro Detroit.

THE END