City Attempted to Develop Land for Economical Development
In City of Alpena v. State Tax Commission, Michigan Court of Appeals, No. 300833, February 14, 2012, property that was purchased by a city to expand its economic base by increasing commercial and industrial development was entitled to a local Michigan property tax exemption because it was used for a public purpose in the tax years at issue. The Tax Tribunal's decision which determined that the property was used for a public purpose was consistent with the rule articulated by the Michigan Supreme Court in Mt. Pleasant v. State Tax Commission, 729 N.W. 2d 833 (2007).
The city's efforts to ensure success of the property's economic development included partially improving the land, obtaining permits and samplings to make private investment less burdensome, creating plats, maps and varying development plans, conducting innumerable meetings to discuss future strategy, offering financial incentives to prospective purchasers, and actively marketing the property. These acts fell squarely within what the Mt. Pleasant court considered as relevant acts establishing that the property was used for a public purpose.
The State Tax Commission asserted that the property remained vacant and unimproved for one of the tax years and had not been put to any use whatsoever. However, nothing in Mt. Pleasant required that a city have succeeded in its plans for economic development by the time any dispute arose over the taxable status of property receiving the benefit of the tax exemption. In this case, the city's plan was not merely aspirational. The city made attempts to develop and improve the land, including obtaining estimates for roads and utilities and accepting a bid from a contractor to install utilities. The city also sold at least one parcel. Therefore, the property was properly listed as exempt.