Ypsilanti City Council gives Stewart Beal-owned company a second chance on tax break despite late tax payments
The Ypsilanti City Council opted not to yank a tax abatement from the Stewart Beal-owned Go Downtown! after the development company twice paid its taxes late.
Per city policy, any company or person approved for an Obsolete Property Reduction Act (OPRA) abatement can't pay their taxes late more than once. A second delinquent account can result in the city revoking the abatement.
Council opposed revoking the abatement by a vote of 5-2 at its Dec. 7 meeting. Council Members Brian Robb and Ricky Jefferson supported the resolution, but the issue is coming up for reconsideration at council's meeting on Tuesday.
Go Downtown! owns the building at 208 West Michigan Ave., which has retail space on the ground level and lofts on the second and third stories. The lofts are part of a successful three-building residential project connecting 208 West Michigan with two buildings to the east owned by Maurer Management and George Fotiadis.
Go Downtown! was late paying taxes due in September 2009 and 2010, but both bills were paid in full within three months. The eight-year abatement, which council approved in 2004, has provided Go Downtown! with an $83,000 tax break. The company will save an additional $40,000 before the OPRA expires in 2012.
The state approved the OPRA legislation in 2003. It works by freezing a building’s value at the time an abatement is passed for up to 12 years. Developers are exempt from paying certain millages, which provides an incentive to rehabilitate old buildings.
The building at 208 West Michigan Ave. is 123 years old and one of eight OPRA abatements in the city. Beal also has an OPRA exemption set to expire next year on the Thompson Block building.
This is the first time any property owners have been late twice, although others have been late once.
Normally, property owners pay their taxes to the Washtenaw County Treasurer’s Office, which distributes money to the local municipalities. Even if a property owner is late on their taxes, the county will still pay the municipalities, unless there’s a tax abatement such as an OPRA.
Ypsilanti developer Stewart Beal
Because of the OPRA, the city must collect taxes directly from the property owner. If the payment is late, the city must go to court to or employ a collection agency. Part of the reason council adopted the policy is to urge developers to pay on time and avoid such a situation.
Dave Murabito, a manager with Go Downtown!, spoke in front of council at the meeting. He said the lofts have been successful but “the retail portion could best be described as a disaster.”
He told council Go Downtown! didn’t have the resources to pay the taxes on time, and money was shifted from other companies under Beal's umbrella. Without the tax break, Go Downtown! would likely foreclose on its property, put the Ypsi Studio fitness center occupying the 208 West Michigan storefront out of its home and affect the loft project with its neighbors, Murabito said.
“I know that we have caused the city a bit more in time and resources than they would have liked to allot … but I’m asking council to support downtown,” he said.
Jefferson asked what assurances Go Downtown! could provide council that it wouldn’t be late again.
“Filling one more of those commercial storefronts would make this thing very easy to manage, but until then it will be a struggle,” Murabito replied, although city records indicate there is only one commercial storefront, which is occupied by the Ypsi Studio.
Mayor Paul Schreiber asked council to vote no on the resolution because it could lead to another vacant building downtown.
“The harm to the city was cured by Go Downtown! paying their taxes,” he said after the meeting. “If we revoke the OPRA, the project goes from barely breaking even to not breaking even at all. As Mr. Murabito said, they could face several issues, and possibly the loss of property or foreclosure. And we’ve already got issues with that.”
Robb said revocation over late payments was part of the deal, and council should either enforce it or scrap the policy.
“If we adopt policy then we ignore policy, then it totally weakens council because we don’t mean what we say,” he said.
Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at news@annarbor.com or 734-623-2530.
Comments
delorean
Tue, Dec 21, 2010 : 3:56 p.m.
@ShadowManager - I just clicked on your name and you are literally hating on every article written about Ypsilanti!!! I have to question, do you actually have a job? Are you even contributing to Ypsilanti? Someone must have done a number on you for you to be so negative on everything going on in Ypsilanti. Or, are you a failed business owner who didn't have what it takes to survive in this economy?
delorean
Tue, Dec 21, 2010 : 3:51 p.m.
So, I'm curious what all the "Anti-Beal" people on here do for a living? What do you do for "your city"? Do you employ 20 people who live/work in the city of Ypsilanti, so they can pay their taxes on time? Did you earn multiple city/county/state awards last year because of your entrepreneurial skills and efforts at renovating foreclosed properties? Specifically aimed @ShadowManager - it's funny how your picture says "I hate everything" clearly that is the case. You say "Any day now, any day now" did you not read the part about how the taxes are paid in full? Or were you to overcome with your miss-directed hate to see that part? I would be extremely curious to know if you have ever done a "positive" thing for Ypsilanti to have your name placed in "Positive Ink". 208 West Michigan used to be a pornography shop - is that the one thing you "Dont Hate" and that's why you're so upset? Beal has renovated 38 properties in Ypsilanti - last year alone. Turn any corner in Ypsilanti and what do you see? More than likely it's a Beal Properties sign on a property that was once decrepit, run down and in foreclosure. And guess what happens when a property is in foreclosure? NONE of the taxes get paid. You're so capable of spewing your hate venom on here - why don't you try to be that positive influence that Ypsilanti needs? You specifically ask what Stewart Beal has done for Ypsilanti...I will gladly list a few - just for you: renovated 38 properties, providing 20+ jobs for Ypsilanti residents, paying his taxes IN FULL, providing business for local businesses, providing business storefront for local businesses, providing an immediate response at 3am to the devastating Thompson Block fire and oh yes - staying positive and in business despite negative nay-Sayers with nothing but hate flowing through them for anyone doing something with their lives, such as yourself. To everyone talking about the Thompson Block - last I checked this article had nothing to do with the Thompson Block. And to the person, who said no work is being done, clearly you haven't seen how the shoring has been pushed back...or how the interior bays have been cleaned out...or how masons have been onsite stabilizing the structure...or that Beal was stunted in performing work for months and months. I would love to see any of your tax statements to see how many of you paid your taxes in full and ahead of time. You people should be ashamed of yourselves and be thankful that an entrepreneur who still gives a damn about Ypsilanti is investing in "your city". Warmly, Keri Firestone (since I don't hide behind pseudo names)
Dot
Tue, Dec 21, 2010 : 3:18 p.m.
LC - "As long as he eventually pays is good enough for me and should be good enough for everyone else too" Seriously? If it's good enough for you it should be good enough for everyone else!! And you are who, LC?
Rob Pollard
Tue, Dec 21, 2010 : 2:57 p.m.
WaterTower: The way I understand it from reading the story is that, while 208 Michigan is fully leased (there only is one storefront, and it occupied), Beal seems to be taking money from one part of his businesses to pay for a different part (i.e., "money was shifted from other companies...) and the comment, "Filling one more of those commercial storefronts..." means one of the OTHER vacant storefronts that Beal owns - not 208 Michigan. So it appears Beal used the 208 money to pay another of his property's bills (e.g., one that is vacant) and when it came time to collect for 208, the money wasn't readily available b/c it was already disbursed. That's legal, but it's confusing. In short, according to his rep, they are suffering cash flow problems. 208 Michigan Ave is just one pea of the struggling pod that is Go Downtown!.
ShadowManager
Tue, Dec 21, 2010 : 2:55 p.m.
Hmmm. This has got me to thinking. There's alot of ink on Stewart Beal, but not much positive... What...EXACTLY...has Stewart Beal done for Ypsilanti? Other than get in long drawn out lawsuit regarding decrepit properties that are a public nuisance, and, not pay his taxes on time?
LC
Tue, Dec 21, 2010 : 9:33 a.m.
For as much as Mr. Beal has done in Ypsilanti, even three strikes in unfair. As long as he eventually pays is good enough for me and should be good enough for everyone else too.
Elaine F. Owsley
Tue, Dec 21, 2010 : 9:21 a.m.
Depends on how much rope they are willing to give these guys. How about using the three strike rule?
LC
Tue, Dec 21, 2010 : 9:03 a.m.
This is a slap in the face to Beal. For everything he's done for Ypsilanti, the city should be bending over backwards for him. It makes sense to give him another chance. It makes even more sense to waive all of his taxes entirely. Not everyone is against you Mr. Beal. There are plenty of people out there who think you've done enough and deserve a few more breaks.
Jimmy McNulty
Tue, Dec 21, 2010 : 8:16 a.m.
Don't forget, Beal gets a free pass in Ypsilanti. He can pay his taxes as late as he wants with no repercussions as well a own a vacant uninsured property (Thompson Block). Also, he can block Cross and River streets at will and get all the time he needs to drag his feet on the renovation of that eyesore. Who dares to say NO to him?
Steven Hill
Tue, Dec 21, 2010 : 6:20 a.m.
when you buy a property you don't "agree" to pay the taxes on time and when you are granted a tax abatement like this one you don't "agree" to pay the taxes on time. The Ypsilanti City Council passed the ordinance in question after the tax abatement was put in place. Granted the taxes should be paid on time but WaterTower you are not correct to say "Beal agreed to pay his taxes on time. Once again Beal doesn't live up to an agreement he signed and now Beal doesn't want the rules to apply to him"
ShadowManager
Mon, Dec 20, 2010 : 11:52 p.m.
Stewart Beal : The Ypsilanti City Council's favorite charity. Maybe they are just waiting for him to get all those great businesses up and running in the Thompson Block so he can come up with the money. Any day now, any day now...
WaterTower
Mon, Dec 20, 2010 : 10:55 p.m.
Lorie, Since you are the explainer of all things in the City, explain something. Beal says the residential lofts at 208 are full but Beal's manager says he needs one more retail space to fill in order to be able to pay his taxes. Beal has the retail space at 208 leased to Ypsi Studio. In fact the entire building is leased and full, but Beal still can't pay the taxes on time. What Beal says he needs to pay his taxes on time is for a different building in Ypsi to lease so he can pay his bill for 208 on time. So even with the building full and leased, Beal can't pay his taxes for that building. Beal got a special deal for reduced taxes and in return Beal agreed to pay his taxes on time. Once again Beal doesn't live up to an agreement he signed and now Beal doesn't want the rules to apply to him. It would be different if Beal had of come to the City and said I am having problems paying the bill and I need help but he didn't. If you are one of the Mayor's special friends, you get special privileges. If you aren't a friend of the Mayor, you are hit with $250 fines and fees for putting the trash out early.
AndyYpsilanti
Mon, Dec 20, 2010 : 4:29 p.m.
While "Rules are Rules", this abatement was put in place to help spur downtown development, and it has done that. Maybe not to the extent we would like, but Michiganders can't be choosers, we're too busy being beggars at the moment. Keeping this agreement in place is the right thing to do for our Downtown right now, even if it is not what we would choose, given ideal circumstances. Likewise, using this issue to "send a message" to Mr. Beal about the Thompson Block would be dangerous and reckless. After all, had the city negotiated in good faith with Mr. Beal and made every effort to cooperate instead of trying to force things through the courts, and had Mr. Beal failed to honor such an agreement, we would be on the firm legal footing we would need to move forward with demolition. Now, with Historic Building tax credits in place, we will likely be waiting until those expire to see demolition. Hopefully, though, with Depot Town seeing such an upswing in occupancy of late, Mr. Beal will find the backing he needs to move forward. We're stuck on this one, folks. Even if you're a Beal hater, I think you have to admit risking further damage to downtown's business district just to prove a point is pretty fool-hardy.
MorningGirl
Mon, Dec 20, 2010 : 3:04 p.m.
Mix and The Rocket are downtown and are doing well thus far. And the other businesses mentioned are within city limits and therefore are valid examples for this discussion. As someone pointed out, the taxes WERE paid. I applaud council for looking at the big picture and not just saying "These are the rules." Would it be better to have a vacant storefront and to kick out tenants than to accept a late payment? I don't care a whit about Beal, but I care about Ypsilanti. That's what matters. I have found Ms. Doom to be awesome at her job and an asset to Ypsilanti. The worst thing about Ypsilanti is not the council, the government, the taxes... it's the complainers. Every town has its problems, and we have a lot of great businesses, activities, and people here. I feel sorry for people who have to live where they are not happy. If they could move somewhere they liked, it would be a win/win.
pseudo
Mon, Dec 20, 2010 : 2:35 p.m.
@Midtowner...um, perhaps you forgot, we have a weak mayor system of government. He gets a vote but has clearly not been in the majority votes on anything Beal for a very long time. Again, this is an appropriate response to adverse economic conditions and a downtown that has been positively affected by having an expanded Ypsi Studio where it is. That said, the commenters here seem to have forgotten that council has been clearly uncooperative with Mr. Beal - going so far as to tell him that he as no credibility at the council table. So, I have to believe this decision was based on the merits and by weighing the consequences of not cooperating. Again, good move on council's part. (yes, I said that).
Mark Boone
Mon, Dec 20, 2010 : 2:19 p.m.
http://www.annarbor.com/news/engineers-report-thompson-block-masonry-could-topple-into-cross-street/
Olive
Mon, Dec 20, 2010 : 2:12 p.m.
I wish Beal would pay taxes on other properties he owns in Ypsilanti. The city could use the $$.
Cash
Mon, Dec 20, 2010 : 2:08 p.m.
Ignatz, "It all depends on the owner and other conditions. Beezy, the Greffs and the Frenchs might disagree with you." Except that Beezy's is the only one of those businesses in downtown Ypsi. ________ Slider, "Since Beal is my landlord, I'm assuming I'll never be penalized now for paying my rent late. That's how this works, right?" Good point. Good luck with that one!!
Jonathan Ames
Mon, Dec 20, 2010 : 1:37 p.m.
Mark Boone, will making this guy pay more taxes at 208 W. Michigan fix the cracks in the Thompson Block? That seems to be what your comment is suggesting. Also if you read other AnnArbor.com articles about the Thompson Block your questions would be answered quickly.
Julia Collins
Mon, Dec 20, 2010 : 1:27 p.m.
As the owner/director of Ypsi Studio, my heart sank when I read this article. As someone who has worked tremendously hard to keep a really positive business downtown, it also makes me heartsick to hear people be so negative about my hometown. Paying taxes late (less than 2 months is my understanding)is not really the same as not paying taxes at all. So assessing a penalty that results in a prohibitively high rent for the tenant is akin to throwing out the baby with the bath water. This is an exceedingly emotional issue - I sense it is personal to some extent and that may skew good sense. Reading comments like "if (businesses) are going to fold, do so quickly so I don't have to read about it" stings! I stay open in an immensely competitive market because I have loyal/dedicated clients & patrons who appreciate what I and my amazing employees do, love the community & support their own wellness. To be flip about closing a business hurts - I can only imagine the pain of that decision. My sincere hope is that cooler heads prevail. Julia Collins
Mark Boone
Mon, Dec 20, 2010 : 1:17 p.m.
Bottom line on The Thompson building-It's not just an eyesore. It's unsafe. I can see the cracks in the building getting worse and worse. I drive by the building a minimum of 2 times a day and there is nobody ever doing any sort of work on it. It's a safety hazard and if the city let's it fall on somebody I am concerned that we taxpayers may be holding a bill for a lawsuit Our Historic District Commission has the authority to call this Demolishment by Neglect yet they say nothing. I've no idea why this travesty of tolerance and exceptions is going on but I have to suspect there is much more to this story than we are being told..
Jonathan Ames
Mon, Dec 20, 2010 : 1:13 p.m.
denniso800, slider, Your comments don't take into consideration that based on what the article says, the taxes have been paid. If they are now current, all penalties, interest and late fees would have to be paid to bring them current.
Ignatz
Mon, Dec 20, 2010 : 12:54 p.m.
@glimmertwin: It all depends on the owner and other conditions. Beezy, the Greffs and the Frenchs might disagree with you.
Slider
Mon, Dec 20, 2010 : 12:33 p.m.
This is great news. Since Beal is my landlord, I'm assuming I'll never be penalized now for paying my rent late. That's how this works, right?
glimmertwin
Mon, Dec 20, 2010 : 12:30 p.m.
I'd be lying if I said reading about the misfortunes of Ypsilanti's businesses was not troublesome. If all of these places, the bars, retail areas, Thompson Block, Water Street, and other businesses are going to fold, please do so more quickly as to save the residents from having to read about it - constantly. If there is anything I've learned by following all of these stories it is not to try to open a business in Ypsilanti. It seems nobody can succeed, or they aren't smart enough to find a better location.
CountyKate
Mon, Dec 20, 2010 : 12:25 p.m.
@kittwinds, it's not Sharon Doom's fault that this is happening, so I don' t know why you're bringing her name into this. She has to follow the policies made by City Council. Don't fault the assessor for following the laws made by others. I agree the taxes in Ypsilanti are exorbitant, but that is not Ms. Doom's fault. You can blame the voters who never saw a millage they didn't like. You can blame the city's lawmakers. But don't take it out on a hardworking employee who has to follow the rules set down for her.
denniso800
Mon, Dec 20, 2010 : 12:24 p.m.
Doesn't anyone realize that this is the SAME Beal we (the people who actually PAY taxes) gave uh..... FOREVER to do nothing with the Thompson Block too. Must be nice to have friends in high places.
denise1inaa
Mon, Dec 20, 2010 : 12:13 p.m.
I'm betting Beal will be late on tax payments a third time and council will ignore their own policy and let him get away with it. I do not understand why this developer needs and gets so much special treatment... I'm tired of reading about all his problems.
Midtowner
Mon, Dec 20, 2010 : 11:48 a.m.
This looks like another case of the mayor taking care of his friends. I wonder if _I_ was late on my taxes if the mayor would waive my late fees. Isn't there an ethics board that could investigate his behavior?
pseudo
Mon, Dec 20, 2010 : 11:36 a.m.
this is progress on the part of council. I appreciate that they chose to keep a great biz in place (Ypsi Studio Rocks)and allow this company to continue to fill bring more into downtown.
kiltwinds
Mon, Dec 20, 2010 : 11:26 a.m.
Good Old Ypsi, Squeeze the residents for every penny, Thanks Ms.Doom. They turn around and embrace a developer like Beal, and runn off all the developer for water street many years ago. The kind of politics that ran my self and all the other residences that care out, enjoy your student renters College Hieghts nieghbor hood!! The best part is all the houses that claim 100% homestead and are a rental, Ms.Doom get off you high horse and investigate that!!!!!!!!!!!!!