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Posted on Wed, Jan 23, 2013 : 5:58 a.m.

Ypsilanti grants Sidetrack Bar and Grill 12-year tax abatement for $1.5M expansion project

By Katrease Stafford

Thumbnail image for Sidetrack.jpg

The Sidetrack Bar and Grill $1.5 million expansion project will create new jobs, apartments and more space.

Ypsilanti's Sidetrack Bar and Grill's $1.5 million expansion project is one step closer to realization, after the city council unanimously approved a tax abatement Tuesday to freeze the property's taxable value for 12 years.

Sidetrack Bar and Grill and Frenchies owner Linda French requested it under the Obsolete Property Rehabilitation Act to would effectively freeze the value of the improvements on the combined property at the 2013 taxable value.

Investment and improvements to the properties would not be taxed during the lifetime of the abatement.

The OPRA exemption goes into effect beginning Dec. 31, 2013 and will end Dec. 30, 2025 for the real property, excluding land. At that point, the taxes would increase to reflect the improvements made to the property.

The approval was given by council on the condition that the renovations be completed within four years, the final approval of exemption certificates be granted by the State Tax Commission, and the taxes on the property be paid on time.

French purchased 52 E. Cross St., the former Bird Brain, in June for $350,000 from King C & C LLC to add to her existing 10,000-square-foot building.

French has been working out plans for the renovation of the existing upper stories of 54 & 56 E. Cross, which are undeveloped and vacant, as well as expansion of the Sidetrack restaurant into the first floor space of 52 E. Cross.

French previously told AnnArbor.com the grant will allow Sidetrack to have its mortgage debt paid off by 2024, making available the additional cash flow needed to cover the increase in property taxes once the grant exemption has ended.

The entire project is scheduled for completion by 2016 and the total investment for the project is expected to be approximately $1.5 million. French is estimating that within 24 months, 40 jobs will be created.

"We're excited to reinvest in the city of Ypsilanti," said Sidetrack Bar and Grill manager Jessica French.

Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.

Comments

Narnia

Thu, Jan 24, 2013 : 5:38 p.m.

Unbelievable.

Aaron

Wed, Jan 23, 2013 : 10:03 p.m.

To the point ypsi1 made they will continue to pay what they will pay in 2013 for the next 12 years . which is already lower then what they paid in 2010, 2011, and 2012. Our local property values have been going down, I have seen this with both my homes in ypsilanti and I'm sure you have seen this in your own homes. So locking the rates is benefical in the short run, sidetracks will not be taking advantage of the lower taxes they would pay other wise. Secondly they have spent 350,000 on a the neighboring building(which in my understanding is not property they previously owned so I would consider this to be new property). Which also has taxes so those taxes will be paid. Also the first floor (what sidetracks is currently) will continue to fluctuate. So as business expands and improves the city will rase the assesed value ultimatly raising the taxes. So yes the "successful business will pay their fair share". They pay there taxes and they build the community by creating jobs and improving the city by repairing otherwise vacant space. If this encentive wasn't paid the French's may have not been able to do the repairs. If the repairs werent done the city would continue to collect the taxes they currently do which would be less in the coming years till property values started to raise. When the tweleve year cap is removed and all renovations are long over the business will have vastly improved its "value" which the city will tax appropriately. The city is allowing a business to expand who otherwise might not have been able to. As a tax payer I'm very happy for this decision because in the long run it will be a benefit for the city as it will be for the community. Delete

ypsi 1

Wed, Jan 23, 2013 : 7:12 p.m.

Non homestead property pays 82 mils or $82 per $1000. If the assessed value is about half (normally) then the property will continue to pay about $14,350 per year, as it has been. That will skyrocket in 12 years when the abatement expires, but in the meantime it makes the whole area grow and employs more people. Many businesses ask for and receive these benefits so don't hold it against the Sidetrack!

Aaron

Wed, Jan 23, 2013 : 5:49 p.m.

I guess I don't understand the anger over this. Won't a freeze on the taxes mean stoping any change in taxes for tweleve years. Looking at the city of Ypsilanti's tax assessing website the assesed value has decreased for at least the past three years which most likly means they pay less and less in taxes. So we are going to freeze there taxes allowing them to continue paying the current taxes as if bird brain and two vacant floors remained. We will then allow them to put 1.5 million into the city, which will create around 40 new jobs, an area for events, a even larger staple for the city, and just improve the positive moral of the city. Sidetracks is a great place, they are packed every night, they keep a very clean store, and everyone knows and loves the place. Isn't this the small downtown feeling we are always pushing for. We don't want big business like the family dollar and we don't want our small business owners to flourish. I'm confused what is it that we want for our city.

r756

Thu, Jan 24, 2013 : 12:40 a.m.

@ tdw The value of the property (and the taxes due) will increase with the improvements. When renovated, the newly usable upper floors will increase the assessed value of the property. Taxes will not be paid on these improvements, although they will presumably be bringing in money as soon as they are completed, until the abatement ends. I'm sure there is a way to at least estimate the "value" of the improvements but I do not know specifically how this is calculated.

Aaron

Wed, Jan 23, 2013 : 9:53 p.m.

@ r756 & tdw, I apoligize for not monitoring this more often so I could respond quicker. To the point ypsi1 made they will continue to pay what they will pay in 2013 for the next 12 years . which is already lower then what they paid in 2010, 2011, and 2012. Our local property values have been going down, I have seen this with both my homes in ypsilanti and I'm sure you have seen this in your own homes. So locking the rates is benefical in the short run, sidetracks will not be taking advantage of the lower taxes they would pay other wise. Secondly they have spent 350,000 on a the neighboring building(which in my understanding is not property they previously owned so I would consider this to be new property). Which also has taxes so those taxes will be paid. Also the first floor (what sidetracks is currently) will continue to fluctuate. So as business expands and improves the city will rase the assesed value ultimatly raising the taxes. So yes the "successful business will pay their fair share". They pay there taxes and they build the community by creating jobs and improving the city by repairing otherwise vacant space. If this encentive wasn't paid the French's may have not been able to do the repairs. If the repairs werent done the city would continue to collect the taxes they currently do which would be less in the coming years till property values started to raise. When the tweleve year cap is removed and all renovations are long over the business will have vastly improved its "value" which the city will tax appropriately. The city is allowing a business to expand who otherwise might not have been able to. As a tax payer I'm very happy for this decision because in the long run it will be a benefit for the city as it will be for the community.

ypsi 1

Wed, Jan 23, 2013 : 7:11 p.m.

Excellent points Aaron. Non homestead property pays 82 mils or $82 per $1000. If the assessed value is about half (normally) then the property will continue to pay about $14,350 per year, as it has been. That will skyrocket in 12 years when the abatement expires, but in the meantime it makes the whole area grow and employs more people. Many businesses ask for and receive these benefits so don't hold it against the Sidetrack!

tdw

Wed, Jan 23, 2013 : 6:52 p.m.

r756.....I've been asking this question ( basically ) all day long and I've gotten thumbs down but no one seems to be willing to give a answer ( they don't have one perhaps ? ) So I'll direct this one to your comment.If a business is spending their own 1.2 million on just improvements not new property and their taxes are not going down just not being raised, how do those improvements, dollar wise , raise " their fair share " ?

r756

Wed, Jan 23, 2013 : 6:31 p.m.

It seems like what people want is for a successful business to pay their fair share.

Aaron Bookvich

Wed, Jan 23, 2013 : 4:26 p.m.

Great news! It seems like a lot of folks do not understand the tax incentives though and are acting like the Side Tracks will not pay any taxes which is just not the case.

tdw

Wed, Jan 23, 2013 : 3:57 p.m.

I've noticed a trend on this site.People have no problem with raising taxes....on everyone but them

rs

Wed, Jan 23, 2013 : 2:56 p.m.

People clearly don't understand the value of this. 1. Ypsi will still be collecting taxes on this property (although the rate will be frozen at current rates). Its not like they are "losing tax dollars" by doing this. 2. The property will be improved, adding to the taxable value and greatly increasing it once its unfrozen. 3. This will improve the looks of the neighborhood, increasing everybody's value. 4. This will create full time jobs and probably employ local labor for renovations. 5. Almost every big business and big box store chain get massive tax breaks, yet a lot of people still give them business. When a small local business applies for just a tax freeze, people are besides themselves. People in the A2 area claim to love local business and complain because local businesses close down or move, then they grumble because they get support through a completely legal channel. Its called being business friendly and it really does help the entire ares in the long run. If it didn't, there wouldn't be laws on the books that allow it.

tdw

Wed, Jan 23, 2013 : 3:40 p.m.

ahi....please list some business who have not got a tax break ( as in not a increase ) in Ypsilanti for improvements please

ahi

Wed, Jan 23, 2013 : 3:02 p.m.

Every other business and property owner in Ypsi has to pay taxes on any improvements they make. Taxes that subsidize the investments of French and Beal, or non-investments in the case of Beal.

Think!

Wed, Jan 23, 2013 : 2:15 p.m.

I do run a business in Ypsilanti. And I would never expect to receive tax breaks from the city of Ypsilanti just for doing so. This is an important part of why our communities, our state, and our country is in so much trouble. We lack revenue to attend to our most basic needs - schools, roads, police and fire protection just for starters. We can't continue to give handouts to businesses and expect our communities can sustain themselves. This is the perfect example of "you didn't build that". This expansion will be built on the backs of Ypsilanti citizens who will now have to make up for that revenue by paying higher taxes. Just because you hypothetically create jobs does not entitle you to tax breaks. If you really do care about the community, you pay your fair share.

tdw

Wed, Jan 23, 2013 : 3:36 p.m.

So let me get this straight.....After dumping 1.2 million into the local economy you wouldn't have a problem paying MORE in taxes ? I'd like to know what business you own cause you must be doing much better than most in Ypsi.And if no public money is being used and taxes are staying the same how is that " built on the backs of Ypsilanti citizens " ? ...please explain

Radlib2

Wed, Jan 23, 2013 : 1:49 p.m.

Let me get this strait, when big business get tax breaks it's in the name of job creation, but when a small business does, it is a wasteful giveaway and people--people suppotrive of the slickster--get angry and won't eat there (Cinnabar7071) anymore?

tdw

Wed, Jan 23, 2013 : 3:30 p.m.

Radlib2.....Please refrain from making logical ( execpt for " slickster ") comments.I was forced to give you a thumbs up

cinnabar7071

Wed, Jan 23, 2013 : 3:25 p.m.

Businesses should stand on there own merits, not my tax dollars. I can see giving breaks for businesses that invest in areas that aren't making it, like that riverside failure on Michigan ave. But Depot Town needs no hand outs.

ahi

Wed, Jan 23, 2013 : 1:23 p.m.

Why do renovations of an operating retail/office space fall under the Obsolete Property Rehabilitation Act?

ahi

Wed, Jan 23, 2013 : 3 p.m.

My point is only that the properties were not obsolete. Bird Brains needed a renovation to make it a restaurant, but that doesn't make it obsolete.

Dave Koziol

Wed, Jan 23, 2013 : 2:56 p.m.

The upstairs floors haven't been used in years. They are rehabilitating them.

Katrease Stafford

Wed, Jan 23, 2013 : 1:54 p.m.

Ahi, While Sidetrack is a fully functional restaurant on the first floor, the second and third floors have been vacant and underutilized for a long time now. I believe there was also an access issue.

HB11

Wed, Jan 23, 2013 : 1:42 p.m.

Ahi, LMGTFY. http://www.michiganadvantage.org/cm/Files/Fact-Sheets/ObsoletePropertyRehabilitationAct.pdf The name pretty much says it all, it is for renovating and modernizing obsolete buildings. No money is being taken from you the taxpayer or being loaned to the business by the gov't. It is an incentive for business owners to invest.

Urban Sombrero

Wed, Jan 23, 2013 : 12:57 p.m.

Hopefully they'll add larger tables. Or smaller condiment baskets. I love Sidetrack but they always have a basket of condiments on the table that takes up a lot of space. Fitting food and drinks around it makes it super tight. I know I'm nit picking but... Otherwise, I think this is a good thing. Anytime a business can expand it should.

AdmiralMoose

Wed, Jan 23, 2013 : 12:11 p.m.

Katrease: did you bury the lede? Ypsilanti City Council Unanimously Agrees on Something. Ms. French is an indefatigable supporter of Ypsilanti, so I see nothing wrong with freezing her taxes while she makes the Sidetrack the destination restaurant that we need in Depot Town. Everyone benefits from this. Good job, city council!

HB11

Wed, Jan 23, 2013 : 1:36 p.m.

@ Ahi, where is your business located?

ahi

Wed, Jan 23, 2013 : 1:22 p.m.

I am also an indefatigable supporter of Ypsilanti. Where's my tax break?

cinnabar7071

Wed, Jan 23, 2013 : 12:07 p.m.

I wont eat there anymore, not that it matters to them, now that they have my money.

tdw

Wed, Jan 23, 2013 : 4:02 p.m.

How do they now have " your money " unless you consider the money they will be paying out of their own pocket s, as in no cost to you " your money " ? explain please.Or did you just have lunch there ?

Arieswoman

Wed, Jan 23, 2013 : 11:21 a.m.

Nice for us taxpayers! You improve, make more money, sock it to the taxpayers! That law needs to be rescinded.

tdw

Wed, Jan 23, 2013 : 3:24 p.m.

ahi.....could you please explain how one " kicks out " their own business... please Arieswoman.....How is not RAISING taxes for improvements paid by the business owner " socking it to tax payers " ? explain please

cinnabar7071

Wed, Jan 23, 2013 : 3:19 p.m.

Bob Depot Town is doing just fine, in fact it's about the only part of Ypsi that doesn't need any help. I don't get out as much during the winter, but Depot Town in the summer is crazy busy every night.

ahi

Wed, Jan 23, 2013 : 1:21 p.m.

Bob, the storefront wasn't abandoned. They kicked out a successful business.

Basic Bob

Wed, Jan 23, 2013 : 1:09 p.m.

On the other hand, we could leave things the way they are. Abandoned storefronts, decreasing property values, foreclosures, and tax liens preventing redevelopment. Sidetrack is investing in the city. The city is investing in itself, and this is not the big risk or potential cash outlay for Water Street. It beats them moving out to Whittaker Road to a brand new strip mall.