Wednesday, November 23, 2011

$4.1 million question: Why did Detroit incinerator deserve tax credits

Posted By on Wed, Nov 23, 2011 at 11:19 AM

What happened over the past half year that suddenly caused the owners of Detroit’s waste-to-energy incinerator to be worthy of $4.1 million in state brownfield tax credits?

Back in April, the Detroit City Council voted against allocating the tax credits to the incinerator’s new owner, Detroit Renewable Power, for new equipment and site improvements.

On Tuesday, Councilmembers Gary Brown and Andre Spivey reversed course and voted yes, allowing the measure to pass 5-4.  Neither Brown nor Spivey gave a reason for changing their votes. Joining them in supporting the granting of tax credits were Council President Charles Pugh, and Councilmembers Saunteel Jenkins and James Tate. Councilmember Ken Cockrel Jr., Brenda Jones, Kwame Kenyatta and JoAnn Watson were opposed.

But, as far as we can tell, absolutely nothing has changed since April.

As in the past, workers at the plant turned out in force to urge the council to approve the tax credit, which is provided by the state.

A broad coalition of environmentalists and community activists were dismayed by the council’s turnaround. They see it as yet one more subsidy for a polluting facility — it has been tagged with three violations from the state within recent months, including two infractions for excessive odor — that wouldn’t be financially viable without a steady infusion of city money.

Detroit pays $25 a ton to have its municipal waste burned at the facility, and then pays again to buy the steam it produces.

Particularly grating for opponents is the fact that tax credits typically go to clean up polluted properties so that they can bet put back into use, increasing employment and tax revenues. In the case of the incinerator, however, the facility, at the intersection of Interstates 94 and 75 on the city’s east side, is not in danger of shutting down.

Instead of cleaning up blighted property, according to the owners, the tax credits to purchase new equipment and upgrade the facility will only create 10 permanent jobs at most.

As Irv Corley, the council’s fiscal analyst, point out during a hearing on the issue last week, that’s not a particularly good return on the public’s investment of $4.1 million.

Councilmember Ken Cockrel Jr., in arguing against approval, said the brownfield tax credits should be used for projects that “truly bring new jobs and truly renovate” polluted property.

Those arguments fell on five sets of deaf ears.

More by Curt Guyette

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