10/08/2006

Allen supports review of $4.5 million tax credit request

By CRAIG McCOOL

mccoolrecordeagle@sbcglobal.net

Read the full series

Special to the Record-Eagle/Kevin Johnston

• Developers get go-ahead - October 7, 2006
• Permit issued to city officials, not developers - October 6, 2006
• Deadline awaits city, developer - October 4, 2006
• Officials satisfied; public is not - October 3, 2006
• Recent soil borings don't match '94 findings - October 1, 2006
• Consultants to meet with brownfield officials - October 1, 2006
• Developers net $4.5M credit from flawed tests - September 24, 2006
• Brownfield tax break considered 'crucial' - September 24, 2006
• Petoskey Pointe $4.5 million brownfield tax credit time line - September 24, 2006

See related editorials:

• Lack of tax credit oversight taints Petoskey Pointe plan - October 8, 2006
• Petoskey Pointe tax credit application process tainted - October 1, 2006
• Brownfield sites get cash, real contamination waits - September 19, 2006

PETOSKEY — A state lawmaker said he is "very concerned" that developers behind a downtown project cited inaccurate information on an application worth millions in brownfield tax credits.

Sen. Jason Allen, R-Traverse City, supports a complete review of Petoskey Pointe developers' application for a $4.5 million tax credit, awarded in June by the Michigan Economic Development Corporation.

"Clearly, it's an oversight issue between the (Department of Environmental Quality) and the MEDC. I think it's appropriate for them to take full review of the problems that are going on," Allen said.

Gov. Jennifer Granholm's office asked for a review last month after a Record-Eagle investigation found that developers Lake Street Petoskey Associates cited inaccurate testing data and overstated contamination at their project site when they applied for the tax break.

Primary developing partner James Wilson contributed more than $10,000 to Allen campaign coffers since 2004, and Allen attended the first Emmet County Brownfield meeting at which Petoskey Pointe was discussed.

Allen said he was at the meeting to address the board on another project, and said he had "little or no involvement" in Petoskey Pointe, a $60 million hotel-and-condo project proposed downtown.

Former Petoskey Mayor Ted Pall, a longtime critic of Petoskey Pointe, wrote Allen a letter last month and expressed concerns about the tax credit.

Allen responded in an Oct. 3 e-mail and indicated he learned about the flawed application through Record-Eagle reports and said he was "very concerned with the brownfield application process" for Petoskey Pointe.

"The (MEDC) ... should review any project applications that have inaccuracies and re-evaluate those applications with the accurate information," Allen wrote. "This reporting error should have been corrected before the application moved all the way through the process."

On their May 30 application for the $4.5 million single business tax credit, the developers cited tests showing contamination their environmental consultants weeks earlier acknowledged to the DEQ were false, the product of laboratory contamination.

The application also said the removal of up to 10,000 cubic yards of polluted soil would "protect the groundwater and adjacent Lake Michigan from contamination."

The developers' environmental consultant in a county meeting Oct. 2 acknowledged that just a few hundred yards of soil were hauled off to address contamination concerns.