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Grand Rapids DDA plan to give DeVos owned RDV Corp $317,000 tax abatement to redevelop Morton House put on hold

February 13, 2013

At this morning’s Downtown Development Authority (DDA) meeting, the members of the committee were scheduled to approve the recommendation that the DeVos/Rockford Construction redevelopment project of the old Morton House move forward.

I talked with DDA member Jim Talen who didn’t know why the RDV Corp redevelopment proposal was pulled from the agenda and City Staffer Eric Pratt said he couldn’t say why it was no longer on the agenda. When asked about if the matter would be on next month’s DDA agenda, Pratt said he didn’t know and that it might depend on Rockford Construction, which released a statement today, which we could not find on their website or online anywhere.images

The Morton House used to provide housing for low-income residents in a federally subsidized program that served roughly 200 people for several decades.

The DDA staff recommendation was to offer the RDV Corp a 10-year tax abatement under what is know as OPRE, Obsolete Property Rehabilitation Exemption. Under such a plan, RDV Corp would not have to pay the estimated $31,700 property taxes per year or $317,000 over ten years.

The RDV Corp proposal is to redevelop the property to create what they referred to as 100 “market value residential units.” The reduction from 200 previous units would suggest that the housing units would be much bigger and target urban professionals. Indeed, the DDA estimates that said resident in the new RDV Corp facility would spend $2 million in the downtown area.

On this matter the DDA document states:

The addition of 100 new market-rate residential units on Monroe Center will infuse approximately $2 M in annual consumer spending potential into the core of Downtown, which will grow the demand side of retail feasibility, again consistent with the goals Framework Plan.   

Such comments reflect the trickle down theory of economics, that as long as people are spending money, some of it will trickle down to the rest of the community. However, we know that such notions don’t actually work and what is really happening in this case, the DeVos/Rockford Construction project to redevelop the old Morton House, is that the spending will benefit the downtown business owners, which is a small group of people, many of which have close ties to the DeVos family businesses – hotels, restaurant/bar, sports teams and of course ArtPrize.

Free Market for everyone else, not for us

Equally important in this story is the fact that despite the DeVos family commitment to the idea of the “free market,” they don’t often practice it themselves. Why would a corporation that promotes business solutions to social problems, meaning everyone should be an entrepreneur, accept massive tax subsidies from the City of Grand Rapids, when they in principle don’t want the government to interfere with the “free market?”31569670

The truth is that the DeVos owned businesses have always welcomed massive tax breaks and subsidies for their business ventures, thus welcoming the Nanny state when it benefits them. When can working class people take advantage of the same kinds of tax breaks and subsidies for their contributions to society?

Some might argue that working class people already have “entitlements” in the form of Social Security and Medicaid, but those pale in comparison to corporate subsidies. In addition, the social benefits such as social security and Medicaid are constantly under attack by reactionary Think Tanks like the Mackinac Center for Public Policy and the Heritage Foundation, both of which have been recipients of DeVos funding.

The reality is that the free market is really something that the likes of DeVos want imposed on the general public, but not themselves. If most major corporations did not benefit from tax breaks, government subsidies and taxpayer funded services such as roads, most of them wouldn’t last in the real free market.

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