Saginaw Mayor Greg Branch spoke with TV5 on Thursday about the flyer.
SAGINAW, MI (WNEM) -
Saginaw Mayor Greg Branch is firing back at union flyers circulating around Saginaw that make accusations the mayor is "giving away money" to out-of-state developers in connection to renovations going on at the Bancroft and Eddy buildings.
The flyers contain Branch's home phone number and the mayor says he's been getting angry calls from constituents not truly informed of the details of the city's agreement with the developer of the Bancroft-Eddy project.
Last week, union workers gathered at the Bancroft building holding bright orange signs as they stood in front of a giant inflatable rat. They protested the use of out-of-state non-union labor for construction at the Bancroft and Eddy buildings.
"We gave them the chance to hire some local guys and they turned us down," said Chris Taylor with Michigan Laborers Local 1098 last Thursday.
A management company based out of Ohio purchased the buildings. The company said it will invest $5 million into downtown Saginaw. Work is currently underway.
In this instance, it may be best to let the mayor's new release on the topic speak for itself as he addresses much of the complaints made by Local 1098 in the flyer:
Residents of the City of Saginaw have been receiving flyers, distributed by representatives of the Saginaw Laborers' Union Local 1098, that claim I "refuse to stand up for the working people of Saginaw." These flyers contain a number of highly inaccurate statements.
The flyer says: "As Saginaw struggles with budget deficits and can't fund our police force, a necessary public safety service, [Mayor Branch] is GIVING MONEY AWAY to wealthy out-of-state developers on the Bancroft Hotel-Eddy Place project.
"Mayor Branch is OK giving away $500K in revenue but doesn't want to ‘handcuff' the developer by requiring local workers get the work."
The City of Saginaw has given no money away to the developers of the Bancroft-Eddy project. City Council did approve an Obsolete Property Rehabilitation Act tax abatement for the project. An OPRA is designed to help mitigate the tax impact of improvements on buildings that, because of their age, present additional financial challenges. An OPRA "freezes" the taxable value of the property at its current value for a fixed time period, which can be up to 12 years. Its real property taxes are assessed at the current level despite the improvements to the property - until the abatement period expires.
The idea is that it reduces the "front-loading" effect of costs by shifting the increased tax burden away from the construction period.
Some people may see this as "giving money away." However, Saginaw is in a unique position when it comes to tax abatement programs such as OPRAs. Our general fund operating levy is capped at $3.8 million. Which means that the improvements to the buildings, even if taxed immediately at their full value, result in no additional revenue for the City of Saginaw - we still can't go over $3.8 million.
But an OPRA abatement establishes a special "tax capture district." The entire value of the property in question is taken off the regular ad valorem tax rolls. It is taxed from a separate roll, "captured" in a special fund and is not subject to the $3.8-million cap.
So, rather than costing the City of Saginaw money, by pulling the value of the Bancroft and Eddy buildings off the regular tax rolls and putting them in a special capture district, the abatement actually results in a significant net increase in tax revenue.
The flyer also implies that the laborers currently doing demolition and clean-up work in the Bancroft-Eddy buildings are not local workers. This is also untrue. LuAnn Stockfleth, the project manager for Lakeshore Development, reported today that the only two workers on site who are not local are the foreman, who is from Kalamazoo, and Ms. Stockfleth herself. All other employees are "local" people who got the jobs by answering a "help wanted" ad placed by the developer.
Finally, while I did indeed say, as the flyer quotes me, "I would not want to put handcuffs on a developer where if you don't hire local people, we don't want to do business with you." However, the flyer does not note the remainder of what I said in that statement: that I would also encourage developers to hire local people whenever possible.
I simply do not believe it is the proper place for local government to tell an employer who he can and cannot hire, nor do I think doing so is in the best long-term interests of the City of Saginaw.
The flyer encourages people to call my home phone number. Many people have. Some of the messages accuse me of "lining my pockets" with money from the "out-of-town contractor." Many simply stop at ascribing my motivation to greed. Either way, they have forced my wife and I to have some painful discussions with our children about how people are hurt when a falsehood spins out of control. I cannot imagine the lessons about labor unions they will take away from the experience.
Although Local 1089's leadership have not returned my phone calls or emails so we can find out for certain, I'm assuming these inaccuracies are the result of simple misunderstandings and assumptions. If that's the case, I ask that they work as hard to pass along the correct information as they have the incorrect information.
If, on the other hand, they are aware that this information is untrue and they are using it to incite people to, among other things, harass my family, it would be a rather sad reflection on the ethics of the Laborers' International Union of North America — and on the labor movement itself.
Greg Branch, Mayor of Saginaw
Check out photos of the demonstrators protesting in our slideshow to the left of this page. Stay with WNEM.com and TV5 as we continue to follow this story.
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