People occasionally bemoan the fact that America’s colleges (like its churches) are except from property taxes. But becoming a regular, tax-paying company might actually financially benefit a college or two.
According to an article by Chris Knape in the Grand Rapids Press:
Grand Valley State typically doesn’t pay taxes. But, in an effort to help finance a new riverfront business college downtown, GVSU has set up a for-profit holding company that will keep that project on the tax rolls — at least for a while.
The reason: Tax credits and reimbursements will help cover up to $15 million of the cost of the new $40 million Seidman College of Business complex.
It turns out that Grand Valley State University, in Allendale, Mich., will get such generous tax breaks for setting up a corporation that the tax exemptions it gets from being a college don’t much matter.
The university’s holding company, 38 Front Redevelopment LLC, will get “about $6 million in Michigan Business Tax credits and up to $9.2 million in property tax reimbursements,” according to the article. That money will more than compensate for the property taxes the company has to pay.
It looks like it’s often lucrative to be located in a state desperate for corporate investment, any investment.
It’s unclear if GVSU actually expects 38 Front Redevelopment LLC to make any money aside from the tax breaks. [Image via]