Real Estate Tax Incentives & Economic Development

Overview

Dykema's tax lawyers work with the Firm’s real estate and corporate attorneys and government policy advisors to help corporate, nonprofit, state and tribal government entities maximize opportunity and minimize overall project costs through federal and state economic development and tax incentive programs. Together, this team identifies appropriate programs and structures transactions that will result in the best possible outcomes for our clients.

Federal and state laws provide significant tax credits and other incentives to credit investors, owners, lenders and developers of approved redevelopment, rehabilitation and renewal projects. Our deep understanding of the complex, interdependent legal issues is the foundation for sophisticated counsel to clients wishing to take advantage of credits and incentives such as:

New Markets Tax Credits

Dykema attorneys have been involved with the NMTC program since its inception. We represent developers, lenders, credit investors and Community Development Entities (CDEs) in NMTC projects. We assist CDEs obtain CDE certifications obtaining credit allocations and provide guidance on a myriad of transactional issues.

Historic Tax Credits

This program provides substantial federal—and often state—tax credits for the rehabilitation of historic structures. We are experienced in structuring transactions for investors, developers and lenders that qualify for these and other related credits and incentives, such as historic conservation easements.

Michigan Community Revitalization Program

Beginning in 2012, Michigan eliminated State Historic and Brownfield Credits. The credits, however, have been replaced with the Community Revitalization Program, consisting of loans and grants to economic development projects. Dykema attorneys worked with government officials in developing the new program.

Conservation Easements

Under the Internal Revenue Code, a property owner can grant a conservation easement to a qualified nonprofit organization and claim a deduction based on the foregone use of the property. Easements can be granted on scenic properties as well as historic structures. Dykema has represented organizations receiving such easements, building owners granting easements on historic structures. We also advise clients that seek out and structure transactions that monetize conservation easements.

Experience Matters

Recent work in this area includes:

  • Represented the City of San Antonio in an Economic Development Project, which culminated in the selection of the City by Toyota Motor Manufacturing North America as the location of a large automotive assembly plant, including negotiating the Incentives Agreement on behalf of the City of San Antonio, as well as acquiring a project site covering an area in excess of four square miles.
  • Represented the developer/owner for the rehabilitation of the 34-story Broderick Tower in downtown Detroit; a mixed use project, using new markets, historic and Brownfield credits.
  • Represented the developer/owner in a new construction project in midtown Detroit utilizing New Market Tax Credits, to develop a mixed-use project, consisting of residential and incubator retail spaces.
  • Represented a lender in connection with the first project that combined Wind Energy Credits and New Market Tax Credits.
  • Represented the owner/developer in the rehabilitation of historic Fort Shelby Hotel in downtown Detroit, a project that not only used historic credits, but a historic conservation easement, as well.
  • Represented the lender/credit investor in a major downtown Flint redevelopment project using New Market Tax Credits.
  • Representing Community Development Entities (CDE) in connection with various NMTC programs.
  • Successful lobbying of the Michigan legislature and Governor to create a property tax exemption for computer software.
  • Handling significant tax incentive projects for major international corporations.
  • Successful lobbying of the Illinois legislature and Governor to create a tax incentive program to promote the film and television industry in Illinois.