Long Road Distillers, an upscale Grand Rapids-based eatery and cocktail bar co-owned by Mayor David LaGrand, received a major tax exemption last week during a meeting of the City Commission.

During the meeting, the commission approved two resolutions which both directly affected the amount Long Road will owe in property taxes. Mayor LaGrand during the meeting acknowledged his stake in the business and voluntarily recused himself from the discussion.

The first resolution established an Industrial Development District for Long Road Distillers, which is required to take advantage of Michigan’s Plant Rehabilitation and Industrial Development Districts Act. That measure “provides a tax incentive to manufacturers to enable renovation and expansion of aging facilities, assist in the building of new facilities, and to promote the establishment of high tech facilities,” according to a state website.

The board approved that resolution unanimously.

Next, the board unanimously approved Long Road’s application for a 12-year Industrial Facilities Exemption Certificate, which will exempt the facility from “ad valorem real and/or personal property taxes” for 12 years while it conducts a $680,000 renovation project.

Commissioner AliciaMarie Belchak explained the renovation would improve the facility’s cannery, expand the tasting room, and add an additional distillery.

On his website, Mayor LaGrand acknowledges via a financial disclosure that he owns 51% of Long Road Distillers among a portfolio of other local business ventures. The site adds that LaGrand does not allow these holdings to represent a conflict of interest in his duties as mayor.

“I have voluntarily disclosed my personal finances – ownership in real estate and businesses – because citizens have the right to know where their elected officials have financial interests,” the site reads. 

“I have always been very careful to avoid conflicts of interest in my work representing the people of Grand Rapids and the citizens of Michigan,” it continues. “I believe that elected officials should be required to be transparent so citizens can monitor and consider the existence of real or apparent self-interested acts by their elected officials.”

LaGrand’s office declined an interview request from The Grand Rapids Herald, but shared a statement which highlighted his decision to recuse himself from the vote. His comment did not address how he may benefit from the tax exemption.

“Mayor LaGrand recused himself at all points of conversation regarding this topic and did not participate in the vote,” the statement reads. “Recusal and abstention are the correct legal procedures to comply with our local City policies and the state laws related to ethics and conflict of interest.”

James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, told The Herald the project does not violate any legal guidelines, but could potentially infringe upon ethical ones.

“As long as they abide by conflict of interest rules in authorizing the tax breaks, it’s unlikely that this would run afoul of the law,” he wrote via email. “But the tax breaks themselves are ineffective and cities should stop authorizing them.”

“[The tax breaks] are supposed to encourage job growth, but they tend to go to projects that would have happened regardless of the special treatment,” he added. “It’s unfair to let some property owners pay less while others are subject to the full tax burden. It’s especially unfair to the company’s competitors in the city who don’t get this break.”

Several members of the public took to the meeting’s public comment section ahead of the vote to debate the council’s decision to approve Long Road’s application.

Grand Rapids resident Daniel Scott said he opposed the commission’s decision due to his identity as a “follower of the Lord Jesus Christ” and former “drunkard” who said he had witnessed the effects of alcohol on the community first hand.

“Is this what you want?” he asked the commission. “To stand in front of the Lord one day and explain why you want this facility bringing more poverty to Grand Rapids?”

A second speaker, who identified himself as John, rebutted Scott, saying the conversation had nothing to do with religion.

“The ridiculous contorting of invisible sky wizard words in old books written by gay scribes that were ashamed of themselves under the rule under an oppressive king long ago, those are really not a way to come at telling you whether or not you should have a business,” he said.

A third speaker who went by Emma said she viewed the city’s involvement in Long Road’s affairs as a conflict of interest. She added that community members have begun to boycott Long Road due to the city’s decision not to acquiesce to immigrant demands to become an official sanctuary city.