Definition of 425 Agreement
Effective March 29, 1985, the 425 Agreement is also known as the Intergovernmental Conditional Transfer of Property by Contract Act. The legislature of the state of Michigan enacted the 425 Agreement.
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Purpose
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The purpose of 425 Agreements is to allow two or more local governments to share the costs and benefits of economic development. According to the Lansing Economic Development Corporation, this means that a city with more than enough capacity in utilities can partner and collaborate with a township that has undeveloped tracts of land. Both communities also have the options of sharing other responsibilities such as providing police.
Procedure
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In order for a 425 Agreement to work, two units of government need to first negotiate a plan. Once approved, terms and conditions of the contract are recorded by the secretary of states as well as the county clerk. These terms are generally negotiable and are aimed to fit any economic-development situation.
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Time Frame
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425 Agreements are effective for 50 years or less. What happens to the land when the agreement expires is usually predetermined in the agreement.
Controversy
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A major concern of the 425 Agreement is what happens to the land at the end of the agreement. The possibility of a city's losing interest in the agreement is worrisome, as is the possibility of the land's being bound to the city.
Criticism
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The main criticism of the 425 Agreement is the lack of state oversight during the process. The two governments in question negotiate and approve agreements on their own terms without regional planning. Neighboring cities have no say in the agreement, though they may also be impacted by it.
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