City shoots down Brownfield redevelopment plan for Coolidge housing development

By Robert Tomlinson
News Director

THREE RIVERS — A proposed housing development that was controversial among those who lived near the area it would go in seemingly hit a dead-end Tuesday.

In a 3-2 vote, the Three Rivers City Commission voted down a Brownfield redevelopment plan by Allen Edwin Homes for a proposed 38-unit housing development at 611 Coolidge Pl. in Three Rivers following a public hearing on the issue. The 38 houses, six of which would be so-called “income qualified units,” would be squeezed into the 5.62 acres of land on that property, which sits just due east from the Meadows senior living neighborhood and due north of the Armstrong Park Sports Complex.

If the plan were approved, it would have also approved tax-increment funding (TIF) for the property, which would’ve captured nearly $2.9 million in taxes, including $1 million in city taxes, over 15 years, which would go to Allen Edwin, a part of the plan that was one of the many sticking points in the project among the commissioners who voted against the project. A site plan for the project had been previously approved by commissioners.

Mayor Tom Lowry and Fourth District Commissioner Carolyn McNary voted in favor of the redevelopment plan, while First District Commissioner Pat Dane, At-Large Commissioner Lucas Allen, and Second District Commissioner Steven Haigh voted against the plan. Third District Commissioner Chris Abel and At-Large Commissioner Torrey Brown were absent.

The development had been in the works for several months, and would have included a private road with access to Kennedy Street with a cul-de-sac at the end, as well as an additional private road accessed from the primary private road running through the site. The site plan for the development was one of the sticking points in what made the plan controversial, as there was only one entrance/exit into the development and no secondary outlet. Another aspect of the plan was that the main private road, which would be 24 feet wide, would intersect directly with Bush Boulevard in the Meadows, another objection some commissioners and Meadows residents had. The other private road would be 20 feet wide; both road widths were also objected to by some commissioners.

All of the houses would be rentals, with the majority of the houses being offered at $3,100 per month rent, per Michigan State Housing Development Authority (MSHDA) control. The “income qualified units,” which would go to those who make 120 percent of area median income (AMI) or lower, according to the plan, would be offered at $1,800 per month.

During the public comment portion of the hearing, Sherri Nowicki, a real estate broker in the area, slammed the proposed rent prices of the properties, as well as discussed the need for actual low-income housing in Three Rivers.

“I know what houses sell for in this town and what the high taxes do to people in this town. When you’re talking about bringing rentals into Three Rivers for $3,100 a month, with MSHDA offsetting some of that and it’s still $1,800 a month, do you know how hard it is to sell a house in this town for $1,800 a month in principal and interest payments? It’s bloody hard,” Nowicki said. “When we talk about low-income housing, let’s get real. The median income is only like $47,000 in this town. … You guys need a gut check in reality, because this is not even reality, and what you’re doing to a senior living space which was dedicated to be that, which is reflected in the master plan, you should take a good hard look at that.”

Another resident said the $1,800 per month rent is “not low-income,” and said the city has the “ability to do something good” by voting down the plan. Other citizen comments referenced the city’s master plan, the need for low-income housing, the property’s original purpose as senior housing, the lack of occupancy limits in the city code, the lack of presence from MSHDA and the Department of Environment, Great Lakes and Energy at the meeting, and the length of time the city would go without tax revenue from the properties.

Brian Farkas, the director of workforce housing for Allen Edwin, ran down parts of the proposed project during the hearing, while also clarifying that the houses would “not be low-income housing.” He stated that the “income qualified units” would actually be available to those who make around 80-120 percent of AMI, those he called the “missing middle.” That is a contradiction from the written plan that was presented to the commission, which only referenced 120 percent “or lower” AMI, which in theory would also mean less than 80 percent.

“This is not low income. I’m not saying low-income is not needed, but this is not that,” Farkas said. “Additionally, the city’s investment risk here is zero. We’re asking the city to put nothing up for this. We’re investing $9.5 million. If we do it incorrectly, we’re the ones who are out of the entire money. If we don’t generate tax revenue from this project, we’re out of this money. If we don’t perform, we are out of this money.”

City Manager Joe Bippus said it was his suggestion to Allen Edwin to go for 15 years with the TIF, adding that the city has owned the land for 15 years without collecting taxes on it. The land, he said, is also part of a 425 agreement between the city and Lockport Township, and the township would be owed “2.5 mills of value on the property.”

“There’ll be a separate agreement where Allen Edwin is going to pay that to us to give it to Lockport Township or give it to the township directly,” Bippus said. “Housing is needed, this is a different product they’re bringing to market.”

Allen asked about the $2.9 million going back to Allen Edwin, whether or not the city would “get nothing” for 15 years, and in a follow-up if they had leeway to have the city get more back. Farkas said they had that leeway, but that “the pro forma works for us this way.”

Dane asked if there were any stipulations in the original 425 agreement for the land about what could be put there, to which Farkas said there wasn’t. City Attorney TJ Reed explained that there were two different payback rates. When Dane then mentioned the senior living area, Reed said there was a difference between the master plan and a 425 agreement, noting that the senior living development has changed hands “multiple times.” Reed added that the 425 “just transferred the property in,” and didn’t dictate what it had to be used for.

Dane then added that she couldn’t justify the redevelopment plan if the roads weren’t wider than they were, citing the Meadows, which she is a resident of, and the recent development in Garfield Court next door, another Allen Edwin development, where she said there are parking issues with people parking on streets, and one of the houses having six cars at the property. She said if that kind of setup was put in place in the Coolidge development, it would be tough for first responders to get through in case of an emergency.

“If people have a car here and a car there [on the road] and a car here and a car here, a fire truck or ambulance could never get through on those roads. Not when you make them smaller than a legal limit size,” Dane said. “It just doesn’t work. We know for a fact it doesn’t. If there’s a lot of people there, and those people are going to have a lot of cars. Believe me, we know that from the other subdivision unit behind us. There must be 25 cars between those 12 houses.”

McNary said she agreed with Dane about the road situation in the proposed development, but said she was surprised that they city was where they were at that point, noting that planning has been going on for over a year. However, she added that she thought it was a good idea to have a “better housing community” in the city.

“Three Rivers wants to grow, we want more industry to come in and people to have places to go. Your children are going to grow up and make money and not want to come live where I live, they’re going to be looking for someplace. We’re looking at a future here, not just what’s going on right now,” McNary said. “We have to look out for the community that was already there, and their request should mean a lot. … That’s their home, you can’t just bogart them.”

When asked by McNary if the decision regarding the roads in the development was something that could be changed, Farkas said since the hearing was focused on the TIF plan of the redevelopment plan, he would focus just on that. Reed was clearer with his follow-up answer, simply saying, “No,” noting that the site plan was previously approved.

Allen then asked if there was a “Plan B,” to which Farkas said that as the plan is currently drafted, “the pro forma works as we presented today.”

Lowry said that overall, he agreed with some parts of the project, but objected to others. He agreed that the community is aware there’s a housing shortage “at all price points,” and that there “aren’t enough houses to meet demand.” He then reiterated a line he’s stated before, that Allen Edwin is the only one consistently building houses in the city, and that the city doesn’t “have anyone local wanting to invest.”

“When we don’t have anyone local wanting to invest, then we have to look at what happens. Allen Edwin has a proven track record at this point,” Lowry said. “They’ve done a lot of houses, and every time they have come through, we’ve never had to go back after them. They say what they’re going to do, and they do what they say.” The last sentence drew some groans from the audience.

Lowry noted that they were being asked to approve a TIF plan based on a state law about brownfields that was recently re-written, and the development was one of the first attempts in the state to use it. He said he was glad Allen Edwin “had the guts to do it,” but said it’s “money that doesn’t exist currently.”

“Bottom line is, it’s tax dollars that don’t exist unless this development exists. It’s been charged exists that you’re diverting tax dollars to somebody’s pocket. I’ll get to that, but it’s tax dollars that don’t exist currently,” Lowry said.

He then objected to how the state calculated rent prices, stating that “nobody pays $3,100 for an apartment in Three Rivers” and he “didn’t agree with the $1,800,” and added that it was up to the municipality to determine how long the developer’s “lost capital” with houses that have those reduced rent prices – 15 years was, in his words, “the shortest term possible.”

Lowry then described what tax money would be diverted, as well as his thoughts on it.

“This is a $2.9 million diversion. Again, it would never have been diverted if they don’t develop. Once they develop, they’ll get $2.9 million back to offset their ‘lost capital.’ All the city taxes go to them, that’s a million dollars, the county and 911 and different ones lose out, it’s $1.2 million for schools,” Lowry said. “I think a million dollars is a lot to lose. On the other hand, we never would’ve gotten there if we didn’t agree. It’s like bonus money we’d give back for a short time in order to get this housing. And we as elected officials have to decide whether it’s worth the cost or risk, and I’d say yes. Because no one else is going to do it.”

Lowry said the situation as a whole was a “complicated” one.

“I don’t like the fact we’re losing a million dollars, but it’s $60,000 a year. In my mind, on a $4.8 million budget, $60,000 seems affordable if that’s the only incentive that’s going to get 38 more houses into this city,” Lowry said. “What I object to very strongly is I hate the fact that school money is being diverted. That had always been sacred, and now they’re going to lose $1.2 million – again, they would’ve never gotten the $1.2 million if they didn’t build, but now they’re going to divert $1.2 million. … I seriously object to taking state money away.”

Allen said he wished Farkas could’ve been upfront about the $2.9 million the city and other entities would lose out on with the TIF.

“We voted to this point, and I’ll be honest, I’m shaking my head to myself; I wish you’d have led with the $2.9 million up front. Diversion or whatever, we’re not getting taxes,” Allen said. “I’m just not very excited about this anymore.”

Lowry said the city was being asked to make a “big decision,” which led to the vote being taken. When the motion to approve the redevelopment failed, a round of applause was had from the full house in the commission chambers, which was filled with residents of the Meadows and other detractors of the plan.

After the meeting, Haigh, who did not speak during the public hearing, explained the reasoning for his dissent in the vote.

“I do believe in home ownership, and definitely the rent’s too high. You have to have everyone working in the trailer industry to actually be able to afford that rent,” Haigh said. “The fact I have a lot of empty lots in my neighborhood that need to be filled with houses instead of everything going out there, it seems like everything’s moving outward and you have all these houses inward that still need to be dealt with.”

As for Farkas, he said after the meeting he understood the residents’ concerns and that, in his mind, the plan “isn’t dead yet.”

“We’re going to work really hard with the city staff and elected council,” Farkas said. “Every development and every time a city grows, there’s growing pains. We need housing in the state at all price points, and we’ll work with city staff on delivering that. We’ll work with the engineering firm and our staff to see what we can do.”

In other business…

• The city approved the purchase of three parcels from the St. Joseph County tax sale: 505 Pleasant St., 650 Spring St., and 317 S. Main St, for not to exceed $20,000.
• The city approved a one-year contract and a Fiscal Year 25 purchase order for $40,863 with JC & Sons for tree removal during the year. The trees to be removed include three trees with stumps and three additional stumps at the cemetery, one tree with stump and six additional stumps in the parks, five trees including two with stumps due to a blocked water service shutoff valve, and three trees with stumps located over sewer laterals or mains.
• The city approved a purchase order of $24,200 to Peerless Midwest for Well 8 chlorination.

Robert Tomlinson can be reached at 279-7488 or robert@wilcoxnewspapers.com.