Council Cool to Developer's Request for Retroactive Brownfield Grant
City of Saline leaders have often expressed pride in the Maple Oaks development on Maple Road, across from the library.
The development took a vacant piece of city-owned (no tax dollars generated) land and turned it into an affordable neighborhood home to working families and to individuals with intellectual and developmental disabilities.
Members of council are eager to incentivize the next phase of the project to the north, a proposed multi-story building with commercial on the first floor and apartments on the second and third floor.
The developer wants to use the Washtenaw County Brownfield Authority to capture funds on the increased taxable value of the parcel, and then use those funds to help reimburse development costs, including environmental testing and potential environmental cleanup. Mercury, tetrachloroethylene and arsenic have been found on the north parcel. Lead, copper, sodium, and chloride have been found in the groundwater.
The seven-year brownfield plan would be worth about $664,993 for the developer, $44,847 for the county brownfield authority (admin fees) and $187,104 for the county brownfield revolving fund capture.
These dollars would be generated by new tax revenues generated by the increased taxable value of the property.
But one part of the ask has generated reluctance from several members of Saline City Council. The developer, Bill Godfrey, of Maple Oaks LLC, is also asking for retroactive tax breaks on the nearly sold-out and completed development on the south side. This comes years after Maple Oaks decided against seeking a Brownfield tax break.
"At that time, the cost-benefit analysis did not make sense. Now, we see the dollar amount is more than anticipated," Godfrey told the council, answering a question from Councillor Janet Dillon.
The potential payback is $105,000 now. In 2016, it was about $50,000.
Godfrey told the council that developing the property, purchased from the city, was more expensive than originally anticipated - in large part due to issues inherited with the land when he purchased the property from the city, including more fill than anticipated. The developer encountered fill, demolition, dust issues and more.
Councillor Dean Girbach said he had some difficulty with the idea of giving revenue back to the developer because the council had done its part to incentivize the project. Godfrey countered that the city's special assessment was effectively a $250,000 loan which is about to be fully paid back with interest. Godfrey said every time he closed on a house, they paid the city $15,000. Every time they sold a condo, they paid back $7,500. The final closing is set for this week, which would pay back the loan.
Councillor Jim Dell'Orco said he wanted to see the city's legal counsel weigh in on whether a retroactive give-back might create a precedent that hamstrings the city in the future. Councillors Dean Girbach, Dawn Krause and Kevin Camero-Sulak agreed.
The precedence is a valid concern, said Nathan Voght, economic development specialist for the Washtenaw Brownfield Redevelopment Authority. Still, the Washtenaw BRA's technical subcommittee reviewed the brownfield plan and are in favor of the site being eligible for tax increment finance recovery.
Sensing council's concern, Mayor Brian Marl proposed a compromise - a $75,000 give-back for the completed south side of the project.
"The Maple Oaks development at the former city service site has been a phenomenal success by every account," Marl said. "I'd love to see a future development on the northern side and would support incentivizing it in any way we can."
Godfrey said he was still in favor of asking for the full $150,000 amount.
"Thank you for considering this. We know it's unconventional, but we think it will make a difference in our ability go forth on the north side," he said.
There is a timing issue. In order to qualify for the most recent taxable values (set the baseline lower), the process would require council to make a decision on this matter at its April 5 meeting.