At tomorrow night’s Ypsi City Council meeting, our elected officials will be considering a proposal concerning the development of 3.14 acres at the intersection of South and River streets, on the 38-acre downtown parcel commonly referred to as Water Street. The proposal, which you can download on the City’s website, outlines the intention of Indiana-based developer Herman Kittle Properties (HKP) to construct a 76-unit, multi-floor affordable housing complex on the banks of the Huron River. The project isn’t exciting in any aesthetic sense (see image above), and it’s a long way from the higher-end single-family housing our elected officials had been aiming for 14 years ago, when first setting down the path toward remediation and redevelopment, but it’s hard to imagine any scenario where our City Council would say no. We’ve just got too much debt to hold out any longer, waiting for the truly transformative project that would help turn the City around and bring good jobs in the process.
Here, with the specifics as to what we currently owe on the property, which we went so far into debt to acquire in 1999, is a clip from today’s Ann Arbor News.
…The city still owes around $24 million on the Water Street debt, a decrease from 2006 when the city owed close to $30 million. The principal amount owed on the property was $15.7 million, but due to interest, the costs ballooned.
In 2014, the city will have to pay $1,340,727.50. The interest rate will rise to 5.75 percent in 2014 and continue to increase unless the city is able to refinance the debt, which it plans to around 2016.
The land has lost $1,995,335 in value within the past year, but the city has successfully committed $4.6 million in fund balance for the next five years to pay for the annual debt payments resulting from the sale of bonds to finance acquisition and demolition on the site…
Assuming we go forward with the HKP proposal, they would give us $157,000 upfront, for the 3.14 acres, and invest another $1.7 million in bringing roads, sewers and other infrastructure elements to the site, which would ostensibly make it easier for the City to then sell the adjacent properties. And, perhaps most importantly, it’s estimated that the building owners would pay approximately $73,000 a year in taxes, based on a taxable value of $2 million. Also worth noting, it sounds like they want to get moving on the project as soon as possible, which means that those tax revenues would likely start rolling in by the end of 2015. (HKP wants to have a signed purchase agreement with the City by April, break ground in October 2014, and begin leasing units in August of 2015, according to the Ann Arbor News report.)
The entire project is estimated to cost $12.1 million, much of which would be financed by way of Rental Housing Tax Credits and tax-exempt bonds from the Michigan State Housing Development Authority. And, as that’s the case, rents, in accordance with the terms of these programs, will be set at a level deemed affordable by the State. According to HKP, that means rents would range from “$597 for a one-bedroom (unit) to $1,125 for a four-bedroom (one).” (The current plan calls for 13 one-bedrooms (738 square feet), 21 two-bedrooms, and 21 three-bedrooms (1502 square feet).)
A few years ago, I think I would have had quite a bit to say about this. Now, though, in the wake of the Family Dollar announcement, I think I’ve come to accept the fact that Water Street isn’t going to become what I’d wanted it to be. For a while – and I think this was true for a lot of us – Water Street was a beautiful blank canvass that we could project our dreams for the future of our community on. We all, of course, had different visions for what should ultimately be there. We all had our own ideas as to what would right the ship and get Ypsilanti heading in a more sustainable direction. And we were all passionate on the subject. Personally, I’d envisioned a co-housing development, a year-round farmers’ market, an expanded food co-op, a thriving public arts park, and space along Michigan Avenue for locally-owned businesses. There were a million ideas, and they all shared a common attribute… They were hopeful… The unpleasant truth, however, is that those with money aren’t from our community, and the way they see Ypsilanti isn’t the way that we see it. And, as a result, we’re not talking about indoor farmers’ markets, but dollar stores, fast food franchises and more Peninsular Place-like apartment complexes. To those outside our community, we just represent money that can be siphoned off. They don’t, in short, see our potential. They don’t care about our long term viability as a community, only what they can get from us today. And that’s sad. Sadder still, though, is the fact that I’ve come to accept it.
Here’s the thing, though… Regardless of what happens on Water Street, life will continue and people will still keep fighting to make Ypsi great. It just won’t all happen on that 38 acres of downtown real estate. And maybe that’s OK.
What are your thoughts? I’d like to know.
update: I didn’t intend for this post to sound fatalistic. I haven’t “given up” on anything positive ever taking root on Water Street. I just meant to say that I’ve come to terms with the fact that Water Street isn’t going to be the thing that gets Ypsilanti moving in the right direction. And, for what it’s worth, I’m not altogether down on the idea of this housing project. Density is a good thing, as is affordable housing. I’d like to know more about the company, though, and how they manage their other properties.