Ypsilanti City Council member Peter Murdock took to Facebook earlier this evening with the following defense of Water Street Flats, the controversial affordable housing development being proposed for downtown. As I know that many of you abstain from Facebook, as it reminds you of the fact that your friends have more interesting lives than you do, I thought that I’d share it here.
I would like to thank everyone who spoke at the Public Hearing Tuesday or contacted me directly or indirectly on the Water Street Development issue. I appreciated all the comments, questions and suggestions. The vote was split, but I assure you that the Mayor and members of City Council each acted in what they felt was in the best interests of our Ypsilanti Community given all the information that we had before us.
The Water Street Development needs a little historical context to understand the complexity of the issues involved in making the decision on Water Street Flats. Fifteen years ago the ill-conceived and misguided speculative development venture known as Water Street was brought forth. The intention was to purchase 39 acres between Michigan Avenue and the Huron River, raze all the buildings, clean up any contamination and find a private developer to construct a mixed use residential/commercial complex to increase the City’s population and taxable value. By the year 2008 the project was moribund. The City was in debt to the tune of $19M with no source of revenue to pay off the debt; The 39 acre Water Street site was no where ready for development as there were still derelict vacant buildings to demolish and environmental concerns to clean-up. Two developers had abandoned the project as unworkable and the Great Recession had begun. The City was facing a financial crisis due to the recession, the housing crash, taxable value decline, loss of state shared revenue and Water Street debt payments of $1.3M to $1.6M annually.
The City then secured several grants totaling over $1M from the Economic Development Administration and the Neighborhood Stabilization Program among others to finish clearing the site and remediating much of the environmental concerns.
The City also opened up access to the site for building a temporary trail along the River by a group of volunteers. Later the City secured over $1M in DNR grants and local matches from the Downtown Development Authority and the Washtenaw County Parks and Recreation Commission to connect Water Street to Riverside Park and build the Border to Border Trail along the River on the Water Street site. That work is scheduled for 2014. A linear park along the River including the Border to Border trail of approximately 100 feet width and the length of the Water Street Property is a part of the newly adopted Master Plan and included in any plans for Water Street
As there were no developers that would take on a project this large, the City marketed the site in smaller parcels using the general plan of mixed use residential/commercial along Michigan Ave. and high density residential along the River as all the previous plans included and the planning commission adopted. In addition through the Shape Ypsi Master Plan process, an infrastructure and street grid plan was adopted to reflect an urban setting and some form guidelines were established to maintain an urban look to the Water Street development.
Now to the current proposal:
The Herman Kittle Properties (HKP) is proposing a $12.5 million, 80-90 unit multi-family brick-facade apartment building on approximately 1.7 acres located on the southeast corner of what will be the intersection of River and South streets in the Water Street Redevelopment Area. The proposal is a MSHDA financed development for “affordable” moderate to low income units.
If you took the word affordable off this proposed development, we would be falling all over ourselves to get it. Why? Because:
1. It utilizes 1.7 acres of property that consists of fill that is expensive and problematic to develop. In previous plans that area would have been open space, parking lot or storm water retention area that would provide little or no taxable value. By locating here we are in essence adding $1.6 to $2M of taxable value to the overall project area. Unlike other MSHDA financed projects this will pay full property taxes. No Payment In Lieu Of Taxes (PILOT) is involved.
2. It provides for high density housing, which is both needed for taxable value and population. If you recall the original proposal from Biltmore called for over 800 units with no commercial on the site and all the following proposals have had high density housing located along the River.
3. The proposal fits with our recently adopted grid system for the site and with the master plan concept of residential in the back and commercial/residential along Michigan Ave. It’s also a four story brick structure that fits in with the master plan and elements of form based zoning code that we are developing. The Freed plan embraced by the City had 4-5 story multiple residential buildings along the River.
4. It provides that the developer to build at their expense infrastructure that would be oversized and service more than their site. This includes building roads to City specs including parking, sidewalks, trees, water, sewer and storms. These roads would include River Street from Michigan Ave to the south end of the property, South Street from Park St to River St, Lincoln St. from South to the south end of the property and the ring road adjacent to their property. The utilities would be over sized to service additional property. The rec center would be connecting to the utilities at River Street, thus extending Parsons St similar to the other streets and we would have two-thirds or more of the Water Street site serviced by roads and utilities. With the roads and utilities basically in place, the property would be much more attractive to potential developers.
5. This development would reduce the city’s CDBG debt by $200K and provide an additional ~$135K annually to service the Brownfield and Tax Increment Finance Plan for debt service. This equals ~$75K of taxes per acre.
Now let’s talk about the “affordability” part of this.
1. It is a MSHDA financed project with a loan and tax credits but unlike other MSHDA projects, this one will pay full taxes.
2. It is not public housing – It is privately owned. There is no involvement with the Housing Commission.
3. It is not a Section 8 project – It has no site based Section 8 certificates. Families that hold individual based Section 8 certificates can apply to live there, as they can with any other rental property in the City, and go through HKD’s screening process. HDK’s other developments don’t seem to be “overrun” with Section 8 tenants They consist of 5% to 20% Section 8 families.
4. The income cap for this development is 60% of the average median income (AMI) of Washtenaw County (not Ypsilanti). The family AMI of Washtenaw County is $87,400. (For the City the AMI is 40,800) So 60% will be $52,400. A single person can earn up to $36,000. Most renters in Ypsi and Washtenaw County will be eligible to live there and its location along the River and close to downtown and depot town and the recreation center along with its newness will make it quite attractive. Because of the wide range of income eligibility, this development is more mixed income than low income.
5. The income guidelines are similar to the Old Ypsilanti High School Project which there wasn’t a huge outcry about.
So who are these potential tenants: These are our friends and neighbors. They are the folks who serve us the lattes at the Ugly Mug or B-24, or the clerk at the Ypsilanti Food Co-op or Puffer Red’s, or the servers at the SideTrack or the Tap Room. The cook at Beezy’s or the City’s recently hired firefighters who respond to your emergency within four minutes, or our recently hired DPS worker who has worked 12 to 16 hours a day clearing the snow from our streets, or the adjunct professors at EMU or WCC, or those newly hired techies who work in Ann Arbor but can’t afford to live there. These are the folks that are eligible to live in this development.
One big positive for this developer is that Herman Kittle still owns their developments. They are not interested in a quick turnover and take the money and run as the Peninsular Place developer did. Several Council members and City Staff visited sites managed by HKP and were satisfied with their operation. There tenant selection process is comprehensive. HKP has done energy efficient LEED buildings and this development will be complying at a minimum with MSHDA green requirements.
If their financing gets approved by MSHDA, the development will go through the City’s Planned Unit Development (PUD) process and many of the details of orientation, parking, green elements and general appearance will be hashed out before it comes back to City Council for final site plan and PUD approval.
On balance, I see this development as providing many of the necessary elements for the successful development of the Water Street area as a whole by making it more attractive to developers, not less. This development is less than two acres. There is still two-thirds of the property left for development. The goal is to have a mixed use development over the entire Water Street site. We still are pursuing other residential and commercial developments for this site including a grocery store.
With this project, I am as optimistic as I have ever been about the success of Water Street and the City’s ability to survive the financial crisis it has caused. There is plenty of acreage left on the site to develop into that mixed use concept that the community has embraced.