| 2 min read | by Lonnie Huhman, firstname.lastname@example.org |
A plan is being put in place to get 301 N. East Street, also known as the Rockwell Building project, cleaned up so it can be brought back to life to become a place to live and remember Chelsea’s history.
To help get the plan moving forward, the Chelsea City Council approved two decisions at its Nov. 18 meeting. One was for a Brownfield cleanup plan and the other was for a Commercial Rehabilitation Exemption Certificate.
Both city manager John Hanifan and community development director Julia Upfal briefed the city council before the decisions were voted on.
The plan details that follow here in the article come from Upfal’s reports.
JP Commercial Real Estate submitted the cleanup plan for the project, which has an overall proposal to use an estimated $8 million of private investment to turn the former industrial building into a residential one with 36 market rate apartment units. The plan would also see the building restored to preserve its historical character.
The site had long been used for industry, from 1909 to 1987, specifically as a place to manufacture stove and auto parts. However, it has stood vacant for a long time since.The cleanup will include such things as lead paint and asbestos being safely removed from the building while the soil contamination would be addressed, including by putting in place vapor mitigation controls.
The Brownfield Plan would see the developer reimbursed for eligible environmental cleanup efforts, which is estimated to be around $659,605, through a tax incremental financing plan over a period of time with a cap of 20 years. The TIF captures new taxes paid due to the increased taxable value on the property. The existing taxes being paid currently on the property will be continued to be paid to the local taxing jurisdictions.
The Michigan Economic Development Corporation defines a Brownfield TIF as allowing, “applicable taxing jurisdictions to receive property taxes on the property at the current level and capture the incremental increase in tax revenue resulting from a redevelopment project. Under a MSF approved Work Plan or Combined Plan, projects can seek reimbursement from state and local property taxes for eligible non-environmental activities. Projects can also seek reimbursement from state and local property taxes for eligible environmental activities.”
Upfal said, “The enclosed Pro-forma includes a projected for Owner Equity Internal Rate of Return at 3.2 percent. Without the Brownfield TIF the Owner Equity Internal Rate of Return would be reduced to .6 percent; at this rate, the developer would not be able to complete this project. Therefore, the proposed Brownfield incentives passes the ‘But, For’ test asking, ‘Would this project happen but for the use of TIF?'”
In addition to the city council seeing a good upside with the project, so does the historical society.
During public comment, Jan Bernath spoke on behalf of the Chelsea Area Historical Society about the project’s historical significance. She said the historical society has long discussed seeing that location adaptively reused. She said they appreciate the city’s efforts to help.
Bernath said the restored location will add to the positive landscape of historical buildings in Chelsea, and the historical society is offering any help it can give.
The approval of the Commercial Rehabilitation Exemption Certificate permits tax abatement for 10 years on the improved value of the property. The intent of this certificate is to encourage reinvestment and economic growth in an area that is financially burdensome to redevelop and has consequently experienced extended vacancy.