At its meeting on Monday, February 12, 2024, the Saline City Council voted unanimously to approve a 425 Conditional Land Transfer Agreement with Lodi Township for the property located at 865 N. Ann Arbor Street. Once the contract is signed by officials from both municipalities, the 7.31-acre Lodi Township property will be annexed into the City of Saline, under agreed upon conditions, over the next 25 years.

In a memo to the city council sent by City Manager Colleen O’Toole, she stated the consideration of the agreement is in response to a request from the owner of the private property, who indicated the likelihood that the property would be redeveloped for housing.

“It’s a long time coming for the individual property owners. They’ve been petitioning for quite some time. Prior developments have fallen through. But the hope is now that we have this agreement in place, we can move forward with redevelopment of that parcel,” said O’Toole.

According to the agreement, the property requires public improvements and services like water and sewer utilities to be attractive for commercial development. The costs for improvements and new infrastructure are prohibitively high for a single property owner–and even Lodi Township–so this is where 425 Land Transfer agreements are helpful.

425 Agreements are a designated way for two municipalities to share tax revenue from new or growing development projects. In this case, both Lodi Township and Saline would benefit from the commercial development of the property. Since Saline does have “the capacity to furnish improvements and services,” according to the agreement, the development project is better positioned for success within Saline’s jurisdiction.

Essentially, the agreement says that Lodi Township will transfer the property to the City of Saline, and going forward, Saline, “shall have full authority and municipal jurisdiction over said Development Property…The municipal services to be provided by City to the designated Development Property include but are not limited to, zoning administration and jurisdiction; sanitary sewer; building, electrical, plumbing, mechanical, and other inspection services; ordinance enforcement; special assessments; fire/rescue services; property tax assessing; tax collection; and voting.”

In exchange, Saline will pay the township an annual amount equal to twice the township’s annual operating millage rate for tax years 2024 through 2034. The annual payment is twice the millage rate because while the payments will only occur for ten years, they are intended to cover the full twenty-five years of the agreement.

According to comments made by O’Toole at the meeting, the terms are structured that way because it limits the administrative and operational burden to only ten years while still allowing the agreement to be in place for the full twenty-five years.

Because the agreement was already approved by Lodi Township at its February 6th meeting and already has the approval of the city’s legal counsel, following the affirmative vote on Monday, the document heads to the State of Michigan Office of the Great Seal for review and to have the boundaries officially updated.