Berrien County holds public hearing on Watervliet housing brownfield plan

Berrien County paused its meeting to hold a public hearing on a proposed brownfield plan that would support construction of 19 single-family homes in the city of Watervliet, county community development director Dan Fetti said at the hearing.

The plan, drafted by Michigan Growth Advisors and proposed by developer Allen Edwin Homes, would redevelop a roughly 7.5-acre parcel east of M-140 near Red Arrow Highway. The project calls for 19 homes — 15 to be sold at market rate and four to be rented to households at or below 120 percent of area median income for 10 years — with an estimated total investment of about $12.6 million. Construction is likely to begin this fall and the developer estimated completion by 2027, Fetti said.

The county hearing focused on technical requirements under changes to the Brownfield Redevelopment Financing Act adopted in 2023, which made certain housing activities eligible for tax-increment financing (TIF). Fetti described how the amended law allows TIF to reimburse infrastructure and a so-called rent-loss subsidy that covers the difference between market rents and rents affordable to income-qualified households.

Fetti said the plan’s eligible project costs include a Phase I environmental review (about $2,500), site preparation and drainage work, and roughly $750,000 of water, sewer, storm, electrical, lighting and curb improvements. He estimated total eligible activities at about $2.5 million plus accumulated interest (calculated at a 5 percent eligible interest rate in the plan).

On the rent-loss subsidy, Fetti used published HUD fair-market rents for Berrien County to illustrate the calculation. He said a countywide four-bedroom HUD rate the plan used is about $3,800 per month, while a 100 percent area median income (AMI) household of five in the region has gross annual income of about $94,000 and — after subtracting an estimated $460 monthly utilities cost — could afford approximately $2,500 per month in housing costs. "You wind up with what the loss is to the developer," Fetti said, describing a difference of roughly $1,700 per month per unit. Multiplied by 12 months and four units, he said the annual projected rent loss is about $84,000 and the capped total rent-loss subsidy in the plan is $840,000 for a 10-year affordability period. Fetti noted the developer will have to certify rents annually and the state housing agency will review compliance.

Fetti and presenters told commissioners the plan proposes the first year of TIF capture to begin in January 2026 and estimated the capture period would run about 18 years. He showed a projected gross tax capture over the life of the plan that included approximately $324,000 in county general fund capture and about $1,000,000 for the city; he also said captured school taxes are paid by the state treasury to the local school district under current law and thus represent new money directed to Watervliet Public Schools.

Representatives from the developer and consultant team answered public and commissioner questions about ownership, unit design and site drainage. John Lovely of Allen Edwin Homes said the developer will retain ownership of the rental units during the controlled-affordability period and that rental and for-sale homes will be intermixed and built to the same standards. Jared Lutz of Michigan Growth Advisors described likely application and leasing procedures: Copper Bay, a leasing and property-management affiliate, will manage applications and occupancy and the developer expects allocations will be first-come, first-served subject to income eligibility checks and reporting requirements.

City manager and police chief Tim Sutherland attended and the city’s commission has already approved the brownfield plan, Fetti said; the Berrien County Brownfield Redevelopment Authority also unanimously recommended approval. County commissioners asked technical questions about drainage, home sizes (roughly 1,600–2,200 square feet, presenters said) and process. A county commissioner noted the county BRA recently updated its fee schedule to cover higher administrative and reporting burdens for these new housing brownfield projects.

No county adoption vote on the brownfield plan occurred during the hearing. Fetti said the next steps are to negotiate reimbursement agreements, prepare an Act 381 work plan (a detailed construction and reimbursement document used in Michigan brownfield practice) for the Brownfield Authority, and submit materials to the Michigan State Housing Development Authority for review; if approved, tax capture would begin per the schedule in the plan.

The board recessed the hearing and returned to regular session after procedural motions to open and to close the public hearing passed on roll call.