Developers outline two RHID requests, say state aid could offset local taxes; board asks for more studies

Two developers asked the Lansing School Board to endorse putting new Revenue-Housing Incentive District (RHID) plans on public notice, arguing the tax-increment incentives could increase state aid for the school district and ease local property-tax burdens. Riverbend Heights' attorney Joe Oakes and developer Jeremy Greenemeyer presented separate projects and financial analyses and answered questions from board members during Item 3.1 of the meeting.

Oakes, an attorney with the Paulsonelli Law Firm representing Riverbend Heights, told the board the project team paused an earlier RHID request to allow more dialogue with the school district and the district's financial adviser at Raymond James. He said the developer is seeking a 20-year RHID with 80% of incremental tax revenue to reimburse the developer and 20% to taxing jurisdictions. "There is a gross reimbursement cap both in terms of absolute dollar amount," Oakes said, and a "performance-based cap" that would reduce reimbursements in a downside scenario.

Oakes and the project team emphasized a financial analysis by Raymond James, which they said shows the RHID could change how much of the district's debt is paid by state aid rather than local property tax. Oakes summarized the consultant's results: under the study's assumptions the district's bond-and-interest state aid share could rise from about 52% to as much as 76%, producing an estimated $400,000 a year in additional capital-outlay state aid in the model. "If the project were to move forward with RHID... the school district state aid percentage could increase from 52% to as much as 76%, meaning more of the school district's outstanding debt would be paid not from local property taxes, but from state aid," Oakes said. The analysis also found that if identical homes were built without incentives, the citywide bond-and-interest levy would fall only about 0.3 mills, roughly $3.45 per $100,000 of assessed value.

Marty, the district finance official who assisted on the presentation, said the Raymond James numbers are based on several assumptions: the district's existing debt, adding about 400 students from the development, and maintaining the current out-of-district student counts. Marty said the 76% projection applies to pre-2015 bond debt treatment and noted that legislative changes since 2015 affect how future bonds would be calculated.

Board members repeatedly pressed the developers and consultants on assumptions and risks. One board member asked why the consultant used an assumption of one student per household for the new development when Lansing's current districtwide ratio is about 0.5 students per residence and state or national averages are higher (1.7'1.9). Oakes said he was relaying the Raymond James assumption and that the project team would be glad to have the consultant run alternative scenarios. A board member who asked about next steps said a more localized study and a capacity analysis would be placed on the June 9 agenda to develop more precise estimates of student generation by home value.

Developer Jeremy Greenemeyer presented a separate RHID request for Fairlane Townhomes Phase 2, a market-rate multifamily expansion north of the IHOP in Lansing. Greenemeyer said phase 1 includes 14 units (triplexes and duplexes) and phase 2 would expand the site to about 21 units, adding one-bedroom single-level units among duplexes and triplexes. He described higher interest rates and increased site work as the main impediments and requested the same RHID structure: 80% abatement for 20 years. "For us, this is gonna be a very much a breakeven, breakeven project," Greenemeyer said, adding the project could lose money in early years but is a longer-term investment for a local build-and-hold owner.

Greenemeyer provided local occupancy data and estimated the phase-2 student impact at roughly two to three students based on occupancy patterns at phase 1. He said the site requires additional curb, gutters, sewer extensions and off-site drainage work that raised the project's cost and justified the RHID request.

Several board members said they were concerned about missing financial details. One asked how much profit the developer expected; Oakes and Greenemeyer declined to provide a dollar figure at the meeting, saying they did not have that figure available. Board members also raised broader policy questions: how multiple RHIDs in nearby jurisdictions have worked, whether the RHID gains are temporary when the RHID term ends, and how future bonds or legislative changes could alter state aid projections.

No formal vote on either RHID plan occurred at the meeting. Oakes said the city must call a public hearing and that any new RHID plan requires a minimum 30-day notice; if the board and city show positive feedback, the hearing could be scheduled after that notice period. Board discussion included a request to have Raymond James run alternate scenarios (for example, with fewer out-of-district students or without a future bond) and to receive a localized student-generation and capacity study before the board takes further action.

Votes at the meeting that were recorded included routine procedural matters. At the start of the meeting, a motion to approve the agenda passed on a roll call that included: Kavi (yes), Broomgard (yes), Grama (yes), Yalcom (yes), Workman (no), Wood (yes) and Bolling (yes). Later the board voted to enter executive session for employer-employee negotiations; the motion passed on roll call. The meeting later adjourned by vote.

The board asked the developers to provide clearer, localized numbers, including a developer profit estimate and additional runs of the Raymond James model with alternative assumptions. Board members said they want a transparent set of working assumptions and more precise local studies before considering formal action on any RHID plan.