Kalamazoo staff brief commission on Peregrine Peninsula rehab, requests $756,284 brownfield TIF
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Summary
City staff described a proposed conversion of the Peninsula Building into 11 apartments and outlined a request for a $756,284 Brownfield housing tax‑increment finance plan and an existing neighborhood enterprise zone (NEZ) tax abatement to support feasibility and interior remediation.
Jamie McCarthy, the city’s development manager, briefed the Kalamazoo City Commission committee of the whole on Feb. 16 on the Peregrine Peninsula project, a downtown rehabilitation of the historic Peninsula Building on East Michigan/Portage Street. McCarthy said the proposal would convert underused second and third floors into 11 residential units and reopen a restaurant on the first floor as part of the rehab.
Why it matters: McCarthy told commissioners the project would add housing downtown and support local businesses. She said the plan includes affordability commitments: three units at 60% of area median income (AMI) for five years and two units at 80% AMI for 10 years. Staff estimate the property’s taxable value would rise from roughly $590,000 now to over $1,000,000 at the end of the proposed plan’s term.
Incentives and costs: McCarthy said the Brownfield housing TIF request recommended by the Downtown Economic Growth Authority and the Brownfield Redevelopment Authority totals $756,284 and would be structured over 25 years to reimburse demolition, interior rehabilitation, asbestos abatement, minor infrastructure and soft costs such as engineering and design. She also noted a separate neighborhood enterprise zone (NEZ) tax abatement certificate the commission approved in May 2025, which freezes half of the property’s taxes and was estimated to provide roughly $200,000 in incentive value over about 15 years. McCarthy said the Brownfield plan would include an administrative fee estimated to cover about $74,000 of city administrative costs over the life of the plan.
How the incentives interact: Commissioners asked how the NEZ abatement and the Brownfield TIF would work together. McCarthy said the tools are effectively stacked in sequence: the NEZ tax abatement provides tax relief mainly during years 1–15 to improve cash flow for the project, then the Brownfield TIF captures incremental taxes later in the 25‑year pro forma to repay debt taken for remediation and rehab. She described that some taxing millages continue to flow to jurisdictions while the Brownfield authority captures a portion to repay project borrowing.
Outstanding details and next steps: Commissioners asked several operational questions — including who will operate the first‑floor restaurant (McCarthy said she had heard it will not be a new operator but did not have a confirmed operator name) and the exact uses of the $756,284 (McCarthy listed demolition, asbestos abatement, interior code upgrades, site prep and some soft costs). The Brownfield plan and related materials are on the commission’s business meeting agenda later the same evening for formal consideration. No formal vote on the Brownfield plan occurred during the committee session.
What’s next: The Brownfield plan was scheduled for the 7:00 p.m. business meeting that night; if approved by the commission the Brownfield TIF would be implemented in coordination with the Brownfield Redevelopment Authority per the recommended plan.