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Pontiac council backs $106M Exchange Flats redevelopment, requires 20% affordable units at 80% AMI
Summary
After extended debate about scale, parking and guarantees, Pontiac City Council concurred with Oakland County's transformational brownfield plan for a mixed-use downtown redevelopment expected to cost about $106 million and approved a binding affordable-housing agreement requiring 20% of units at 80% area median income, with stiff penalties for noncompliance.
Pontiac City Council voted Oct. 8 to concur with the Oakland County Brownfield Redevelopment Authority’s plan for the Exchange project — a mixed-use redevelopment that combines renovation of the Oakland Press building, a not-for-profit community hub at 91 North Saginaw ("El Centro") and the new Exchange Flats, a 287-unit apartment building — and approved an affordable-housing agreement tied to the project.
Developer representatives said the three-building package would total about $105–106 million and rely on a state transformational brownfield tool that captures state-level tax revenues (including withholding and sales tax increments) to fill financing gaps that lenders would otherwise not underwrite. The council adopted the county-concurrence resolution 5–1 after extended questioning on parking, contamination, and long-term public benefit.
Council members pressed for a stronger enforceability mechanism for the 20% affordability requirement; council then amended the affordable-housing resolution to add explicit penalty language. Under the adopted agreement, 20% of the building’s units must be affordable to households at 80% of area median income (AMI). If the developer fails to meet that requirement, the agreement requires the developer to pay the city the difference between ad valorem taxes that would otherwise be due without abatements and the taxes due with abatements, pro-rated by the number of noncompliant units, plus the city’s enforcement costs.
Developer Eric Toomey told the council the Exchange Flats building would average roughly $1,400 in monthly rents across studios, one-bedrooms and two-bedrooms in the current pro forma, and that many modeled rents already fall at or below the 80% AMI threshold. He said the project is not pursuing low-income housing tax credits but is structured to include a 20% set-aside at 80% AMI and a mix of market-rate units.
Supporters argued the project could be transformational for downtown Pontiac, creating new residents, office space and retail nodes centered on Pine Street and reactivating dormant parcels. Opponents and skeptical council members said they wanted guarantees that the long-term tax and economic benefits would meaningfully help city coffers after abatements expire; administration estimates project property taxes may approach roughly $650,000 annually for the Exchange building alone once abatements are burned off.
Next steps: the plan will proceed through county and state review as required by the transformational brownfield process; the approved local concurrence and the affordable-housing agreement are intended to help secure state-level approval and to bind the developer to the affordability and penalty terms the council adopted.
