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Developer seeks tax abatement for 111 Elm Street renovation to make project financially feasible
Summary
City staff introduced plans for the renovation of 111 Elm Street into a ground-floor commercial space and seven residential units, saying construction estimates total about $1.5 million and that MEDC grant support and a tax-abatement through an obsolete property rehabilitation district may be necessary for bank financing.
City staff introduced preliminary plans for a renovation of 111 Elm Street, a downtown building proposed to contain a small commercial storefront and seven residential units. The presenter said construction estimates are about $1,500,000 and that participation by the Michigan Economic Development Corporation (MEDC) is helping make the project viable.
"1,500,000 is is what it comes in," the presenter said, describing final construction numbers and the scale of repairs needed, including a full roof replacement and extensive structural work. Staff said MEDC grant funding could cover up to half of the project costs, but the bank’s appraiser indicated the financing would still be difficult unless the city offered a tax-abatement tool to reduce the annual tax burden.
City staff framed the obsolete property rehabilitation district (OPRD/OPA) as a potential pathway to improve the project's cash flow and bankability; staff said MEDC was particularly interested because the project would produce historic downtown residential units. A staff member asked commissioners whether they were willing to consider establishing the district and said a public hearing and resolution would be required.
"So I wanted to just get the seed planted before we, like, launched into some detailed information," one staff member said, outlining a timeline that would include additional information at the next meeting and a public hearing targeted for Sept. 2. Commissioners discussed the possible term of any tax abatement (options of five to 12 years were mentioned) and asked staff to coordinate appraisal and financing steps with the bank and MEDC.
Why it matters: staff said the combination of MEDC grant funds and a local tax abatement could be the difference between the project moving forward or stalling. The commission asked for more detailed financials, specific abatement term options, and a clear timetable for the required public notice and hearing.
What’s next: staff will return with more information at the next meeting and prepare the public-notice materials for the Sept. 2 public hearing and subsequent resolution the commission would need to adopt to establish the district and associated abatement.
