PILOT ordinance repealed after veto

By: Brian Louwers | Warren Weekly | Published September 13, 2013

WARREN — A controversial plan to build new rent-to-own homes on dozens of properties in south Warren, supported by an ordinance that would have let the owner pay a fee to the city instead of taxes, appears dead.

Late last month, council members unanimously voted to repeal a payment in lieu of taxes (PILOT) ordinance that supporters argued was required in order for the owner’s intended developer to seek tax credits through the Michigan State Housing Development Authority. The ordinance was originally approved by a 6-1 vote July 30 and potentially could have allowed the Beresh Group Inc. to redevelop 42 properties in the neighborhood near Lincoln High School on Nine Mile Road east of Van Dyke.

Citing concerns about the city’s number of existing rental homes, a lack of clarity about the process and the “rushed” request to approve the PILOT ordinance, Council member Kelly Colegio cast the lone vote against the original request in late July. Colegio also said she had questions about the owner, Macomb Properties LLC, which took possession of the properties along with hundreds of other tax-reverted parcels after the total available was bought in bulk from the county last year.

Warren City Council Secretary Scott Stevens later sought to reconsider his prior vote in favor of the ordinance, but the council denied his request.

Mayor Jim Fouts eventually vetoed the council’s approval of the ordinance, citing concerns over fairness in taxation and a potential for “favoritism” with respect to developers.

Warren City Council President Cecil St. Pierre called on the council to repeal the PILOT ordinance on Aug. 27 in light of the mayor’s veto, but he likened the situation to a lost opportunity.

“You’ll never see an opportunity like this again, based on the fact that you have one owner who purchased these vacant lots and you have one developer that MSHDA can work with to make this happen,” St. Pierre said. “I hope that someone does do something with these vacant properties. Without some inducement, you’re not going to have development of single-family homes with this quality and this character, which will build up our neighborhoods.

“I think it’s a loss for the neighbors that no property is being developed on these vacant lots,” St. Pierre said.

Council member Pat Green, who also voted in favor of the ordinance, said “bold action” would be required to make “dramatic change” in Warren neighborhoods.  He alluded to “scare tactics” and “misinformation” about whether the proposed development was in fact going to build rent-to-own homes or simply low-income rentals.

“If we want to redevelop, and when we say that the city needs to do something, that’s us,” Green said. “That’s the council. That’s the administration. That’s everyone that works at City Hall. We need to take action.

“Getting down, getting our hands dirty and doing the work — that’s what a lot of us up here are here to do, and that’s what we’ll continue to do,” Green said.

Stevens told his colleagues the council’s requested action to support the plan was “hurry up, last minute” and added, “I can’t operate like that.”

He also said there were too many questions about the ordinance and the plan that were left unanswered.

Stevens previously pointed out that the development partnership listed in the approved ordinance, the Warren Homes Limited Divided Housing Association Limited Partnership, had not been registered with the state’s Department of Licensing and Regulatory Affairs when the council voted in July. St. Pierre later said the mistaken name listed in the ordinance was identified by city attorneys and clarified.

“There was too many unknowns, too many last minute things that took place that made myself, No. 1, and other council people uncomfortable with this project,” Stevens said. “I think, had there been a little bit more sunshine shined onto this project, I think that a lot of things wouldn’t have been an issue.”

Colegio said she couldn’t support a deal that would bring more rentals to the city’s south end.

“We have 6,000 registered rentals, and probably 1,000 or so more unregistered. We have 5,000 vacant homes,” Colegio said. “This city has a problem. We have a high number of rentals, and it’s growing. I just personally felt that we could do better.”