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City approves brownfield plan for senior development

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published April 13, 2016

 Part of the brownfield plan includes an agreement that the developer will improve the baseball diamonds on the western portion of the property and deed the land back to the city.

Part of the brownfield plan includes an agreement that the developer will improve the baseball diamonds on the western portion of the property and deed the land back to the city.

Photo by Kristyne E. Demske

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ST. CLAIR SHORES — The developer building a new senior living complex on the site of the former St. Gertrude Church will receive a tax break of up to $700,000 under a brownfield redevelopment plan of the property, which the city has deemed blighted and functionally obsolete. 

Cypress Partners, of Birmingham, which has purchased the land and plans to build a three-story building that would contain 139 units for independent and assisted senior living, recently had its plan approved by the city’s Brownfield Redevelopment Authority. The development would front on Jefferson Avenue with proposed entrances off of that street, as well as St. Gertrude and L’Anse streets. The building would be a mix of one- and two-bedroom units.

Removing the existing structures and redeveloping the property encompasses more than $1.3 million in eligible brownfield redevelopment activities, in part because of asbestos abatement and the removal of an underground storage tank containing petroleum hydrocarbons from underneath the school parking lot. However, the city and the developer have reached an agreement where a maximum of $700,000 in local taxes would be captured by the developer to help pay for that redevelopment, or for a period of up to nine years, whichever comes first.

The property did not generate any tax revenue for the city while it was owned by the Archdiocese of Detroit. However, the city did assess the property when the tax year changed, said Cypress Partners’ brownfield representative, Nicholas Maloof. It was assessed at about $1.7 million in taxable value, creating a base of $25,000 in local taxes.

“It’s actually creating $25,000 of annual taxes per year that will stay at the base, that will not be captured,” he said during the April 4 City Council meeting. “We’ll really only be capturing (about) $75,000 per year. 

“When we originally wrote this plan, we were capturing 100 percent. Because the $25,000 is now on the tax roll and that’s what the current tax bill (is) ... we can’t capture that anymore.”

The brownfield plan allows the developer to capture only increased taxes above the base tax, and Cypress Partners will still have to pay school and debt millage taxes.

The agreement, however, also calls for the developer to reconfigure and improve the baseball diamonds on the western portion of the property, and then deed the diamonds back to the city.

“We didn’t own those baseball diamonds before,” said City Manager Michael Smith. “We used them because the church let us use them.”

Now, he said, they are receiving improved property back from the developer and have an agreement on parking so that the diamonds can continue to be used for Little League and softball activities in the city. 

“Everybody walked away satisfied that both parties benefit,” he said. “This is going to be a real nice development.”

The taxable value of the property is determined by the income the developers bring in by filling the units, Smith said. As it is not expected to be fully completed and filled until year three of the project, the full taxable value will not be realized until then. 

Maloof said that the full tax bill, when the project is complete, will be about $372,000, but that includes other taxes that are not capturable by the developer. 

The $700,000 is expected to be paid off in about seven years, but the city instituted the nine-year cap to make sure the developer doesn’t drag out the process.

“It would start once we get this approved,” Maloof said. “The end of this year would be the start of year one. The next year — he’ll probably finish it (in) 2017 — at the end of 2017, it would be reassessed again.”

City Councilman Peter Rubino said he was pleased with how the agreement turned out.

“I think that nine-year cap is very important and I really, just knowing Mr. (Mike) Parks, I don’t anticipate any delay in getting going. I know they’re excited and ready to get going,” he said. 

Mike Parks, of Cypress Partners, told City Council April 4 that they hope to begin demolition of the buildings at the end of the month or in early May.

Council unanimously approved the brownfield plan.

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