New senior living community proposed in Madison Heights

By: Andy Kozlowski | Madison - Park News | Published July 5, 2019

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MADISON HEIGHTS — The city of Madison Heights is considering the development of a luxury senior living community on Dequindre Road, between 12 Mile and 13 Mile roads. The proposal, by developer Cypress Partners, is for a 120-unit housing development that includes affordable options for moderate- and low-income individuals, to be constructed across three parcels located at 30021, 30031 and 30071 Dequindre Road.

But first, the City Council will have to approve an ordinance to allow an arrangement called Payment in Lieu of Taxes, or PILOT. The council was planning to consider the measure on first reading at its July 8 meeting, after press time, followed by a second reading at its July 22 meeting. The PILOT terms have been in negotiation between the city and the developer for the last several months.

PILOT is allowed instead of normal property taxes for qualifying developments, in accordance with the Michigan State Housing Development Authority, or MSHDA. PILOT is an annual service charge to be paid by housing classes exempt from taxation under the MSHDA Act of 1966, at a rate lower than the property owner would pay if taxed normally.

In the case of the agreement with Cypress Partners, the proposed rate is 4 percent of rent for low-income units, minus the cost of utilities, for a term of 40 years, as required by MSHDA. PILOT would take effect with approval from MSHDA once 42% of the units are occupied by moderate- or low-income tenants.

At press time, the city was also working on additional agreements to be presented to the council sometime before or during the second reading, to be paid in addition to PILOT. These include an annual $25,000 emergency services fee and a lump-sum $100,000 emergency services payment, both of which would offset the anticipated increase in emergency medical runs to a senior living facility.

All told, based on the anticipated occupancy and rental rates, PILOT is expected to generate revenues of at least $64,360 each year, of which the city would receive an estimated $20,300. Along with the $25,000 from the annual emergency services fee, the city stands to make around $45,300 each year.

But in order for the housing development to occupy this space, Cypress Partners first needs to submit a rezoning request from R-2 to O-1. The developer will also need to secure a special use permit and a variance allowing residential uses on the first floor.

The proposed senior living community is aimed at seniors ages 55 and older, with one- and two-bedroom units available, as well as numerous recreational amenities.

“As our residents age, this style of housing option is being demanded,” said Madison Heights City Manager Melissa Marsh. “We have many outgoing and active adults in our community that would love to stay in Madison Heights, but currently do not have suitable options. This would provide a continued active lifestyle with no more snow removal, house maintenance and yard work.”

Madison Heights City Councilman David Soltis said he is open to the proposed development.

“I think that this could be a good opportunity for Madison Heights. This business model from this company seems to be doing well, and it’s also good to at least offer this option for assisted living for families to choose, if they so wish,” Soltis said.

However, he also wants the city to keep in mind the financial burden on seniors.

“Although this is an overall good idea, the worst-case scenario would be if seniors who are not capable of living in their homes independently then have to sell their home to pay the monthly rent and deplete their retirement fund. The costs at some of these places can be exorbitant,” Soltis said. “Ideally, we would see more state and federal government aid for seniors, helping them to live in their homes for as long as possible.”

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