Washtenaw County officials preparing state grant application for Georgetown Mall redevelopment
An artist rendering of the project known as Packard Square. Washtenaw County officials are preparing an application to seek $1 million in funding from the state to help the developer finance the project.
From The Harbor Companies LLC
Brett Lenart, who oversees administration of the county's brownfield program, told county commissioners the developer of the mixed-use project known as Packard Square has withdrawn a request that the county apply for a $1 million state loan, but the county still has a chance at securing a $1 million state grant for the project.
"We initially thought from correspondence from the state that it was very unlikely that the grant would work without the loan," Lenart said. "Since then, they said try."
State officials seem to like the project, Lenart added.
The developer — Bloomfield Hills-based Packard Square LLC — is counting on the money from the Michigan Department of Natural Resources and Environment to assist with environmental cleanup activities deemed necessary to prepare the site for a redevelopment.
If the grant application is successful, the county would be responsible for using the $1 million to pay for remediation work on the site along Packard Road.
Lenart said it's possible the county could submit the $1 million grant application to the state as early as next week. He said the county also would need to submit a work plan to the Michigan Economic Growth Authority and the MDNRE.
The developer hopes to start construction on a four-story building containing 230 apartment units and 23,790 square feet of retail space later this year.
Commissioners initially expressed hesitations last month about helping to finance the nearly $50 million project. The board eventually approved a tax-increment financing plan that would forestall realization of any new taxes from the development for 14 years, but commissioners were more cautious about backing a $1 million loan with the full faith and credit of the county.
Based on the feedback and concern expressed by commissioners, the developer is not interested in pursuing the loan anymore, Lenart said. He noted that the grant dollars are more critical to the project's success than the loan.
"The loan was an incremental benefit in that we were able to borrow the money at a better rate than the developer can," he said. "The grant dollars are more critical. If those don't happen, I think that would probably put the project into more question."
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
eastsider2
Mon, Jun 6, 2011 : 7:54 p.m.
Questions that should be answered - $270,000 of back taxes are due for 2009 and 2010 - but how much and to whom? How long has Schubiner owned this property? We know it's been quite some time (2001? longer ago?) but he should have been well aware of the contamination from the dry cleaner there when he purchased. The history of this property needs to be examined - this is not some wide eyed developer coming in to save a blighted area. This is a guy who ran the place into the ground and is now proposing a fix - if we help him pay for it. He's proposed fixes before. There was a supposed auction of the place that got canceled. What happened before should greatly influence what we do today about this property.
Ryan
Fri, Jun 3, 2011 : 2:02 p.m.
Veracity, after reading the article you linked it seems to me that Mr. Schubiner is fishing for tax subsidies. I hear that can be highly profitable for those who secure them and very bad for communities who get stuck with them. 14 years is a long time to be stuck with no tax gains. If it's such a good idea to build this development then the developer should be able to do it himself without the taxpayers financing it. Just my opinion.
Veracity
Fri, Jun 3, 2011 : 5:11 a.m.
As I understand about $270,000 of back taxes are due for 2009 and 2010 but Craig Schubiner is appealing in hopes of obtaining a reduction. The County Commission was told that he will pay the taxes once the appeal has been settled. In fact the County Commission stipulated that the project can not go forward until the back taxes are paid. Setting aside the TIF for 14 years supposedly will return Schubiner's remediation costs due to contamination of the site. However, Schubiner would have been prudent to determine the degree of any contamination prior to purchasing the property since he could have been expected to pay for the clean up as part of the development. The TIF exemption can be considered an enticement for Schubiner to proceed with the project.
serene
Fri, Jun 3, 2011 : 4:35 a.m.
Why is the city not insistent in having the back taxes paid on the property? Why are they still courting with the idea that this developer will successfully pull this off? Veracity is absolutely right. Why are officials wasting time debating on $1 million when the whole project would need $50 million? Officials should demand that the developer pay his back taxes or put the property in foreclosure. Somewhere out there is another investor who may have a better idea on what to do with this property and not have to use public money to fund private interest.
johnnya2
Fri, Jun 3, 2011 : 5:35 a.m.
yeah other than that whole due process thing the county and state COULD foreclose. If the developer does not pay his taxes and the project gets finished that would be a bonus to the county now wouldn't it? This is a stupid argument all around.
snapshot
Fri, Jun 3, 2011 : 3:58 a.m.
so we have commissioners making decisions without knowing the rules to base those decisions on? That's what I get from this story. Hey guys, how about doing some homework and research before grandstanding on ignorance. People in business want to get things done, they profit from their expertise, they don't "pretend" to have expertise.
treetowncartel
Fri, Jun 3, 2011 : 3:35 a.m.
How about making this a dispensary enterprise zone. Just start some reverse condemnation proceedings and establish the State's first municipal compassionate zone.
leaguebus
Thu, Jun 2, 2011 : 9:34 p.m.
Why is this a county loan? The site is in AA.
johnnya2
Fri, Jun 3, 2011 : 5:32 a.m.
In case you missed the memo, Ann Arbor is part of the county.
Ryan
Thu, Jun 2, 2011 : 2:20 p.m.
14 years of no tax gain to the County? What is the point of supporting this project if we gain no taxes from it? Do our commissioners really think the minimum wage jobs this project will provide will help our area enough to justify 14 years of tax increment financing? I don't know what my commissioner, Ronnie Peterson, thinks because he will return neither phone call nor email. Thanks for nothing Ronnie.
eastsider2
Thu, Jun 2, 2011 : 1:34 p.m.
Plus, what about the back taxes owed on this property?
Veracity
Thu, Jun 2, 2011 : 1:06 p.m.
If the Packard Square LLC which is the developer of the proposed Georgetown Mall can obtain the nearly $50 million financing for its project then why is receiving a $1 million grant from the state necessary to proceed? County Commissioners have been warned that Craig Schubiner who is the involved developer was associated with the failed Bloomfield Park development (see link below) that entered bankruptcy during construction, leaving many contractors unpaid and a physical blight for the community. The developer should be required to provide a surety bond for completion of the Georgetown Mall project. If the developer receives a fee from the borrowings then payment of that fee should largely be delayed until completion of construction. <a href="http://www.theoaklandpress.com/articles/2010/05/29/news/local_news/doc4c01c82e02500781419398.txt?viewmode=fullstory" rel='nofollow'>http://www.theoaklandpress.com/articles/2010/05/29/news/local_news/doc4c01c82e02500781419398.txt?viewmode=fullstory</a>