A PILOT is a tax exemption for a housing development, with the Developer/Sponsor being responsible for making an annual payment as compensation for services provided to it, such as police and fire protection and other essential services. Under the ordinance amendment presented here, the property owner would be responsible for annual payments of four percent (4%) of the "shelter rents" for all income restricted units, which is anticipated to be all likely 25 units in the development for forty (40) years. "Shelter rent" means the total collection of all payments from the occupants of the development representing rents or occupancy charges, exclusive of utilities furnished to the occupants by the Developer or Sponsor.
The duration of a PILOT may not exceed fifty (50) years. This proposed PILOT would last for 40 years, the length of the mortgage, provided the Sponsor continues to meet the statutory requirements to be eligible for the abatement, as well as the requirements set out in the proposed ordinance. After the PILOT expires, the property would be assessed at a normal value and tax rate.
If this project is completed, then the first floor of the building at 17 W Michigan, which is currently vacant, would be a commercial space that would not be subject to the PILOT. The first floor and any commercial operation would be returned to the tax rolls. |
Section 18 of Chapter 882 was adopted by the City Commission at the March 17 meeting. At the adoption of this Ordinance, the Hamblin Opera House housing development conceptual plans provided for 30 units. The developer's final conceptual construction budget is forcing consideration of reducing the previously planned 30 units to not less than 25.
Battle Creek Unlimited (BCU) controls 17 W Michigan Ave, commonly known as The Hamblin Opera. This historic structure, built in 1868, was Battle Creek’s original entertainment venue. The Opera House was later converted to a department store but has been vacant for several years. HDC proposes to rehabilitate the building, including its historic 1948 façade along W Michigan Ave, and adapt the upper floors into a minimum of twenty-five new apartments.
This proposed project would create new housing options for residents at or below 30%, 40%, 50%, 60%, and 80% of Calhoun County’s area median income. In housing nomenclature this is a truly mixed-income approach, serving extremely low-income, very low-income, low-income, moderate-income, and "workforce" households simultaneously. HDC believes that by siting the buildings directly adjacent to two luxury, market rate apartment buildings (Battle Creek Tower and The Milton) this project would turn Battle Creek’s Central Business District into a model of housing inclusivity.
The ≈48,900 sf building consists of a basement and four above-ground stories. The ground floor includes approximately 11,500 square feet of vacant commercial space while the upper floors are empty with few existing partition walls. HDC proposes to adaptively reuse the basement, a small portion of the ground level, and the upper floors. At least twenty-five apartments would be constructed inside the second, third, and fourth floors and the basement would be converted to underground parking for 30+ vehicles.
HDC and BCU are actively seeking a commercial tenant or condominium owner for the first floor, but no financing for that portion of the building is contemplated under this development plan. The commercial space was most recently built out as a restaurant and appears to be fit for occupancy with minimal updates.
The building already includes a walk-out flat roof on top of the third floor, which the project team intends to convert into a roughly 4,300 square foot roof deck for residents of both buildings. Apartments would be similar in amenities to Sophia Square but residents would also benefit from the historic architectural elements of the building, which include brick walls, high ceilings, vintage window walls, and exposed heavy timber beams. All units would include dishwashers, garbage disposals, washers, dryers, frost free refrigerators, self-cleaning ovens, ceiling fans, and resilient flooring.
Although BCU currently owns the parcel where this housing development is planned to be built, HDC, the developer, intends to submit for LIHTC (tax credits) to MSHDA at the early funding round, which has been pushed to May as a result of the COVID-19 Pandemic. Thus they have requested that this ordinance amendment be in place by that date in order to increase their chance of being selected for funding since they would be competing with numerous other projects throughout the state, and most projects do not receive tax credits.
|