by Harold C. Ford
A new, $17 million, residential-commercial project is being planned at the site of the old YWCA in downtown Flint according to Kyle McCree, director of Core Initiatives for the Flint and Genesee County Chamber of Commerce.
The project is spearheaded by the Uptown Reinvestment Corporation (URC), a nonprofit organization focused on the redevelopment and revitalization of downtown Flint. PK Housing and Management Company, based in Okemos, is slated to develop and manage what is being called The Marketplace, to be built at the old YW property bordered by Wallenberg, Third, and Fourth Streets. McCree said he is on loan to the URC from the Chamber for the project.
Connections between the two organizations — as well as the URC’s for-profit partner Uptown Developments — can be hard to parse. The URC and the Chamber of Commerce (FGCC) are two separate legal entities, McCree stated. While Tim Herman is both chief executive officer of the FGCC and president of URC, McCree said there are no common board members between the FGCC operating board and the URC board.
The URC has played a key role in many recent downtown projects, including the Flint Farmers’ Market, First Street Lofts, the Rowe Building, the Capital Theater, Blackstone’s and others (see summary at end).
“If all goes well, you will see [the project] sometime in 2018 or early 2019,” McCree told members of Flint’s Central Park Neighborhood Association (CPNA) at its April meeting. “This is not a done deal,” he cautioned. “There are still plenty of pieces to come together, but it’s certainly better than 50-50.”
The YWCA has already moved from the old building to its new location, in the Phoenix Building, 801 Saginaw St., across Fourth Street from the Masonic Temple. “The [old] building had become a financial drain on the organization,” CEO Heidi McAra told M-Live‘s Molly Young last November. “When we moved out, the building was maybe 80 percent vacant, so on a 100,000-square-foot building, you can imagine what our energy bills looked like. I mean, just the cost of the constant maintenance of a building that size and that age.”
According to McCree, the old YWCA building is soon to be razed, to prevent blight from taking over.
“Mixed income housing” the goal
URC’s goal is to provide 92 units of “mixed income housing”, with 51% of the units designated as “affordable” housing, while 49% of the units will be designated as “market” housing. “‘Affordable’ does not mean free,” McCree said. “It’s designed for an individual or family that is roughly at 60% of the area median income.”
He estimated an annual median income for a family of four in Genesee County is approximately $50-$60,000. He projected that a family of four would qualify for the “affordable” housing with an income that is in the low $30,000 range. A single person might qualify with an income in the high $20,000 range.
The Marketplace would include a variety of one-, two-, and three-bedroom units. A one-bedroom unit would price out at approximately $575 a month with utilities. One unit would be designated for an on-site manager, with 46 units intended for “affordable” housing tenants, and 45 units for “market” housing occupants. McCree stressed that there would be no visible differences between the “affordable” and “market” units. “The units are completely indistinguishable,” he said.
McCree contrasted URC’s approach to The Marketplace with projects elsewhere that segregate “affordable” and “market” units even to the extent of requiring separate entrances. The Marketplace project will include a “turnover” feature that might result in new “affordable” tenants moving into a unit that had been occupied by “market” tenants the year before; and vice versa.
The Marketplace also would include 4,600 square feet for small businesses such as a coffee shop or flower shop. McCree noted that the nearby Flint Farmers’ Market demonstrates the demand for smaller spaces for smaller businesses. The Marketplace will also include a community room, a pavilion and barbecue area, and parking inside the rectangular-shaped complex.
Okemos-based PK Housing and Management Company will develop and manage The Marketplace. According to its website, PK’s 65 communities are located throughout Texas and Michigan, including the Upper Peninsula. McCree noted that PK Housing currently manages over 2,000 units.
URC has pioneered several successful downtown Flint initiatives, but sought out PK Housing for The Marketplace project because of its experience in “affordable” housing projects, McCree said, adding, “Affordable’ housing projects are very complicated, very unique. URC has never never done one this large.”
Tax and financing arrangements in place
Tax relief already has been assured by city and state governments to help finance The Marketplace project, McCree said. “We’ve been awarded low income housing tax credits through MSHDA (Michigan State Housing Development Authority),”
MSHDA “provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing,” according to its website. “MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. Proceeds of the bonds and notes are loaned at below-market interest rates to developers of rental housing…”
“Developers of ‘affordable’ housing developments are able to claim tax credits through MSHDA at the State for eligible investments in the project,” McCree explained to East Village Magazine in a followup email. “Those tax credits are then sold to investors, generating capital for the project.”
Tax relief has also been assured by the City of Flint, according to McCree. “‘Affordable Housing’ projects aren’t subject to traditional property taxes under state law. Instead, communities are allowed to charge a Payment in Lieu of Taxes (PILOT) to help pay for city services. The City granted a six percent PILOT for this development in November 2016. The development will pay six percent of the rent, plus full property taxes on the (approximate) 4,600 square feet of commercial (space) in the building.”
How it’s worked elsewhere
PK Housing’s expertise in arranging “affordable” housing developments that utilize complicated tax relief schemes were evidenced in at least two instances in 2016 according to MLive reports:
- Diamond Place, Grand Rapids: This retail-housing “development project was awarded federal Low Income Housing Tax Credits (LIHTC) from the Michigan State Housing Development Authority (MSHDA). The project will receive $1.4 million annually over 10 years to subsidize the rent of 123 of the 168 units. An additional 98 units will be income-restricted….The developers also plan to make use of federal New Market tax credits, PILOT (payment in lieu of taxes) and the state’s Community Revitalization Program (CRP).”
- Leo & Alpine, Grand Rapids: Leo & Alpine is “a 36-unit apartment project on the southeast corner of Leonard Street and Alpine Avenue NW…The project…will use low income housing tax credits worth $562,466 per year for 10 years to help finance the $7.4 million project…The tax credits, on which the project hinged, were approved…by the Michigan State Housing Development Authority. The credits are used by developers as a financing tool for housing projects aimed at low and moderate income residents.”
Citizens voice concerns
No matter the expertise of PK Housing or the success of URC projects in Flint, those gathered at the CPNA meeting expressed concerns about the project.
Abandonment by the developer: “Our experience with River Village was that they (the developers) reinvested throughout the 20-year time frame when the tax credits were running,” observed CPNA vice president Ed Custer. “Then they pulled out at the end of 20 years; then what we saw was declining property up there…”
“PK stays on the project for a long time,” McCree responded. “This is not a company (PK) that comes into town, gets the project going” and then abandons the project to another management company that evolves into an “absentee landlord” scenario.
Developers are lawfully required to maintain the property beyond the 20-year period of tax credits, according to McCree. “The compliance period is more like 40 (years). (Additionally) URC is maintaining, through our partnership, controls where they can’t exit the project without our consent,” he said. “There’s a lot that has been done to make this, not just a good project in this decade it opens, but in the next decade as well.”
Glutted market: Norma Sain, executive director of the Court Street Village Nonprofit Housing Corporation, voiced concern about overbuilding in Flint. She cited other residential projects in Flint that are not at capacity. “We’re setting up competition and failure for somebody…when you overbuild,” she warned.
McCree cited new employment in his response to Sain’s concerns, including Flint’s plans to hire additional firefighters. He estimated the annual income of a new firefighter to be about $28,000 a year. “A one-bedroom unit would be ideal for a person like this,” he reasoned.
McCree also noted the C3Venture Flint LLC investment of $9.68 million to acquire a 17-acre site in the industrial park on James P. Cole Boulevard where it will manufacture plastic parts for Tesla Motors. The business venture is expected to employ nearly 400 persons as operations expand at the site. C3 Venture chose Flint after considering sites in Indiana and California.
“We have to grow, we have to grow as a community,” reasoned McCree. “We have to add the type of housing that people, that families, that young professionals want to get, that they want to have. We know often times those people come into our community and they don’t want to buy, they want to rent a nice place.” McCree claimed that there had not been a substantial housing initiative in Flint since the opening of the Oak Street Senior Apartments in 2014.
Quality Housing: McCree assured the CPNA attendees that The Marketplace project would provide quality housing. He said the project will not provide “transitional housing” for those enrolled in drug and alcohol treatment programs. “There is really, really high quality that we’re seeking to do,” he said. He likened the project to housing developments that you might find along Main Street in Clarkston or midtown Detroit. “We want to see that in Flint as well.”
URC’S accomplishments so far
Uptown Reinvestment Corporation’s track record of successful Flint developments, along with its for-profit partner Uptown 6, an umbrella group of private and public investors, might serve to inspire citizen confidence in The Marketplace project. They include, but are not limited to:
- Flint Farmers’ Market: The market has been owned and operated by URC since 2002 when it saved the market from closing. URC facilitated the market’s successful move to the former Flint Journal Property at 300 East First Street.
- Riverfront Center: The Riverfront Residence Hall opened in 2009 after undergoing a $20 million renovation to transform the former Hyatt Regency Hotel into student housing and classroom space for U of M-Flint, Kettering, Baker, and Mott CC students.
- MSU College of Human Medicine: Michigan State University’s College of Human Medicine occupied the renovated former Flint Journal Building providing 40,000 square feet for 100 third- and fourth-year medical students.
- First Street Lofts Building: A $7million dollar renovation created 16 new residential loft units.
- Rowe Building: An 83,000 square foot construction now houses Rowe Professional Services and MLive/The Flint Journal offices.
- Wade-Trim Building: The 30,000 square foot renovation now provides space for Wade-Trim, a national engineering firm, in addition to loft apartments on the third floor.
- Blackstone’s: Blackstone’s Pub and Grill, a popular 6,000 square foot restaurant, opened in 2008.
EVM staff writer Harold C. Ford can be reached at firstname.lastname@example.org.