2017-02-02 / Front Page

Northport affordable housing project on hold

Sewer costs one problem
By Patti Brandt Burgess
Of The Enterprise staff

Expensive sewer hook-up fees needed for a 36-unit affordable housing development proposed for a former hospital in Northport may have flushed the project down the drain.

Craig Patterson, senior vice president of Woda, the company that proposed the development, said the project was complicated by high construction costs and its location.

Fees to hook-up to the municipal sewer in Northport would have added another $612,000 to the project, something Patterson was unaware of when he pitched the idea.

There would also have been usage costs of $732 per year for each apartment.

“The sewer is a huge part of it,” Patterson said. “The sewer is a big deal.”

Patterson said his company is open for future development in Northport if circumstances change, though he said he hasn’t talked with anyone there in about three months.

Several area business owners, Northport School and the Northport Omena Chamber of Commerce supported the project.

But other people in Northport opposed it, saying it would not attract younger families. It would also attract low income people and their problems, some said.

“We got an incredible amount of pushback from the neighborhood, which is understandable, but unfounded,” said Patterson. “We were trying to make it work for families who want to work in the area.”

Patterson was also surprised when he heard that the Leelanau Township Board had repealed a Payment in Lieu of Taxes (PILOT) ordinance it had adopted last February to pave the way for the project.

That repeal was approved by the board at its monthly meeting held last Wednesday, Jan. 25. The meeting had been rescheduled from its regular Tuesday due to weather.

The Northport Highlands apartment complex was to offer one-, two- and three bedroom apartments that would have been targeted to renters with household incomes of $29,000 to $41,400 per year.

Woda would have managed the complex, with the PILOT allowing the company to make an annual payment based on 6 percent of rental income in lieu of property taxes.

Having the tax break in place would have made the project more enticing to investors, Patterson had said.

It also scores the project a little higher in its pitch for federal tax credits that are funneled through the Michigan State Housing Development Authority (MSHDA).

Competition is stiff as developers vie for those tax credits, which reduce the amount of federal taxes they must pay. Woda had requested $985,000 in credits for the project.

Projects are scored on things like construction costs, walkability and nearby amenities.

As it was, the project scored only 82 points out of a possible 221 in the April round of grants, putting it fourth from the bottom in a field of 57 applicants.

Companies can apply for the grant twice a year; the Northport Highlands project has not been resubmitted.

Leelanau Township still has a Municipal Services Agreement in place that would have had the company reimbursing the township and village for municipal services for those who would live in housing project. Northport Village also approved a PILOT and MSA for the project.

Both township measures had been approved on votes of 3-2, with Treasurer Denise Dunn and Clerk Deb Van Pelt voting “no.”

“I was opposed to (the PILOT) to begin with, so I’m glad we repealed it,” Dunn said this week.

Now the Woda Group, or any other group that wants to develop the hospital property, will have to come back to the council with another request, Dunn said.

Dunn is not against affordable housing. She just thinks that Northport is not the place for it as it’s too far away from job opportunities.

“It’s definitely needed in the whole county, but it should be somewhere that is more centrally located, like Suttons Bay or Leland or somewhere closer to Traverse City, where the jobs are,” she said.

Dunn has said the people who need housing — medical technicians, teachers aids and other professionals — would make too much money to live in the “affordable” apartments proposed in Northport.

The Northport Village Council has no plans to repeal its PILOT, said Barb Von Voigtlander, administrative coordinator for the village.

“We don’t know what might happen in the future and it’s good to keep it in place,” Von Voigtlander said.

The council had also made zoning changes that would allow multi-family dwellings at the proposed site.

Von Voigtlander said she knew the sewer fees were high, but said people in the village had to pay them and the village couldn’t make a deal with Woda. Patterson said he would not have felt comfortable asking for a break as that would not have been fair to residents.

Von Voigtlander said that in 10 years when sewer bonds are paid off things might be different. She also said going through the process was a good learning experience that may come in handy if another developer comes forward.

Still, Von Voigtlander is disappointed.

“A lot of us worked very hard to make that project happen,” she said. “It’s always disappointing when a project doesn’t come to fruition.”

About half of the former Leelanau Memorial Hospital holds the Northport Highlands assisted living facility, which opened in 2009. The rest of the building has been empty since 2004, when the hospital closed.

The township and village together now collect about $10,500 in taxes on the unused portion of the building.

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The statement, "other people

The statement, "other people in Northport opposed it, saying it would not attract younger families. It would also attract low income people and their problems" says more about the character and values of Northport than anyone knows.