City considers tax abatement for Hospitality House site development
Tue, 11/08/2022 - 1:02pm caleb
Council to conduct public hearing on application from Grayling Place Apartments, LLC for tax exemption
Caleb Casey | Managing Editor
The Grayling City Council, in October, approved a Commercial Rehabilitation District for the land that contains the Grayling Place Apartments project (former Hospitality House site), and – according to city officials – the council will conduct a public hearing next week regarding a possible tax abatement for the zone.
During a regular meeting of the council on Monday, October 10, the city hosted a public hearing on the Commercial Rehabilitation District.
City Manager Erich Podjaske said Grayling Place Apartments was seeking a 10-year tax abatement. The exemption would be on the new structures at the site, not on the land, Podjaske said. Podjaske said the city needed to create a zone for the tax abatement first and then consider the developers’ application for the exemption.
During previous meetings of the city council, members said the tax abatement request was expected.
During the October 10 public hearing, one council member said the process is a way for “blighted property to get back on the tax roll.”
After closing the public hearing, council members asked about the “pros and cons” of the potential tax abatement. One council member said tax exemptions can be a good way to “entice new business” to the area, but council members also agreed that they want to handle such requests on a “case by case basis.”
The Grayling City Council approved the Commercial Rehabilitation District for the former Hospitality House site with a 5-0 vote on October 10.
“I think it’s a good idea,” Councilman Dennis Sloan said.
Later in the October 10 meeting, City Manager Podjaske said the council would need to conduct another public hearing, this one regarding the Grayling Place Apartments, LLC application for the tax abatement. By consensus, the council opted to schedule the hearing during its November meeting.
“The Grayling City Council has set a public hearing for comment regarding Grayling Place Apartments, LLC, Commercial Rehabilitation Exemption Certificate Application. This will be held at Grayling City Hall, 6:30 p.m. on November 14, 2022. The tax exemption requested would be for the parcel located at 1232 S. I-75 Business Loop, formerly known as The Hospitality House,” according to the City of Grayling. “Comments may be sent to Erich Podjaske at 1020 City Boulevard, Grayling, MI 49738, or by email, email@example.com, prior to the public hearing.”
Podjaske – during the October 10 meeting – said the city would also have to send letters to “taxing jurisdictions that would be affected.”
The Crawford County Board of Commissioners – during its regular meeting on Thursday, October 27 – discussed the Commercial Rehabilitation District. Paul Compo, Crawford County Administrator, told the board that it could “reject” the zone.
The commissioners discussed some of the numbers and the pros and cons of the proposal.
District #1 Commissioner Laurie Jamison – absent in person during the meeting but present via telephone speaker – called it a “double-edged sword.” Commissioner Jamison said she does not want the county to “give up tax dollars” but also does not want to endanger the development.
“Very concerned if it doesn’t go through the project could fail,” Commissioner Jamison said. “Housing, we all know is extremely short. We’ve got to look at the entire picture.”
“It’s not that we lose. It’s that we do not gain. We’re just not gaining the additional revenue,” said District #2 Commissioner Duncan Gray.
Compo told the commissioners that if they were “okay” with the commercial rehabilitation district, no action was required, but if they wanted to reject it, they would have to vote no on it by November 9. The board of commissioners opted not to take action on the matter during the October 27 meeting; the board’s next meeting is slated for November 17.
According to City of Grayling officials, Grayling Place Apartments, LLC is constructing three three-story buildings (108 housing units) and parking areas at the Hospitality House site – located on M-93 northwest of downtown Grayling – to offer “market rate apartments” for rent. Demolition of the long-vacant Hospitality House motel structures began in late May of 2022.