County Board approves an amended Brownfield plan for Sawmill Lofts project
Tue, 09/01/2020 - 11:08am caleb
Dan Sanderson | Staff Writer
The future of a $10.6 million project aimed at redeveloping blighted and contaminated property in downtown Grayling hinges on obtaining funding assistance from the state.
The Crawford County Board of Commissioners, during a virtual meeting held on Thursday, August 27, approved an amended Brownfield plan for Sawmill Lofts, LLC.
The five-story mixed use commercial and residential project will include retail and commercial space on the ground floor and 42 residential spaces on the upper floors.
The sites to be redeveloped include the Sawmill Billiards property, the building where the Crawford County Avalanche was located, and where Heirloom Antiques operated. Two additional lots have been added to the project, which will provide 53 parking spaces on property located between Burton Court and the AuSable River.
The Crawford County Board of Commissioners approved the initial Brownfield plan in 2017.
All property is now solely owned by Michigan Community Capital, a non-profit community development finance institution.
Marilyn Crowley, the investment director for Michigan Community Capital, said a lot of behind the scenes work has been done over the past two years.
“We’ve been overcoming some hurdles,” Crowley said.
In particular, the project will cost substantially more than what it will be worth at the end of the 30-year Brownfield plan to demolish the existing buildings, clean up contamination, and prepare the site for new construction.
The Grayling City Council approved a Neighborhood Enterprise Zone abatement for the project, which cuts taxes in half for 15 years.
Developers have also obtained grants from the Michigan Department of Environment, Great Lakes and Energy for the clean-up and remediation of chemicals in the soil.
“The support from the community has been vital,” Crowley said.
The initial project planned for a concrete foundation and steel framing for the super structures. Now, developers are preparing to have a solid foundation due to the soil conditions and wood framing for the building.
The overall estimate for the project is $10.6 million with a planned reimbursement of over $1.6 million.
The reimbursement would be funded over 25 years of the Brownfield plan. A total of $745,410 would be paid over five years to revolving Brownfield state and county funds as well as for administrative costs for officials to oversee the project.
County Commissioner Laurie Jamison questioned if the apartments would be at fair market rent or subsidized or a combination of the two options.
Crowley said the development is aimed at providing workforce housing, which equates to 80 percent of the area’s median income. She added that rents would range from $700 for a studio apartment up to $1,100 for the biggest two-bedroom units that will be included in the project.
Crowley said it is difficult to get appraisals for the overall project and rental figures due to a lack of similar size developments and projects of the same nature in the community.
She said there will be no profit made from the development.
“There is essentially no return on this project, so a private person wouldn’t want to put their money into it,” Crowley said.
County Commissioner Carey Jansen questioned the probability of the project coming to fruition, citing citizens’ complaints regarding the lack of progress with other redevelopment projects in downtown Grayling.
Crowley said the entire scope, design, ownership, and environmental due diligence for the project has changed over the last two years.
“This plan has got a lot of heft behind it,” Crowley said.
Developers are seeking $3.2 million in funding from the Michigan Economic Development Corporation’s (MEDC) Community Revitalization Program. She said that is down from an initial $4.5 million request.
Crowley said the MEDC has had to tighten its budget now that the state run economic development agency is trying to support small businesses because of the COVID-19 pandemic.
Crowley said the developers are considering the elimination of one story from the building to decrease project costs.
“We’re looking to scale the project to what the MEDC can provide us,” she said.
Crowley said a similar project in Cadillac will soon be open for tenants to rent. She said the Grayling project in contingent on the response developers get from the state.
“As long as we’re able to secure that support, we are all in to do this project,” Crowley said.
Dave Van Haaren, director of operations for Triterra, an environmental consulting firm, said there are chemicals associated with a dry cleaning business that was previously operated on the property.
Crawford County Commissioner Sharon Priebe inquired on when the dry cleaning business was in business.
Van Haaren said the building was built in 1950s and was used as a dry cleaning operation until the 1970s.