Antonio Adan, housing specialist for the Marquette County Land Bank, talks during a presentation on brownfield redevelopment Wednesday. (Houghton Daily Mining Gazette photo)

HOUGHTON — Houghton officials and other county figures heard a presentation Wednesday on economic tools to help aid in brownfield redevelopment.

The talk took place at a joint meeting of Houghton’s City Council, Planning Commission, Downtown Development Authority and Local Development Financing Authority.

“The communities that get on board with this and to understand it and to start doing these plans are going to be the ones that are more appealing for developers to spend their money to try to build new attainable housing, which is so urgently needed,” said Ray Govus, community development manager for the Michigan Economic Development Corp.

Govus presented along with Keweenaw Economic Development Alliance Executive Director Jeff Ratcliffe and Antonio Adan, housing specialist for the Marquette County Land Bank.

Ratcliffe said there is a pressing need for new real estate development. It helps provide space for new entrepreneurs and businesses. It also creates more housing — identified in the recent Keweenaw Economic Development Strategic Plan as the area’s “No. 1 weakness.”

Without public financing, it’s tough to develop an existing structure and still generate a reasonable return on investment, Ratcliffe said. Higher interest rates and construction costs make new construction even more daunting.

Properties known or suspected to be contaminated are eligible for brownfield funding in Michigan. So are buildings that are vacant, blighted, obsolete or owned by a land bank. Recently, the funding also opened up to affordable housing units in a standalone or mixed-project.

Local governments can use Brownfield Tax Increment Financing to help with qualifying costs. The tax capture program can last up to 30 years. Communities continue to collect the base taxable value for the property. However, additional taxable value created by the development over that span is returned to the developer as reimbursement.

That can apply to a range of activities, including environmental assessments, site demolition and lead abatement.

Several examples of the projects already exist in the Upper Peninsula. Locally, a half-acre blighted property formerly used by a building supply business is now being used for housing.

A State Land Bank grant helped demolish buildings and clean up the site. Houghton County’s brownfield authority then approved a TIF for more than $40,000 of eligible costs, which was approved in April 2022.

The first house on the property was built last year, and a second is underway.

Another tool is the Public Act 210 exemption. That tax abatement caps the taxable value of real property for 10 years at the level it was before rehabilitation started.

Through that, it became financially feasible to renovate the former Chassell Community Center. In 2021, the long-vacant 4,400-foot structure was converted into five middle-market rentals.

Owners seeking brownfield funding must also complete extensive plans, establishing the property and explaining why it’s eligible. They must also demonstrate community support.

While the state has received pushback on the detail required in the plans and the approval process, “free money isn’t easy,” Govus said.

“That complexity is baked in for compliance purposes,” he said. “We don’t want to be in a position approving a plan that doesn’t have that public benefit, and also doesn’t have all of the numbers check out.”