Craig Cugini, city manager, city of Ishpeming

ISHPEMING — New workforce housing could be coming to downtown Ishpeming.

Councilors heard the first reading for a proposed housing development in the Anderson and Nicolet Bank buildings on Main Street during Wednesday’s regular Ishpeming City Council meeting.

City Manager Craig Cugini said the owner of the Anderson building has been trying to find someone to purchase or develop the property. Cugini said the owner of Nicolet Bank building was looking to find a partner to take ownership of the building and lease the bank’s space back to them.

This could result in 24 one- and two-bedroom apartments between the two buildings. If approved, the developer would need to submit an application to the MI State Housing Development Authority and file for a low-income housing credit. In order for that to happen, the city would have to approve a payment in lieu of taxes, or PILOT ordinance, which allows the developer to pay a percentage of residential rents collected instead of city property tax.

Cugini said he spoke with the director of the MSHDA who is “very excited” about the proposed project.

“They’re trying to do everything in the state of Michigan to improve housing,” Cugini said. “They’re excited to see an application from the city of Ishpeming.”

C.J. Felton, director of resource development and communications at Community Housing Network, a nonprofit based in Troy, was in attendance to answer questions about the project.

He said in order to be approved to live in the proposed apartments, a single person’s annual income would be capped at $34,000 and a couple with a child could make up to $51,000 per year. The one-bedroom apartments would be $750 per month and the two-bedrooms would be $950 to $1,000, based on the market rate.

The proposed percentage of the PILOT was also discussed.

“We are potentially negotiating with the city to take 4% of our net rents,” Felton said. “What that means is in year one about $7,100 in taxes total from the two buildings. The commercial spaces will pay ad valorem taxes.”

One community leader spoke in support of the possible housing plan for the Anderson building.

“I want to strongly encourage all of you to support that process,” Ishpeming Area Historical Society President and DDA Chairman David Aeh said. “The more people that live downtown, the better. The more people that are around, it increases safety (and) vibrancy. People are shopping at the various businesses and using the services we enjoy downtown.”

Councilor Renelle Halverson expressed concerns about a possible reduction in city property tax revenue.

“I would love to move in if I owned a business to a tax-free business and not have to pay any tax revenue. That’s a big chunk of, me being a resident, of what I pay, and I’m not really sure I’m comfortable with losing that tax base revenue and I’m not understanding how we’re going to see that tax money up front,” Halverson said. “I understand it’s development, it’s going to bring people in, but businesses are supposed to move into our downtown development to add to our tax base, to improve the entire city around them. That’s my concern with this is how many years down the road are we giving away our tax revenue.”

Felton noted in his presentation that commercial spaces would be charged under the city’s current property tax rates.

Councilor Lindsay Bean acknowledged there could be a financial loss to the city by not collecting full tax revenue on the properties, but noted that the loss would be made up in part by the residents of the apartments, who would support downtown businesses.

“They’re going to support, no matter what their income is, the pharmacy that’s next door, Buck’s Restaurant, because they’re going to go there and get breakfast and coffee, they’re going to go to the hardware store because it’s across the street, they’re going to go to the library because they can walk there, they’re going to walk to a grocery store and any children that live in any of those buildings are going to walk to school, and they’re a block and a half away from the police department,” Bean said. “I’ve heard some concern about putting residential units in a downtown area and I just think that in particular those two buildings with the plan you’ve given us, seems like a good proposition for the city of Ishpeming and it’s a really good place for those people to live.”

The council voted unanimously to move the ordinance to a second reading which will be on Wednesday, Nov. 8.

Ishpeming resident Claudia Demarest spoke in support of the proposal. She said she thinks it’s a “good deal.”

The entire meeting can be viewed on YouTube at cityofishpemingmi987.

Dreyma Beronja can be reached at 906-228-2500 ext. 548. Their email address is dberonj@miningjournal.net.