Comments (3) 4:00 PM posted by admin |
Being on City Council is a learning experience. I’m learning when to speak up and when to keep quiet. I’m learning how much the boat will rock. And most importantly, I’m learning when and with whom to pick my battles.
Recall if you will March of 2006 when Mr. Kirk of Edwards Communities came a calling asking that the City of Ypsilanti reimburse him an additional $1M for devloping the nation’s oldest paper mill into the Penn Place apartment complex across from EMU on Huron River Drive. The locals never picked up on this one and there wasn’t the outrage that you’d expect over Mr. Kirk’s demand.
Regardless, the City Council at the time refused to cave in to Mr. Kirk’s demands even though there appeared to be some sympathy for the request.
Score one for the good guys.
Now harken back to last Tuesday’s City Council meeting in which Mr. Kirk was back with a “presentation” requesting an additional $490K in tax breaks he felt the City owed him. He claimed that former Director of Planning & Development Megan Gibb promised him the extra $490K. The problem with this claim, however, is that it’s a moot point.
Recall if you will once more time back to April 6, 2004 when that City Council passed a resolution to cap the Brownfield TIF at $1.5M and not the $1.99M Mr. Kirk was hoping to get. Said another way, Council made a policy decision that day.
The MEDC recommendation was for $1.5M in TIF capture with the expectation that Edwards Communities would apply for $500K worth of Single Business Tax credits. Edwards Communities never applied for those SBT credits stating that the credits did not pay for demolition and clean up. That’s a true statement, but SBT credits can be sold. If Edwards Communities didn’t realize this, then they did not do the due diligence required of such a massive development.
Some on Council seemed sympathetic to his request. Others did not. Count me as one of those who believe Council set policy and is living up to the policy. We are a City of our word.
I realize I’m jumping back in forth through time like a Quentin Tarantino script, but allow me to go back one last time. During the primary election here in Ypsilanti it was no secret that Edwards Communities were trying to unload Penn Place. Some reports said it had been advertised in the Michigan Business Review as early as February of 2006. This was a topic of concern because there was the fear (albeit slim) that EMU would find a loop-hole to exploit and purchase the property themselves and take it off the tax rolls. Conspiracy theorists were in over-drive when you consider the new EMU student Center is almost right across the street. Could there have been some nefarious plan hatched by EMU to further isolate itself from Ypsilanti? Probably not, but it’s fun to talk about.
Again, because there was not much about this in the locals, no one really ever considered whether or not the property really is for sale. Well, is it?
After making a couple calls to people who made a couple of calls themselves, I was able to turn up a few leads. First it was rumored that the property was being packaged with a couple of other properties and being listed by Marcus & Millichap, but a quick review of their listings did not reveal Penn Place.
After cozying up with the kids at the Ypsilanti Courier (located in Belleville for your convenience), a new company soon bubbled to the surface. Hendricks & Partners of Phoenix, Arizona (with an office located in Birmingham, MI for your convenience) did indeed have a listing for Penninsular Place.
For a mere $112,340,000, you too could own three apartment complexes in college towns such as Lexington, KY, Toledo, OH, and, of course, Ypsilanti, MI. Here’s the listing for your review. Pay close attention to the financials.
The Penninsular Place apartments take in $244,900 in rent each month for a total of $2,938,795 per year. With expenses of $1,292,451 and a debt service of $1,212,195 annually, that’s a total yearly profit of $483,653.
If that isn’t enough to drive you nuts, there’s an internet story from our close friends at Ypsi News confirming there is a contract in place to sell the property individually and not part of the package for $24.7M. Wow! Makes you wonder who the buyer might be. EMU?!?!? Let’s hope not.
To be fair in all of this, we must consider what stipulations are attached to the deal and how long it will take to be worked out. The $24.7M is a very large number, but that may not be the agreed upon sales price assuming the deal is ever consumated.
Now before you get all caught up in the numbers, forget about them. It doesn’t matter if Penn Place is making a fortune or it’s hemorrhaging cash. A deal was struck. Policy was written. The City of Ypsilanti is living up to its word. I do promise, however, to find the resolution from April 6, 2004 as well as find the audio tapes from that meeting and listen to them so I can better understand just what the deal was. Mr. Kirk swears up and down that Ms. Gibb said everything would be taken care of for him. The resolution will make or break this for him and the City.
The outcome at January 16th’s Council Meeting was up in the air. Mr. Kirk was directed to work with the City Manager on this. What was to happen is unknown. Word on the street is a resolution increasing the Brownfield TIF capture from $1.5M to $1.99M will come back before Council on February 6th, but maybe it shouldn’t.
If we were to give a developer from Ohio who has a contract to sell his property another tax credit and then ask the residents of Ypsilanti to weigh in on an income tax, can you imagine the outrage?
I’m going to start boarding up my windows right now.