MANISTEE – The renovation of the Rietz Park Village Apartments will be completed by spring.
However, Joe Hollander, vice president and chairman of Hollander Development, said in an interview with the News Advocate that this could mean unanimously approved by the council between March and June 2022.
The first item was a reduction in the current PILOT program (payment instead of taxes) from 10% to 2%. The second point was a municipal service contract with the city. However, those two points combined were what the city wanted as this will generate 10% more revenue for the city compared to the current PILOT, according to Hollander and a memo for the council meeting on August 4th.
According to the memo, the current 10% PILOT generates around $ 30,000, for which the city receives around $ 8,500. The service contract provides for a fee of $ 200 per apartment unit and a “3% annual escalator”. The two together would gross the city about $ 9,600.
“The support of the city and the community is crucial to get (the developments) going,” said Hollander.
The third item on the agenda was a road renewal agreement. Under the agreement, Hollander Development is paying US $ 200,000 to redevelop 14th Street from 12th Street to Maywood Street and Maywood Street from 14th Street to 15th Street and parts of Care Center Drive.
Hollander noted that these things were more beneficial for the city than for Hollander Development, but “we understand our responsibility to the city and we agreed to it. (Manistee) is a difficult area and we are doing our best to create affordable housing for the city. ”
The road renewal agreement will also make renovating Horizon Pointe, another property owned by Hollander Development, easier, Hollander said.
The renovation work in the Rietz Park apartments includes the energy efficiency of the 48 apartments, some new appliances, the conversion of an office into a common room and the installation of an emergency generator for the complex in the event that the power fails, Hollander said.
The council memo stated that Hollander Development is spending $ 2,000,000 to renovate the 48 apartments.
Hollander said the reason they are going through the process with the city is because the renovation work has reached the standard the city wanted, and also because of a tax law change that allows Rietz Park apartments to raise the income cap to 80. to increase% of the current area income compared to the current 60%.
Hollander found that in addition to units with an upper income limit of 60%, others in Rietz Park are also limited to 30% of the area income. Currently, the median household income in Manistee is around $ 35,000 and the median family income is $ 47,000.
With the 60% cap, Rietz Park can (mostly) rent to individuals and families making between $ 21,000 and $ 28,000 per year. With the 30% limited housing, individuals and families earning between $ 11,000 and $ 14,000 per year would qualify.
By raising the cap to 80%, individuals and families making between $ 28,000 and $ 38,000 a year would qualify, which Hollander said would open the apartments to a lot more people, and it would also help pay for the apartments, which are limited to 30%. the median income per area.
Most of the homes in Rietz Park fall within the scope to qualify for the low-income tax credits that Hollander Developments has received approval from the Michigan State Housing Development Authority (MSHDA) for. The plan proposed to the council will allow them to apply for the tax credits.