Galesburg, Michigan: County Approves Brownfield Plan for 52-Unit Housing Development Near Blake Boulevard

County Board Votes 7-0-1 to Approve Housing Incentive

The Kalamazoo County Board of Commissioners approved a brownfield redevelopment plan Monday for a 52-unit housing project in Galesburg, clearing the way for construction on a vacant parcel near Blake Boulevard and Battle Creek Street.

The board voted 7-0-1 to adopt the Michigan Housing Partnership LLC Brownfield Plan, with Commissioner Morales abstaining, according to Public Media Network. The motion was made by Commissioner Wheeler and supported by Vice Chair Taylor.

What the Brownfield Plan Does

The brownfield plan is a financing tool that captures future property tax revenue generated by the development to pay for infrastructure improvements. The developer is responsible for approximately $1.8 million in new roads, sewer, and water connections, plus about $1 million in site preparation costs, according to the county.

The plan runs for up to 30 years. The first 25 years provide reimbursement to the developer. The final five years split captured revenue between the county Brownfield revolving fund and reimbursement to the City of Galesburg for adjacent street improvements.

Joe Agostinelli of Miller Johnson Growth Advisors, the project consultant, told the public hearing that the plan captures only new tax increment revenue from the development. It does not reduce the tax revenue taxing jurisdictions currently receive.

Unit Mix and Rents

The development will include 46 single-family homes and six duplexes. Twenty-two units will be restricted to renters earning up to 100% of the Area Median Income, according to NowKalamazoo.

Macy Walters, the Kalamazoo County Brownfield Redevelopment Coordinator, said rents for the income-restricted units are set using the Michigan State Housing Development Authority formula. A single person at 100% AMI earns about $73,800 a year.

The brownfield plan estimates rents of $2,307 per month for a four-bedroom duplex and $2,287 per month for a four-bedroom single-family home. Those rent limits apply for 10 years, after which the units convert to market rate.

"The developer indicated openness to learning more about the option and was not inherently opposed to entertaining vouchers on the project, but had no experience with them," the project consultant said at the meeting, according to Public Media Network.

Commissioner Concerns About Vouchers

Commissioner Morales abstained from the vote, citing the need to see a firmer commitment to housing vouchers from the developer.

The project originally depended on low-income housing tax credits but has since shifted to a workforce housing financing structure. Morales said she needed an actual commitment to vouchers before voting in support.

Library Director Raises Revenue Concerns

Helena Hayes, director of the Galesburg Charleston Memorial District Library, testified at the public hearing that she supported development on the property but worried the brownfield plan would delay millage revenue the library would otherwise receive from the increased taxable value.

Agostinelli responded that the library is not currently receiving revenue from a project that does not exist and that the brownfield plan only captures incremental new value.

Construction Timeline

Construction on the $17 million project is expected to begin this summer, according to NowKalamazoo. Allen Edwin Homes will oversee the rental units.

Walters said the project is not being funded by the countywide Housing for All millage. Millage applications for the current round did not include single-family homes, so the development was not eligible.

The brownfield plan may end early if project costs come in lower than projected or if taxable values come in higher than expected, according to NowKalamazoo.