By DEBRA HAIGHT
BCR Correspondent
ST. JOSEPH, MI – A recent change in state law continues to reap benefits in Berrien County including over a quarter of a billion dollars of new investments. The most recent example came last week when County Commissioners approved plans for a new brownfield housing redevelopment in the St. Joseph area.
The state’s brownfield redevelopment law has been expanded not only to bring back environmentally contaminated properties but also to promote housing development. The new tool is the result of a 2023 change to the brownfield redevelopment authority law that expands what types of developments can use tax increment financing tools.
Berrien County Community Development Director Dan Fette told commissioners about the latest project at last week’s county board meeting. The project is called Orchard View Lofts and will be located at 3150 Niles Road in St. Joseph Township.
The plans have already been approved by the St. Joseph Township Board and the Berrien County Brownfield Authority, Fette said. The land being used for the new housing development is currently owned by the Blue Roof Church, which is selling that part of its property.
He reported that Dutch Developers out of Ottawa County will undertake the workforce housing development. There will be six buildings with a total of 144 units. Of them, 72 will be one bedroom units and 72 will be two bedroom.
Fette reported that the developer has reserved 14 of the one-bedroom and 15 of the two-bedroom units to be income restricted for people earning 120 percent of the area median income or less.
“It is a total investment of $27.6 million with the build out done between 2027 and 2028,” he said. “The phased buildout will actually be done by the end of 2028.”
He noted that similar previous projects had the income restrictions in place for 10 years but St. Joseph Township wanted a longer period for the income restrictions to be in place. He said the developer has agreed to keep the income restrictions in place for 25 years to provide longer term housing affordability.
Fette noted that the county has identified a specific need for affordable rental housing. He quoted the Berrien County Housing Needs Assessment, which identifies a five-year housing gap of 6,344 rental and for-sale units, including a rental housing gap of 2,208 units. In addition, multi-family housing is operating at a 99.4 occupancy rate, he said.
He told commissioners that the project is eligible for brownfield and tax increment financing funding due to the number of income eligible units that will be created. The tools provide assistance to developers and at the same time increase the tax rolls for the municipalities.
Fette concluded his presentation by giving an overview of the projects the county has approved over the last 14 months. Those projects include other ones in the St. Joseph area as well as ones in Watervliet and Three Oaks.
“When you total up everything approved by this board in the last 14 months, it amounts to over a quarter of a billion dollars of anticipated capital investment, $269 million to be exact,” he said. “There is an anticipated buildout of 703 housing units and a total increase in taxable value of the property of $135.6 million in the county.”
“So, some pretty sizable investments,” he added. “That’s assuming all these projects come to complete fruition. We are also currently working on two additional plans that may come to this board before the end of the year.”
Fette talked about the specifics of the state law changes last year when the county board first began handling these type of projects.
“The 2023 changes to brownfield law include new eligible activities housing projects,” Fette said then. “Before, properties had to be obsolete, blighted, tax reverted or contaminated. Now, we can add housing developments whether it’s new construction or renovating homes. Housing can be part of a brownfield plan regardless of the condition of the land, even if it’s not contaminated.”
What that means for developments is that the tax increment financing revenue captured in a brownfield district can be used for housing related matters. Previously, Fette said that the tax increment financing revenue could only be used to defray certain expenses such as conducting a baseline environmental assessment and removing contaminants.
One of the big expenses that can be reimbursed under the new rules is the loss developers have from renting or selling homes at below market rates to get income qualified families. Developers have to demonstrate a housing need to qualify for the reimbursement.
The new brownfield rules related to housing developments has also gotten a closer look in the city of Buchanan. City officials have taken a number of actions to make the city more attractive to such developments.
Buchanan City Manager Tony McGhee noted last year that the new brownfield redevelopment tools help close funding gaps that otherwise would make new housing developments not financially viable.
“TIF allows future property tax revenue generated by an improved site to reimburse eligible costs such as demolition, site preparation, and infrastructure improvements,” he said last year. “This makes projects feasible that might otherwise be cost-prohibitive.”
“This evolution has allowed communities not only to remediate environmental hazards but also to attract new businesses, create jobs, expand housing options, and grow the tax base without increasing the financial burden on residents.”