2006-06-22 / Front Page

Mackinaw City Planners Debate Restructuring of Village Economy, Housing Project Concerns

By Paul Gingras

The Mackinaw City village board is continuing its research into a 30-unit affordable housing project proposed by developer Gerald Haan of the Harbor Springs-based Phoenix Holding Group. The affordable housing plan is intended to provide residential space for people who would otherwise be unable to afford to live in the area.

The issue is part of a larger economic restructuring plan being designed for the village and, once again, sparked debate between the council and some residents at a Village Council meeting Thursday, June 1.

The project involves a piece of tax-reverted land taken over by the village in the 1930s. If approved by the village and the state, an area the size of 20 residential lots would be used to create five, two-story structures with six apartments each. The rent would be based on a resident's income and subsidized by the State of Michigan. Under a tax abatement program, the project would pay about $8,000 to the village in lieu of property taxes.

At a council work session Saturday, May 27, to discuss how this land would be transferred to Mr. Haan, it was decided that proceeds from the annual payment will be distributed in the same way that tax revenue is distributed. A percentage of the sale will go to the local school district and percentages will be given to county, township, and the village governments.

Beyond the payment in lieu of taxes, other revenue produced by the project can't be predicted, said Community Development Director Steve Schnell.

At Council's June 1 meeting, the board reviewed a sample state ordinance that the village would have to adopt to provide the tax abatement necessary for the project to go forth. The village is not yet agreeing to sell the land, Mr. Schnell stressed to The St. Ignace News.

Mr. Haan needs the village to grant him an official "land sale option" before he can apply to the Michigan State Housing Development Authority (MSHDA) for "land control" status. In essence, he must prove that he can buy the property under the village's conditions.

"MSHDA, Mr. Haan, and the village will end up putting a lot of effort into this," Mr. Schnell said. "MSHDA wants to make sure that everything is secure and no one wastes their time."

If Mr. Haan receives the land sale option and subsequently gets land control status from the state, no one else will be able to buy the parcels.

Much work needs to be done, Mr. Schnell said, and, even if Council approves the project, the paperwork would not be completed until mid-winter.

"We are nowhere near a land sale yet," Village President Robert Heilman reminded the public, which may come as a relief to some area residents who say they are alarmed by the project.

"I'm not sure the local society is ready for this," said R. J. Planisek. "We have a nice community here, and you could make a big change in it." He encouraged the board to study the history of projects built after World War II for similar purposes.

By providing residential space for people who cannot currently afford to live in the area, Mr. Schnell said, more kids would take seats in schools and more potential employees would be available to area businesses. It could also bring in new businesses, which is an integral part of economic development, he added.

"Employers won't locate here if their employees have nowhere to live," Mr. Schnell said. "The schools have been asking us to do this for years. This project could fill a major gap in our affordable housing needs."

The plan drafted by Mr. Schnell declares that the project would remain an "affordable housing" project for the next 30 years.

"Hopefully," he said, "it would be renewed for the same purpose after that."

If in 30 years there is still a need for affordable housing, he added, the project will likely stay in the program. If not, the apartments would be rented in the traditional manner, based on market demand, which would also provide for a need in the village, he said. Further, if in 30 years the project is taken out of affordable housing project status, the tax abatement would vanish and the land would be added to the tax roll.

The village economic restructuring plan has been studied for several years.

Maryland-based Chesapeake Group conducted market studies, face-to-face interviews, a public forum, and surveys of residents and visitors to gather data concerning how the city could develop.

A public meeting was held Tuesday, May 23, in which Howard Kohn, president of the Chesapeake Group, gave his final report to the community concerning the studies done by his organization that led to the Economic Restructuring Program for Mackinaw City.

The plan was adopted at the meeting and should lead to more year-around jobs and businesses, Mr. Schnell said.

The plan looks at the city's assets.

People in the village enjoy a high quality of life, Mr. Schnell said.

"There are good recreational opportunities here and a healthy economy, albeit mostly in the summer." There is also good Internet service in the area, although the village may choose to augment that, he added.

The main goal now is to get the word out that Mackinaw City is a good place to live year-around, he said, so the first step in the restructuring plan is to develop marketing materials and send them to businesses.

The businesses the village has in mind are confidential, at this point, Mr. Schnell added.

The nine-member Economic Development Corporation (EDC) is excited, he said. The sheer volume of possibilities turned up through these studies has made people understand that attracting new businesses to the area is a real possibility.

"The program is exceptionally progressive," said Karen Petrimoulx, a new member of the EDC who sells real estate in the Mackinaw City office of Coldwell Banker Northern Lakes. "It provides a great deal of thoughts and ideas to bring more residents to the area, and more businesses also."

One part of the plan calls to extend the tourism season. Another focuses on the needs and desires of 50-year-old potential residents with incomes of about $50,000 or higher. This is called the 50/50 plan, she said. "We're focusing on active seniors" she added, "people who would make use of the area's natural resources."

To implement the restructuring program, the EDC has created four committees. The first is the Business Incubator Committee, which will focus on constructing a building with leaseable space for multiple businesses. Ideally, Mr. Schnell said, these businesses would be complementary and noncompetitive, such as a computer manufacturer, a software developer, and an Internet service provider working out of the same building.

The second is the Land Use Committee. This organization will work with the planning commission as it revises its master plan, helping determine where in Mackinaw City to encourage business development and where to discourage it. It will ensure that needed businesses don't destroy the area's natural resource assets.

The third is the Alternative Energy Committee. This group will seek out ways to promote the village as a place for year-around business by promoting the area as a progressive community. The village's windmill investment was a good start, Mr. Schnell said, and this committee would encourage other alternative energy businesses to come to the area also.

The fourth is the Tourism Committee, which would be closely aligned with the Mackinaw Area Visitors Bureau. The EDC will focus on creating year-around employment and uses village resources, so it differs from the Tourism Bureau. This committee will focus on extending the tourism season, perhaps by encouraging arts and crafts businesses that provide high quality local products like custom furniture, Mr. Schnell said. Year-around businesses of this sort would provide more draw to the area during the off season, he added.

One of the best aspects of this plan is that the various entities involved, such as the EDC and the Tourism Bureau, are communicating more than ever before, Mr. Schnell said, and that is critical for economic development.

To control housing use in residential districts, particularly those along the lakefront, the Mackinaw City Village Council has adopted an ordinance stating that no one in the village may rent a home for less than 30 days.

"Some lakefront property owners have suggested renting their property by the weekend," said Mr. Schnell, "but what we want is long term usage. Short term usage changes the nature of a residential district. You don't know your neighbors."

The decision was made, in part, after the board reviewed information based on court cases concerning Torch Lake property, an area which, like Mackinaw City, had not defined what was considered a "transient dwelling unit" and what was not.

In Torch Lake, the courts decided that renting for fewer than 30 days defined a residence as a "transient dwelling unit," Mr. Schnell said. The Mackinaw City Village Council has adopted the same definition.

Both building codes and zoning regulations are affected by the definition. For a building to be designated a "non-transient" dwelling unit, for example, it must meet more stringent fire codes than transient dwelling units, Mr. Schnell said.

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