City still needs info on Central School plan
IRON MOUNTAIN — Iron Mountain City Council members are concerned they haven’t received an appraisal and other figures from the developer of proposed low-income housing development at the former Central School building.
Commonwealth Development of Fond du Lac, Wis., failed to secure tax credits from the Michigan State Housing Development Authority in the first funding round earlier this year. But the company plans to apply for the second round due April 3.
A important part of that new application is a Payment In Lieu of Taxes, or PILOT, agreement with the city. Commonwealth requested the PILOT in November, but the council wanted more information.
City Manager Jordan Stanchina told the council Monday that Commonwealth still has not provided the requested information.
“Without the appraisal, we don’t know the value of the property. The PILOT can’t exceed the taxable value of the property,” Stanchina said.
He added that the company’s market study showed they could charge higher rents, which would raise the taxable value.
Commonwealth vice president David Ritchay is expected to come back to the council March 20 to request the PILOT, Stanchina said.
Council member Kyle Blomquist said they need some answers from Commonwealth before that meeting.
“It’s not their first rodeo. They know how it will be calculated — it follows the same formula they’ve used on many other projects. It’s disconcerting that they presented us with two options — we don’t give the PILOT or accept the 12 percent PILOT and everything is hunky-dory,” Blomquist said.
Council member Bill Revord asked that Stanchina contact Ritchay today for an update on the information that was promised.
“This is turning into something last-minute again, where we are backed into a corner,” Revord said.
Blomquist said they have to come up with a fall-back position if Commonwealth does not get the information they need. “Terms are on the table — they know the rules.”
Ritchay in February told the council’s infrastructure committee he would get figures to the city to work out a variable PILOT. He stressed at the time the PILOT could not be too tight to its profit margin.
Blomquist had noted the city needed to cover certain costs such as additional infrastructure and possible increases in police and fire protection for the planned 40-units development. He agreed they need to find something that would work both for the city and developer.