Downs Development Agreement approved
Posted on 09/21/2023
City Hall City Council update of Sept. 18 meeting

Agenda Change –
At the request of City Attorney Tony Chubb, a new item (9D) was added to the agenda: public hearing for the Brownfield plan, moving the original 9D item (consideration of Public Act 210) to 9E.

Fats, Grease and Oil (FOG) ordinance –
This was the second reading of the proposed amendment to Chapter 86 Utilities, adding Article VI: The installation and maintenance of grease interceptors; discharge prohibitions ordinance. Council approved the amendment, which regulates the management of fats, oils and grease (FOG) in restaurants and bars. The intent is to prevent FOG products from being improperly disposed and causing harm to wastewater treatment plants and/or clogging sanitary sewer systems.

Presentation by Hunter Pasteur Northville –
Company representative Seth Herkowitz said the company (now operating as Perennial Northville LLC) is seeking approval from City Council to approve the Downs Development Agreement. The document was negotiated by the developer and the city’s administrative team, with extensive legal advice and review. The estimated $250,000 million mixed-use development will not only bring new homes and commercial space to the city but will also generate new tax revenue while providing the public benefits of new public parks, a daylighted river, and infrastructure improvements, Herkowitz said. He outlined the construction schedule that begins with a demolition phase in 2024 and extends to 2027 with project completion.

Downs Development Agreement – Council voted 4-1 in favor of the Downs Development Agreement, with Mayor Pro Tem Barbara Moroski-Browne voting against it.

The developer’s final site plan next goes to the Planning Commission for review. There were several conditional items from the preliminary site plan approval that the PC said they would resolve at the next stage. When finalized, the final site plan will become part of the Downs Development Agreement.

Public hearing to establish a Commercial Rehabilitation District (also known as P.A. 210) –
There were two parts to this action: the public hearing and a vote by Council.
Numerous people spoke at the public hearing. You can hear their comments (starting at 2:06:42) on the meeting video. P.A. 210 was approved on a 4-1 vote, with Mayor Pro tem Barbara Moroski-Brown opposing it.

Act 210 Commercial Rehabilitation Abatement –
Following approval of P.A. 210, Perennial Northville, LLC, submitted an application for issuance of a Commercial Rehabilitation Exemption Certificate for the property. The application was formally received by the city on or about Jan. 4, 2023. The company represented in its application that it will construct a new mixed-use apartment and commercial building (the development as depicted in the Final PUD Site Plan to be approved by the city of Northville Planning Commission, on the property (the “Building Investment”) and that the property is commercial property, and the mixed-use apartment and commercial building is a qualified facility. The city and company desire to enter into this agreement for the purpose of setting forth the terms and conditions under which the certificate shall be approved and issued by the State Tax Commission for the property proposed to be exempt from ad valorem real property taxes.

The tax abatement offsets development costs for public benefits. The plan calls for the developer to pay $1.6 million in up-front costs for three infrastructure items: $550,000 for the roundabout at 7 Mile and Sheldon; $300,000 for street rehabilitation at 7 Mile and Northville and at 7 Mile and S. Main St., $263,000 for a new 12” water main on Cady Street, and $500,000 for ‘gap’ funding. (funds needed to cover additional costs for these projects and/or to pay for other infrastructure impacted by the Downs development). Council Member Andrew Krenz pointed out that the $3.5 million tax abatement that the developer will receive over a 12-year period will not raise taxes on residents.
This measure was approved 4-1 by Council with Mayor Pro tem Barbara Moroski-Browne voting against it.

Public hearing to approve exemption certificate – Two residents spoke during this portion of the meeting. Roxanne Casterline, 122 W. Dunlap, asked why the city has to give any incentive or tax abatement to the developer since they will make a profit from the development. Michelle Aniol, 402 Yerkes, thanked Council Member Krenz for his comments. She said the city can use a different tool to fund the $1.6 million in infrastructure improvements through the brownfield rather than a tax abatement.

Brownfield Plan – As part of the Downs Development Agreement, the developer – operating as Perennial Northville LLC – seeks a brownfield to remedy the property of hazardous materials in preparation for new development, new parks and a daylighted river. To lessen the financial burden, they want financial assistance through tax increment revenues, which taps into future tax revenues for a set period of time. The plan would cover three eligible activities:

1) Department specific activities – Baseline environmental assessment (BEA)
activities, Environmental response activities
2) Non-environmental activities – Demolition/hazardous materials activities and
infrastructure improvements
3) 15% contingency, Brownfield and Act 381 Work Plan preparation and implementation, and interest. (as well as Brownfield Redevelopment Authority administrative and operating fees)

In addition, the Brownfield Plan would put the first $300,000 into the Local Revolving Fund for use in other remediation projects in the city.

Pat McGow, chair of the Brownfield Redevelopment Authority and previously of DPAC (Downs Project Advisory Committee), explained the measure to Council and the audience. The Brownfield Act covers the redevelopment of functionally obsolete activities, such as the demolition of structures, remediation of lead and asbestos, and underground remedies. The expectation is that there will be an increase in tax generated with the new project that supplants the brownfield. The description of eligible activity amounts to more than $17 million, of which $4.7 million is environmental and $8 million is for demolition, with contingency and interest on both of those costs. There are two caps put in place: the reimbursement can’t top $17,787,861 and there’s a duration on the capture, with 100% capture from 2024 to 2029 and shared capture beginning in 2030. In 2034 and after, all tax revenues come to the city.

The TIF tables used in the Dec. 21, 2022 Brownfield document will be updated. Also there was a mistake that will be corrected: the DDA should receive $50,000 rather than the LBRF fund
(Local Brownfield Revolving Fund).

Public hearing on Brownfield
Nancy Darga, 516 N. Center, said she is supportive of the Brownfield. She encouraged Council to look at the development agreement to see when the river property will be turned over to Wayne County Land Bank so clean-up will be eligible for reimbursement and when it will return as land owned by the city.

Emmett Clark, 777 Spring, asked a question about the tax basis year and the equivalent value used in the calculations.

Michelle Aniol, 402 Yerkes, (who also sat on the Brownfield Redevelopment Authority), said McGow did a great job in presenting the Brownfield report. She wants Council to ask at tonight’s meeting about the status of an application that was to have been submitted to EGLE by Mr. Barr and the developer in early 2023 to offset some of the cost of the brownfield. (The mayor later asked Mr. Barr to look into that and report back.)

Council action – The Brownfield plan as recommended by the Brownfield Redevelopment Authority was unanimously approved by Council.

Public comments (made at the beginning of the meeting and not related to any agenda items)
Emmett Clark, 777 Spring, said he’s disappointed that the transportation services for seniors have been cancelled. He said he’s speaking for himself and 250 other residents who rely on this service. Mayor Brian Turnbull noted that the service will resume at the end of the month.

Council communication
Mayor Brian Turnbull said the Victorian festival is being held this weekend in Northville and encouraged people to attend. He reminded people to look at the historic photos at City Hall.

View the meeting video here.