The Ypsilanti Courier
A Heritage Newspaper
Weekly Publication
City to borrow $900,000 for Water Street
Loans taken out from EPA and brownfield site authority
By Christine Laughren, Staff Writer
PUBLISHED: June 19, 2008
In an effort to spur economic development of its Water Street property, city of Ypsilanti offciials are seeking nearly $900,000 of funds available through the Environmental Protection Agency.
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In a five to one vote the City Council granted approval Tuesday evening to begin the grant and loan application process for $750,000 in loans and $120,000 in grants from the Washtenaw County Brownfield Authority.
The funds would be used for environmental clean-up and possible demolition of the Water Street property along Michigan Avenue.
Council members agreed in May to revise Water Street's master plan and sell parcels of the property to smaller developers. Mayor Paul Schreiber said the environmental remediation of pieces of the property might encourage development.
"The smaller developer, which we now hold as our first line of defense, would not necessarily undertake the cost of remediation," Schreiber said. "I have to believe that clean land is worth more from a developer's stand point."
Jeremy McCallion, a Brownfield Planner for Washtenaw County, said the EPA are only available to the WCBA through the end of August. He emphasized the city needs to act soon if it wants to take advantage of the funds.
The city needs to negotiate payment options with the WCBRA but the best scenario according to Assistant City Manager April McGrath would be no interest and no payments for five years and a15 year loan term.
The city was awarded a $500,000 grant and a $500,000 loan from the Clean Michigan Initiative in 2004. However, it had to return the grant money to the state in September 2007 because it did not have a developer for the property.
McGrath said the city manager's office is also considering returning the $500,000 loan, which is due this September.
"Currently, we do not have a developer and one of the major contingencies of utilizing this funding is a signed development agreement," McGrath wrote in a Request for Legislation to the City Council. "Additionally, if we did find a developer and the loan funds were used, interest and repayment would begin in September 2009, which would provide a short time period for private investment and corresponding tax increment revenue to build."
McGrath estimated progress on the site might begin in six to nine months after the application process is finished. However, she stressed the estimate was a rough one.
Councilwoman Lois Richardson, the only member of Council to vote against the resolution, said that she does not agree with sinking more money into the property in addition to the debt payments the city has to start making next year.
Progress on the 38-acre property began in 1999 when the city was awarded $7 million in grants and loans from the Environmental Protection Agency.
Since that time two developers, Biltmore Properties, Inc. and Joseph Freed and Associates, have pulled out of negotiations with the city.
The city is now strapped with approximately $2 million in payments to be made starting in fiscal year 2009-2010.
Water Street still has approximately $3.7 million worth of environmental action that needs to occur on the site. About one-third of the property has been cleaned up.
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