GRAND HAVEN, Mich. — Developers hoping to bring more than 118 new townhomes and apartments to the former Dake property west of US-31 in Grand Haven faced pushback from neighbors and City Council members Monday night, with concerns centered on a proposed tax incentive and whether it would truly deliver affordable housing.
WATCH: Grand Haven council weighs tax break for South Village housing project
Developers are asking City Council to consider two tax break options. Each option provides 24 affordable apartments. Under the smaller tax break option at $10,840,169 over 16 years, rent for those units would be $2,699 a month for a 2-bedroom. The larger tax break at $16,472,575 over 22 years would hold rent for 12 of those units at $2,077 a month.
Grand Haven neighbor Daniel Muellerleile questioned what the city stood to gain from the arrangement.
"I don't know what the city is playing to gain from this, especially if you're giving any kind of reproach on taxes," Muellerleile said.
Grand Haven Council Member Sarah Kallio raised concerns about whether residents could realistically afford the units.
"About 75% of our city would not be able to afford to rent one of these units," Kallio said.
Kallio also pressed the project's consultant on if the tax incentives actually provide rents at less than market value.
The consultant with the project, Joe Agostinelli acknowledged the gap between the proposed affordable rate and market rate was minimal.
"Is there a meaningful difference between the market rate and 120? The answer is no, there is not a meaningful difference," Agostinelli said.
Agostinelli pointed to $2 million in site cleanup and preparation costs, along with rising construction costs and a challenging market, as factors driving the need for a tax incentive.
"Market rate development candidly doesn't make sense largely in any market in Michigan, except the city of Ann Arbor," Agostinelli said.
Despite affordability concerns, Council members also encouraged collaboration and expressed support for redeveloping the long-vacant industrial site.
"I don't think that having a big building empty is a good thing for our city, so I value the fact that we have development looking into this," Kallio said.
City Council is expected to give their decision on the tax break at their June 16 meeting.
