GRAND HAVEN, Mich. — A proposed $2 million renovation of the empty Floto's building in downtown Grand Haven has sparked mixed reactions from neighbors and business owners over the project's hefty incentive package.
WATCH: Grand Haven neighbors split on $2M Floto's building renovation incentives
The development plan calls for three apartments upstairs and a renovated ground floor for restaurant or retail space. However, the developer is seeking nearly $1.1 million in public incentives to make the project financially viable.
The building owner is requesting a $250,000 grant from the Michigan Economic Development Corporation (MEDC), and is asking the city to approve two tax abatements. One, is an Obsolete Property Rehabilitation Act (OPRA) certificate, exempting the property owner from paying taxes on the property for 12 years, totaling $252,104. The other is a Brownfield Tax Increment Financing (TIF) which would freeze taxes on the property at their current rate for 25 years, totaling $589,800.
"Construction costs have gone nowhere but up. Interest rates remain high. It makes these projects tough to pencil," said Jared Belka, an attorney working with the property owner.
In order to receive the tax abatements the three apartments have been made affordable for people making 100% of the area's median income, or between $60,000 and $65,000 a year.
Local residents and business owners support filling the vacant building but question the extensive public funding required.
"It's kind of an eyesore now, and empty, but to have that filled with a restaurant would be awesome," said Bob Heimach, a Grand Haven neighbor.
However, Heimach expressed concerns about the lengthy timeline for public return on investment.
"They'll be making lots of money while we're waiting for the payoff. So, something of a shared value so that immediately the public could get something out of this, not just a nice restaurant," Heimach said.
Thomas Tebeau, owner of Hotstetters News Agency located nearby, acknowledges mixed feelings about the tax incentives but emphasizes the importance of keeping downtown spaces occupied.
"Tax abatements — I'm not big on that, but you need something in there," Tebeau said. "Downtown needs retail. Definitely."
Grand Haven City Council members will vote on the tax abatement requests at their March 2 meeting.
