By SUE SUCHYTA
Sunday Times Newspapers
WYANDOTTE – The City Council approved Rise Above Ventures’ redevelopment plan for the former city hall, 3131 Biddle, and nearby parking into residential units and commercial space at its July 26 meeting.
Following a due diligence period, Ron Thomas of RAV produced development and purchase agreements, and a development timeline for the council’s consideration, with a $100,000 sale price, and a $10,000 deposit.
The project would include more than 30 residential units and 5,000 square feet of residential space. The plan also incorporates the gravel parking lot at 3149 Biddle and the lease of adjacent parking lot No. 4, a portion of which would remain public parking for the existing commercial businesses.
The redevelopment is consistent with Wyandotte’s master plan, as well as the city’s downtown strategic plan.
The project schedule projects a Dec. 31 building concept and final site plan approval, funding and financing approval, and a public hearing.
Construction is projected to begin May 1, 2022, with a May 1, 2024 completion date.
In a redevelopment summary, Thomas states that it would “be easy to invest more redeveloping Biddle than its true market value,” so, therefore, the investment must be “very targeted,” with a “cooperative approach to public and private financing,” and it is crucial that the redevelopment “make use of the existing features of the site to the greatest extent possible.”
Thomas said the multi-family residential redevelopment, with first floor retail and commercial space on the west side, facing Biddle, with the rest of the building residential, and the possible inclusion of an additional story. The marketable use of the basement is still under consideration.
He said a proposal for a hotel was abandoned in favor of 12 units, either efficiencies or one-bedroom suites, designed to serve the needs of transient tenants.
“The downtown Wyandotte middle-to-upper quality attached housing market is likely slightly undersupplied at present, but likely to be near equilibrium or saturation once currently planned developments are complete,” Thomas said in a written redevelopment summary. “This is good for the city, and it will bring more residents and economic activity.”
He estimates that approximately 47 parking spaces will be needed to accommodate the redevelopment.
Thomas estimated that the redevelopment would generate $102,000 in tax revenue annually for the city.
He notes a greater than $2 million funding gap, which may be bridged through the use of recapturable tax revenue.
Thomas said the redevelopment, with three stories, each 11,000 square feet, representing $150 per square foot in redevelopment costs, would represent a $4.95 million investment, with an additional $1.2 million needed in public infrastructure upgrades.
He said that, since the fair market value of the proposed redevelopment would be worth about $2.9 million when completed, that leaves a $2 million financing gap, plus the infrastructure cost, for a developer to break even.
Thomas suggests that the creation of a Tax Increment Financing plan to offset the capital investment costs, which the city could use for other development nearby. He also mentioned Neighborhood Enterprise Zone funding as an option.
“Recapturable tax revenue maybe be of value to both a developer and the city for infrastructure improvements,” Thomas noted in the project summary. “It is worth noting that tax abatements may be less preferable than ordinary taxation upon completion, with those revenues recaptured by interested parties.”
Thomas noted that banks view the redevelopment of vacant property as risky, and while he has a successful track record of similar developments in the area, it is likely that private investors must be found for at least 50 percent of the investment.
He noted that 3131 Biddle has been vacant for years, produces no tax revenue, and supports no jobs while it sits empty.
“It is an eyesore that sits front and center in downtown,” Thomas noted in the summary. “This redevelopment would bring back to life the last large, vacant building in Wyandotte’s downtown in a way that furthers the city’s position as a great place to live, work and play.”