Tax abatement process moves forwards after 6-1 vote

By Megan Kelley
Staff Writer
LAKE ORION — The Lake Orion Village Council held their public hearing for the consideration of a Commercial Rehabilitation Exception Certificate for the West Construction project at 55. W. Elizabeth Street, also known as the Ehman Center.
The council held a public hearing earlier this year in July where they determined that the district did meet the requirements and voted to establish a Commercial Rehabilitation District for the property.
With the district established, West Construction may now submit their application for an Exemption Certificate, or tax abatement.
The village estimates that the financial impact of the abatement will be around $50,000 to $60,000 in annual tax abatements over a 10 year period.
Speaking for West Construction was attorney Matt Gibb, who informed the council that the project is currently on track and gave a brief reminder of the scope of the project.
“We’re seeking an abatement of the taxes that would be charged, in addition to those that are currently and presently paid,” Gibb said. “The project continues to be very tenuous from a financial standpoint, while the developer is putting a substantial amount of their own equity of their own money into the project.”
Gibb also mentioned the rise in inflation impacting the cost of construction, noting that he’s aware that isn’t anyone else’s problem, but it does make their work harder.
Gibb also noted that West Construction is only asking for a commercial rehabilitation, what he calls the “minimum contribution” that would allow them to do the historic preservation.
A few community members spoke during public comment to support the project, while others expressed concerns about residents and the village itself having to pick up the tax burden once construction is complete.
Later in the meeting, the council held their discussion about the application and voted 6-1 in favor of granting the 10 year certificate request, with Councilmember Michael Lamb casting the lone nay vote.
President Pro-Tem Jerry Narsh got the ball rolling by making the motion to approve the application for Exception Certificate, which was seconded by Councilmember Sarah Luchsinger.
“I had an optic over the last 38 years of watching that building and watching that property, policing it, keeping drug use out of it, potential arson from inside of it, people breaking into it, the constant crime, the constant vandalism and I look at it as an old car that we’ve had as a community sitting out front with a for sale sign on it,” Narsh said. “Here’s a piece of property with a historic building, sitting out there for 30 years and everybody just drove by and nobody stopped. We had a couple stop and inquire but nobody really wanted the car, nobody kicked the tires. We finally got a very reputable developer on historic property come in.”
Narsh also said that he believed the preservation of the community’s old high school was “priceless.”
Lamb, who cast the sole nay vote, responded with his own comments, saying that most people he speaks with in the village don’t care about the old high school.
“My high school was torn down and turned into a gymnasium, it’s a beautiful building. Most of the residents I’ve talked to could care less about the high school, they don’t want to spend half a million dollars in tax revenue to support a developer to make a lot of money off of the project,” Lamb said.
“When we come in and ask for 100 percent tax abatement for 10 years and we can’t do the project without that money, and then we pay $1,000,000 for a property that costs $51,000 and then we have three $40,000,000 projects along the lake shore, I’m not seeing the desperate need for a tax abatement,” Lamb added.
Lamb also said that he felt West Construction was not eligible for the abatement under the law.
Councilmember Theresa Rutt countered Lamb’s claim, stating that she believes historic preservation is important to the majority of the community and that just because there is a short term financial impact doesn’t mean that they should reject the application.
“We have people who want to do historic preservation and to just say ‘oh no, short term we’re not going to get the money so we’re going to say no,’ well we’re not going to get historic preservation and we’re not going to get the taxes long term.
“So, it just doesn’t make sense for me to deny it without any future prospect of additional revenue in the next 10 years. Nobody is lining up and knocking on the door of the property to develop it,” Rutt said.
According to council President Ken Van Portfliet, the Ehman Center has sat as it currently is for roughly 35 years and in that time he has seen five to seven attempts to restore it to no avail.
“The people I talk to are asking that we do something with it and these are people that, have attended there or haven’t attended there, are just looking for the betterment of the community,” Van Portfliet said.
Van Portfliet also pointed out that should the council vote no on the application, West Construction would be unable to receive financing assistance from the MEDC (Michigan Economic Development Corporation) to which Gibb added that without assistance from the MEDC, they would be unable to secure other financing for the project including their own equity.
“Every dollar that the MEDC is pledging is coordinated with the dollars that we’re asking here to complete the total construction,” Gibb said. “This is all originally based upon the estimate of this being approximately $21 to $22 million of total investment cost for the project.”
Gibb also stated that including the cost of building something (including wage and labor) the project will probably end up costing around $26 million.
After the approval of the application, the council also voted to extend the properties Planned Unit Development (PUD) for six months with the council voting unanimously in favor of the request.
With the extension, the project will likely be completed by the end of 2024.