St. Clair County is tabling talks over a brownfield plan proposed for a multimillion-dollar housing project in Algonac after questions about the deal emerged last week from some residents and officials.
The development draws out 52 single-family homes, ranging from 1,287 to 1,526 square feet in size, on 19.346 acres at Mill and State streets with a project investment estimated at $18 million. It is part of a bigger plan that’d enable the builder, Corcat Properties, to recoup roughly $3.8 million in eligible costs for site improvements, particularly new infrastructure to support the homes.
A contingent of downriver residents, however, are airing concerns that the 24-year term under the proposed brownfield plan was too long to keep tax revenue from local jurisdictions, while some officials raised caution in using brownfield financing on a housing development — newly allowed under a law passed by the state’s Democratic lawmakers in 2023.
“I think the community has some questions,” Commissioner Lisa Beedon said during the July 25 county board of commissioners meeting, “and it’s only fair to them that we allow some time for them to get some more questions (answered).”
The county board was to return for committee meetings Thursday, and Corcat’s plan, which has already been OK’d by the county’s brownfield authority and Algonac City Council members, remains tabled until pulled for action or discussion by board members.
Brownfield plans, which are traditionally used on old industrial or contaminated properties, determine what new taxes based on higher assessments of a property could be set aside temporarily as reimbursement to developers for site environmental costs.
Officials have said that Corcat’s plans would fill a “missing middle” demographic in the wider housing shortage plaguing growth in American communities.
If the brownfield plan is approved at the county board level, construction would be projected to begin this winter and an approximated build-out schedule of eight homes a year until work in completed by the end of 2032.
If not, Paul Muscat, an owner with Corcat, said kicking off construction otherwise may prove cost-prohibitive and prevent keeping home sale prices lower in the $300,000 range.
“It could potentially cancel the project,” he said Friday. “I can’t sell these houses. The infrastructure costs and the construction costs are high in today’s current climate. The houses would be $490,000 if we had to use our current pricing.”
Muscat referred comments on the brownfield-specific issues to Jeff Hawkins at Fishbeck, the engineering firm that prepared the brownfield proposal. Hawkins had not commented as of Tuesday.
Now, the use of the brownfield incentive overall is also giving a glimpse into the wider issue facing local communities looking to attract developers for both traditional residential developments, such as Corcat, or affordable housing projects — many of whom are left to compete for support in other programs through the Michigan State Housing Development Authority.
How does the brownfield plan work?
Tax increment financing has been around as an incentive for development for decades, capturing a set amount to fund improvements within set boundaries in several different forms. There’s a local neighborhood improvement authority, such as recently set up by the city of Port Huron in South Park, or a local development finance authority, such as set up around for infrastructure costs around the expanded Magna plant in St. Clair.
Gov. Gretchen Whitmer signed a measure in July last year that amended the state’s Brownfield Redevelopment Financing Act to add the new reimbursement incentives for housing real estate development.
Previously, Dan Casey, CEO of the St. Clair County Economic Development Alliance, said there were few means in the economic development toolbox to address the ongoing housing shortage outside of a MSHDA tax credit, especially for affordable housing.
If successful in Algonac, it’d be St. Clair County’s first housing brownfield.
But Casey said that doesn’t necessarily mean the incentive is right for every community.
“They all have to make their own decisions on a project-by-project basis,” he said earlier this week. “I think that’s an important point … to understand that this is not a tool that’s going to become the norm. That’s not going to occur for every single project.
“It’s really going to be based on the community’s interest in using this tool, and the community has to decide if they want the project. And even if they want the project, but they don’t want to use the TIF (tax-increment financing), well, then that falls back on the developer to decide whether they want to proceed.”
Still, another housing brownfield could be in the works in the city of Port Huron, where a small handful of residential developments are on hold citing MSHDA support.
Port Huron officials OK’d an informal commitment statement for 14 duplex-style condominiums around city-owned property off 25th and 26th streets with Michigan Community Capital with $650,000 in COVID stimulus fonds helping finance any funding gap for the development.
City Manager James Freed said they may bring the brownfield TIF incentive before City Council sometime this fall. Like in Algonac, it’d have to go before the county’s authority and board of commissioners. “The problem with these new tools, economic development tools, is they no longer become incentives,” Freed said. “They become expectations, right? So, now, every developer in the state won’t build until they get a brownfield house. So, the state did this, I guess, a little short-sighted, but since it’s out there, yes, we will use it.”
According to the Algonac brownfield plan, Corcat’s eligible reimbursement costs included:
- $856,220 for storm sewers
- $716,585 for streets and roads
- $562,270 for sanitary sewer service and connections
- $424,890 for water service and connections
- $212,000 for landscaping
- $53,000 for lighting
- $13,780 for sidewalks
A 3% interest calculation was also added to total costs, adding over $800,000 to the $3 million in infrastructure work.
The 24-year capture term includes 19 years for the developer and five years for the local brownfield revolving fund, where about $1.4 million would be deposited.
The local taxing jurisdictions affected over time would include the county and city of Algonac, as well as millages for seniors, the county Drug Task Force, the library system, parks, EMS, and St. Clair County Community College, among others.
Four parcels overall were included at 873 and 795 Mill St. and 1827 and 1826 State St. in Algonac. The initial taxable value there would be $156,370, according to the county, and over $8.56 million in the future.
Act 381_Brownfield Plan_Corcat Properties_St. Clair County BRA_2024_0617 by Jackie Smith on Scribd
What were the local concerns about the brownfield plan?
County Commissioners Dave Rushing and Steve Simasko have indicated they would’ve voted against the Corcat brownfield plan in Algonac — Rushing earlier in July and Simasko at the July 25 meeting — had it gone forward.
Last week, they were among the commissioners to raise questions.
Citing the 2023 legislation change, Simasko said, “Philosophically, I don’t like the idea of getting into the housing finance business,” and proposed future discussion about implementing a county policy about how the board would handle how brownfield plans were utilized.
Rushing raised multiple questions, including the zoning of the property when Corcat purchased it. The State Street properties were picked up in April this year, according to the county register of deeds, while the Mill Street parcels were bought in 2017 and 2016.
He pointed to broader issues with the length of the brownfield plan as a contract and said, “They have the money. I don’t know why they need a 24-year tax abatement if they have the money in their corporation.”
Other commissioners were careful not to infer a county-level decision that would interfere with that of officials in Algonac, where more specific site plans and details would go before local boards for approval later on.
Algonac officials, too, referenced preliminary site plans requiring planning commission approval when council OK’d the brownfield plan in early July.
A few residents told county officials July 25 that they hadn’t been aware until days before that the brownfield plan was making its way through local approvals.
“I don’t know all the ins and outs about it,” said Joseph Green, who lives near the Corcat site on Mill Street in Algonac. “The payback period from what I’m hearing, 24, 25 years, I don’t understand it. And I think a lot of people in the community don’t either. That’s including Algonac and St. Clair County.”
Others had read through the plan and objected to the idea of incentivizing builders.
Kimball resident Robert Fielitz, who’s running for county board, said he thought it “steals money form the citizens that voted” for specific millages. China Township resident Tiffany Turke, who’s also running, said she was concerned about the precedent it set, adding, “Not only do I think people would object to rapidly growing their small communities like that, but it doesn’t directly benefit our local communities.”
Resident Libby Prill also said, “It’ll be years before the public realizes any significant tax capture. We could be creating an artificially affordable market pricing that might negatively impact existing home values.
Conversely, resident Sean O’Brien pointed to the concerted effort among residents against the brownfield plan that wasn’t “necessarily representative” of everyone in southern St. Clair County.
A city commissioner in Marine City, he said there was still excitement at a new housing development coming in that could mean “more people” for area shops and restaurants and community at large, and he understood that housing and development costs “are incredibly high right now.”
“This is why you need public funds to make something like this happen,” O’Brien said. “It’s a very imperfect deal. There’s a lot of things wrong with it. Maybe some better negotiation could have changed aspects, but something similar would be the end result. It’s not unusual for a developer to pitch a certain period of time or certain amount of money. That’ show these pitches work in all development projects. But if we’re going to make affordable housing, it takes a contribution from the public to make it affordable.”
Contact reporter Jackie Smith at (810) 989-6270 or jssmith@gannett.com .
This article originally appeared on Port Huron Times Herald: County officials paused brownfield talks for a massive Algonac housing project. Here's why.
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