By: Benjamin J. Gohs, Associate Editor
The two official bodies capable of granting Dilworth Hotel developers brownfield status were nearly unanimous in their respective decisions last week.[private]
The lone dissenting vote originated from Boyne City Commissioner Mike Cummings, uncertain of Landmark Development’s commitment to the project.
“The developer is never going to own any of that, he’s just putting it together and getting all of the future tax benefits,” Cummings said in an interview one day after Boyne City officials approved the brownfield plan. “I’ve heard that the whole community is behind this; I’d beg to differ with that.”
He added, “It’s just that the silent majority hasn’t spoken up, or has tried through their elected leadership and hasn’t gotten through.”
Landmark Devevlopment officials contend the $3 million investment in the community, 25 full-time jobs, and secondary economic development spurred by the project will be well worth a tax credit here or there.
“We have better than a third of that in place right now,” said Landmark official Tom Johnson. “We need these kind of commitments to do that.”
Johnson added that no construction will begin until all the $3.5 million funding is in place.
“I don’t want to end up with the hole in Petoskey,” Cummings said. “I don’t want to end up with the solar panel company in California that, after the state of Michigan takes our tax money and gives it to you, that it goes awry.”
Johnson said Landmark has done nothing which would illustrate an unwillingness to follow the project to completion.
“We were asked to put together a winning proposal to make this project work … almost two years ago,” he said. “So, I went out and I found the best team in the country.”
Brownfield redevelopment was originally primarily intended for contaminated properties like former gas stations, but it now includes “functional obsolescence” which simply put means the building is not useable as-is.
The idea behind brownfield redevelopment is that urban sprawl could be mitigated by encouraging development on previously contaminated or obsolete sites.
Updating things like heating and cooling, plumbing and electrical must be completed in order to make the Dilworth viable.
The tax credits in question can only be capture by the developer once the project is completed. Any monies saved may be used toward the cost of improving the property.
“This keeps all the city’s options and Landmark’s options open to make use of what available resources are available to make sure this project cash-flows properly,” Cain said. “All of these things are going to require specific approval of the city commission for any of them to be used.”
Also discussed were the $400,000 signature grant which will be applied to the purchase price of the property; and a $200,000 façade program grant which will be used to fix the hotel’s exterior.
According to city officials, the State of Michigan is optimistic about Landmark’s chances of getting the grants, but there are still steps which must be taken in order to secure them.
“The state wants to see community support,” Cain said.
If Landmark receives the $400,000 grant, it will need to supply $125,000 of its own money to purchase the Dilworth, which Landmark says has been appraised at $525,000.
Cummings said he is against the grants and tax credits in question.
“That’s taxpayer money, not free money. That’s paid for by us,” he said. “Nobody seems to see that but me.”
Cummings added, “If they had bought the building and had any skin in the game, I’d be all for it, but they are just looking for our money to put in.”
Scott MacKenzie said, by giving the project every tool available to be successful, it accomplishes two major city commission goals.
“One, the community wants to develop and support the Dilworth Hotel; two, is jobs creation,” he said.
Boyne Area Chamber of Commerce Executive Director Jim Baumann said, “What’s not to like if the potential is more jobs, more visitors, more tax revenue for the city, and just a better atmosphere downtown?”
Vondra said throughout the whole process he has been talking with Landmark and fact-checking to ensure the city is covered in the event any issues arise.
“To this point I can tell you … they haven’t misrepresented anything that I have checked with the people, the operator … and I met with all these people and so far this project has been on the up and up,” Vondra said.[/private]