WYOMING — Wyoming city officials are expected tonight to formally designate a Walker site as a brownfield project, for development as a major "retail destination" centered around a proposed Cabela's store. The designation permits public infrastructure needed at the site to be financed through future property taxes on the land and buildings.
The proposed OrchardPark development project, 302 acres on the north side of I-96 in Walker, recently received approval from the Michigan Economic Development Corp. for a key part of the financing needed for construction of new streets, sidewalks, sewers and water mains, plus required reconstruction of existing roads and other infrastructure around the site.
Walker Orchard Land Partners LLC, and Northgate-Bristol LLC, led by developer James F. Bossenbroek, asked the MEDC months ago to include state education taxes on the development property in the tax increment financing allowed under Michigan's brownfield law. The developer already had approval for use of local property tax revenues from the site for infrastructure costs, which Wyoming City Manager Curtis Holt said would only cover about half of the money needed for infrastructure.
Walker officials estimated previously that infrastructure may cost about $20 million. Bossenbroek has maintained from the start of this project two years ago that the developers cannot afford to front the money for infrastructure, and Walker officials have said the city cannot afford it, either.
According to Bridget Beckman, a public information officer with the MEDC, here is what the state is willing to provide:
The Michigan Department of Transportation is "willing to cover road costs of approximately $2.73 million" for I-96 off-ramp improvements, reconstruction/widening of Bristol Avenue, improvement of the intersection of 3 Mile Road and Walker Avenue, and widening/reconstruction of 4 Mile Road.
Bossenbroek is proposing construction in two phases, with the first phase being construction of a Cabela's store. Ultimately the total project is supposed to result in a number of retail stores, a hotel and waterpark, multi-family housing, senior living facilities, office space and other commercial businesses.
Rob VerHeulen, mayor of Walker, said that resolving the tax increment financing issue with the state of Michigan "was a big hurdle for (Walker Orchard Land Partners) and it appears they have jumped it."
However, Walker city officials have withheld their final approval for construction to start, until they have approved a detailed site plan from the developer.
"We have come to an agreement with the infrastructure," said VerHeulen, but he added, "they haven't submitted a site plan."
At a meeting last summer, Walker city commissioners told Bossenbroek he has until the end of January to come up with a detailed development plan they will approve. They have consistently maintained they do not want to end up with more "big box" development like that on Alpine Avenue, a very congested area.
Wyoming is involved because it is a state designated "core city," which means it can use tax increment financing to pay for cleanup of contaminated "brownfield" sites. The proposed site in Walker includes old apple orchards where lead arsenate had been used as a pesticide. Traces of it have been found in the soil, so it qualifies as a brownfield. Walker is not a core city, but state law allows two communities to enter into a Public Act 425 agreement, allowing Wyoming to collect property taxes on the development site in Walker for the next 30 years. Wyoming has a much higher property tax rate than does Walker. Wyoming will issue bonds to be used for development of the infrastructure — which becomes public property when completed — and cleanup of the contamination. The increased amount of taxes the property owners will pay as the land increases in value each year will be used to pay off the bonds, plus interest.
For its role in the TIF, the city of Wyoming will get $75,000 per year from the tax increments, according to the latest brownfield plan submitted to Walker by Wyoming
Holt said the base value of the undeveloped land now is about $5 million. Once a Cabela's store is built there, that building alone could be taxed at a value of $25 million, he said.
Although Kent County commissioners have questioned whether agricultural land qualifies for brownfield tax increment financing (see related story), VerHeulen said attorneys for both Wyoming and Walker have reviewed the proposal and the state law, "and everyone tells us it is an appropriate mechanism" for the development of the land.
Mayor Carol S. Sheets of Wyoming believes the OrchardPark site will be approved as a brownfield by the Wyoming council without any problem.
"We had a public hearing on this last week and not one person spoke against it," she said last week.
"We understand the economic implications of working together with Walker and bringing the project into our area," she said. "We see this as a real plus for West Michigan. These are difficult times in the state of Michigan, and we need to do whatever we can to increase our tourism and promote economic development."
Holt noted that the brownfield plan put together by Wyoming, with input from the developer, lists costs of up to $58 million for "work plan preparation" at the Walker site, and another $50 million for interest on the bonds, but he emphasized that those are "very high-end numbers," overstated somewhat to be on the safe side.