Walker Pushes Ahead Orchard Park Project

July 27, 2007
| By Pete Daly |
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WALKER — The city of Walker has set a timetable for key steps in the $200 million Orchard Park retail/tourist/residential project that a developer wants to build around a Cabela's sporting goods superstore.

Meanwhile, Walker Mayor Rob VerHeulen received a letter, dated July 20, from Cabela's Michael Callahan, senior vice president of retail operations, stating that Cabela's wants to be part of the project, "so long as all of the various components of the financing package can be satisfactorily finalized in a timely manner. We understand that the timeline suggests that final approvals can be provided by the end of September. We could potentially be under construction early next spring with an opening by spring 2009."

But VerHeulen pointed out at a city commission meeting last week that "it is absolutely not true that this is a done deal." He reiterated that the project is contingent on agreements to be worked out with Wyoming, and that Walker officials must also approve a detailed development plan from the developer, Jim Bossenbroek of Northgate Holdings, by the end of January or the project will be terminated.

Northgate Holdings has bought the rights to 242 acres of old apple orchards and undeveloped farm land, bordered by Four Mile Road on the north, the I-96 expressway on the south, Walker Avenue on the west and Bristol Avenue on the east. Northgate recently added to the development parcel an additional 60 acres of undeveloped land on the east side of Bristol Avenue, which has been proposed for a combination hotel/water park. The site for the proposed Cabela's store would be opposite the hotel/water park on the west side of Bristol Avenue where it can be seen from the expressway and where it would be surrounded by other retail businesses.

Since the project was first proposed two years ago, city officials have endorsed the idea of a commercial development featuring a Cabela's store, because a Cabela's can reportedly attract millions of people a year. It creates a so-called "retail destination" that frequently leads to many other business springing up around it, including other retail stores, hotels, restaurants and tourist attractions.

The city of Walker relies far more on its city income tax for revenue than on its property tax. Walker City Manager Cathy Vander Meulen said city officials have heard speculation that the Orchard Park development could create 2,000 to 3,000 new jobs.

City officials have estimated it may require $20 million to build and improve infrastructure in and around the Orchard Park site. Infrastructure includes city-owned and maintained streets, sidewalks, water lines, sewers, and landscaped open areas for public use.

The soil at the proposed development contains trace amounts of lead arsenate, used throughout Michigan as an orchard pesticide during much of the 20th century, so the land is a state-designated brownfield site. That means the Michigan Department of Environmental Quality may require removal or treatment of contaminated soil before the land can be developed. The Michigan Economic Development Corp. also is involved with brownfield sites, which can qualify for tax increment financing, in which local property taxes are captured by core city governments to pay for cleanup costs.

The developer has maintained he cannot afford to build the infrastructure, which would be owned and maintained by the city — and city officials have pledged the taxpayers of Walker will not be required to pay for its construction, either.

To resolve that finance problem, last week Walker commissioners approved a proposed Public Act 425 agreement with the city of Wyoming. If approved by the Wyoming city council at its Aug. 6 meeting, the agreement would set up tax increment financing for the Orchard Park project by transferring jurisdiction for taxation of the 300-plus acres to Wyoming for up to 30 years. Wyoming's tax rate is almost eight times the Walker rate of 1.36 mills. Wyoming is also a state-designated "core city" — Walker is not — which means Wyoming can, under state brownfield regulations, use some of the tax revenue from the Orchard Park site to pay off long-term bonds that would finance the infrastructure and environmental cleanup.

The theory is that as the development is completed and retail stores move in, those property values will increase dramatically, soon generating enough tax revenue to pay off the infrastructure bonds well before the end of the 30-year agreement. When the bonds are paid off, the agreement will automatically terminate, and taxing jurisdiction returns to Walker.

Walker would also continue to receive its normal tax revenue from the development site, and Wyoming would benefit by keeping a share of the extra revenue generated by the higher tax rate.

The July 20 letter from Cabela's to the Walker mayor states: "It appears that with the possibility of the cities of Walker and Wyoming approving the 425 Agreement as well as with the MEDC and DEQ participation that a suitable finance package can be structured to move this project forward."

Other issues must be resolved, however. Walker officials are adamant that they do not want to see "another Alpine Avenue" type of business district, where traffic congestion is a serious problem and where there are few residential or "pedestrian-friendly" areas. Thus they have insisted that the Orchard Park development must include residential townhouses and be pedestrian friendly with public green spaces. They have also expressed aesthetic concerns about "big box" stores filling the retail area around a Cabela's store.

Bossenbroek recently moved back his construction timetable for the section of the development that will include the townhouses, and the size of some of the proposed retail buildings that would surround Cabela's has increased.

Cabela's is the key, however. Without it, there will reportedly be no Orchard Park development. Walker officials had recently pressed Bossenbroek for something in writing that confirmed Cabela's intent to build a store in Walker, which led to the letter from Cabela's.

At the public hearing on the PA 425 agreement on July 23, Walker officials also reassured Walker residents that they are not subsidizing the Orchard Park project.

Ver Huelen said the PA 425 is being proposed "so the (Orchard Park) property owners will pay for all infrastructure" through their increased tax payments.

According to Vander Meulen, Bossenbroek and another developer previously involved in the Orchard Park project have put money into an escrow account over the last two years to cover all outside costs incurred by the city in legal fees, engineering studies and consultant fees. She said those costs have totaled $55,000 to date, leaving $20,000 remaining in the escrow account.  

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