Construction and Real Estate

City to see more residential projects

July 29, 2012
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LC Consultants LLC, an Ann Arbor-based for-profit developer, wants to turn the former Century Furniture Co. factory at 40 Logan St. SW into an 87-unit apartment building at a cost of $14.4 million.

The project would be done in two phases with the first stage creating 43 rental units and the second 44. There will be 16 one-bedroom apartments averaging 700 square feet and 71 two-bedroom units at roughly 800 square feet.

Monthly rents would range from $446-$669 for single-bedroom units and $536-$804 for two bedrooms. The building has 125,000 square feet of space and would include 12,500 square feet of commercial space for rent. The conversion would be done to LEED standards.

The building is near the Downtown Market being developed by the Downtown Development Authority and the Grand Action Committee.

After LC Consultants closes on the property with 40 Logan LLC, Century Lofts I and Century Lofts II Ltd. Dividend Housing Association LLC will become the building’s owners. The project will be largely financed through the sale of nearly $13 million worth of low-income housing tax credits and $1.4 million of state historic tax credits to an unnamed investor. The developer will also defray $55,000 of its development fee to the project.

City commissioners granted the project a tax abatement last week and agreed to a payment-in-lieu-of-taxes arrangement where the Century Lofts ownership groups will pay the city annual fees of 4 percent on its rental income instead of property taxes.

According to Kent County property records, 40 Logan bought the building in 2005 for $1.3 million. The structure’s State Equalized Value is $568,600; there aren’t any delinquent taxes. Century Furniture closed in the 1940s, and Connie Bohatch, managing director of community services for the city, said the building most recently has been used as a storage facility.

Commissioners also granted Brookstone Capital LLC of Midland a PILOT for its apartment project at 240 Ionia Ave. SE, a vacant lot adjacent to Heartside Park and also near the Downtown Market. The developer will put up a six-story, 75,000-square-foot building on the site. Brookstone plans to have 48 rental units in the building.

Ten apartments will be rented at market rate and range from $900 to $1,400 a month, while the rest will fall under the low-income housing program and go for a low of $339 to a high of $814. Both one- and-two-bedroom units will be offered. Twenty of the 48 will be two bedrooms at 850 square feet. The 28 one-bedroom units will be 700 square feet.

Brookstone has estimated the construction as costing $13.5 million and plans to sell low-income housing tax credits worth $11 million to an investor. Another $1.25 million in private financing is anticipated for the project, with $873,300 in brownfield tax credits going to the financing. Brookstone also will invest nearly $324,000 into the work.

The 240 Ionia Avenue Ltd. Dividend Housing Association Limited Partnership will be the building’s owner and will pay the city 4 percent of its annual rental income in lieu of property taxes.

Commissioners also gave Habitat for Humanity of Kent County their approval to submit applications for three Neighborhood Enterprise Zone Certificates, which will allow the nonprofit developer to build three new single-family homes in the Wealthy Heights NEZ. Two of the houses will go up on the 300 block of Freyling Place SE with the third being built on Robey Place SE.

“It’s one of the tools the city has to help neighborhoods,” said Haris Alibasic, who heads the city’s office of energy and sustainability, of the NEZ program.

“This is a project that has been in the works for quite a while,” added Commissioner Ruth Kelly.

Habitat for Humanity estimated that each of the Freyling homes will cost $182,000 to build. The price tag for the Robey house has been set at $169,500. The state has to approve Habitat’s applications. If it does, the property-tax bill on the homes would be lowered for a dozen years.

“Folks that live in those houses will pay a lower tax rate,” said Alibasic. He added that Habitat for Humanity has three more homes it wants to build in the NEZ.

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