County Commissioners Approve PILOT Policy, Tax Break for Blair Township Housing Project

Grand Traverse County commissioners approved a new policy Wednesday that will guide how and when tax breaks are given to workforce housing developers under payment-in-lieu-of-taxes (PILOT) agreements. At the same meeting, commissioners approved their first tax break under the new policy for a housing project – a 192-unit workforce apartment complex called Corners Crossing set to break ground this spring off US-31 nears Chums Corner in Blair Township.

PILOT agreements incentivize construction of workforce and low-income housing by allowing developers to pay a defined percentage of net shelter rents instead of normal property taxes to the municipality where they’re located. The PILOT agreement remains in place for a certain number of years – often 15 – with the municipality splitting up the annual PILOT payment among the different taxing jurisdictions that would normally receive a share of property taxes.

Under recent legislative changes in Michigan, counties – like Grand Traverse County – can require property owners to make up the difference if the amount counties receive through a PILOT is less than the full amount of taxes they’d otherwise receive. Counties can also waive that requirement if they want to support the housing project. Commissioners Wednesday approved a new PILOT policy stating that Grand Traverse County will always default to collecting the additional amount unless developers meet four standards. Those include the developer filling out an application, providing PILOT request documents to the county at the same time they’re provided to the local municipality, and providing proof that the housing units will be the primary residence of tenants – not a second home or vacation home – and that short-term rentals will be banned in the project.

Commissioners debated the terms of the fourth condition, which relates to income levels for tenants. Some commissioners wanted to only offer tax abatements for projects that max out at 100 percent of the area median income (AMI) level. But the majority wanted to set that level at 120 percent AMI, noting that many local workers – like firefighters, teachers, and healthcare workers – earn wages up to 120 percent AMI and are also struggling to find housing. “The 80 to 120 (percent range) is like your middle child,” said Commissioner Penny Morris. “It doesn’t get the attention it needs.” Commissioner Darryl Nelson worried developers would take their housing projects to other communities if commissioners set the income level too low. “They’re not married to Grand Traverse County,” he said. “They’re married to the financial sheets.”

Commissioners voted 7-2 to approve the new PILOT policy with the tenant AMI level capped at 120 percent for developers to qualify for abatement. Commissioners TJ Andrews and Scott Sieffert – who supported a cap at 100 percent AMI – voted ‘no’ on the motion.

Immediately following the approval of the policy, commissioners took up the first formal request from a developer for abatement under the new terms. Wallick Communities is planning to break ground this spring on a 192-unit apartment complex called Corners Crossing in Blair Township near Chums Corner. The development group – the same one behind senior living community Meadow Valley on North Long Lake Road – received township approval last spring to build eight apartment buildings on just over 16 acres of vacant land north of Stone House Bread just west of Family Fare. The site is accessed by a private road – commonly called Prevo Road – off US-31. According to the site plan, the development will feature a mix of one, two, and three-bedroom apartments, as well as a nearly 4,000-square-foot community building. The community building will have a meeting room, kitchen area, two offices, a gym/fitness facility, and maintenance and storage areas.

County commissioners previously awarded $1.5 million in American Rescue Plan Act (ARPA) dollars toward the project. That grant, a Missing Middle Grant from the Michigan State Housing Development Authority (MSHDA), Blair Township’s PILOT agreement, and Grand Traverse County approval of additional abatement are all key pieces in the funding puzzle for a project whose estimated cost has grown from $31 million to $46 million, according to Wallick Communities Vice President Michael DiCarlantonio. In a letter to county administrators, he advocated for the economic benefits of the project – noting the land is empty now and generating “very little tax revenue,” with a “large increase in taxes from Corners Crossing” to come to the county once the 15-year PILOT expires – and said the goal was to break ground in 60 days on “housing that is of tremendous need in Grand Traverse County.”

County commissioners approved the abatement for Corners Crossing in a 6-3 vote, with Sieffert, Commissioner Brad Jewett, and Chair Rob Hentschel opposed. The approval means Grand Traverse County will waive just over $28,000 in additional annual taxes it could have otherwise collected from Wallick Communities. Most commissioners felt the development group met the four standards of the new PILOT policy: While an application hasn’t yet been created for developers to apply to Grand Traverse County for the waiver, Wallick Communities submitted all the relevant project details that would be required in that application, commissioners determined. Units will be targeted to tenants with 68 to 93 percent AMI, with rents ranging from approximately $1,123 for a one-bedroom unit to $2,140 for a three-bedroom unit, according to project documents.