Garfield Township To Consider Tax Break For Senior Housing Project

Garfield Township trustees will consider approving a tax break for the first phase of a planned 383-unit senior living development on LaFranier Road at their 6pm meeting tonight (Tuesday) at Garfield Township Hall.

Reenders Inc. is working to develop a new senior living community called The Village at LaFranier Woods on 34 acres just south of the Grand Traverse County governmental complex on LaFranier Road. The first phase of campus construction calls for a 115-unit, three-story “senior congregate care building” and 12 single-story senior cottages with attached garages. Congregate developments are targeted toward “low-to-moderate income” seniors, according to Reenders, and include amenities and services such as handicap-specific units, common areas for socializing, laundry, housekeeping, and one meal per day.

Rental rates for the first 115 units would vary depending on income level, from as low as $635 per month for a one-bedroom unit for a senior at or below 50 percent of the area median income level to $1,800 per month for a market-rate, two-bedroom unit with no income restrictions. Fifty-one of the units, nearly half, will be in the $703-$935 range, depending on unit size.

Later phases of development will bring a mix of housing to the site totaling 383 units: 230 congregate care units, 40 senior cottages, and 113 assisted-living units. Heads of household in the senior village are required to be over 55, while all other family members must be 50 or older.

Reenders is seeking a payment-in-lieu-of-taxes (PILOT) agreement with Garfield Township, a deal that allows a developer to forego paying traditional property taxes and instead pay a percentage of rental income in exchange for building affordable housing. Reenders plans to seek a four percent PILOT with Garfield Township, which would generate approximate $68,000 in taxes, project documents show. The company has a similar deal in place for its 120 units at The Village at Bay Ridge, another senior community in Garfield Township near the Grand Traverse Bay YMCA.

Reenders says with a PILOT agreement in place, the company would seek Michigan State Housing Development Authority (MSHDA) Gap Financing along with other state and federal funds to build the senior housing complex.  The company hopes to obtain funding approval from MSHDA in August and start construction on phase one this fall. In a memo to township trustees, Shirley Woodruff of Reenders wrote that because the congregate building would have a mix of incomes and rental rates, the PILOT would “produce a much larger payment than a similar 100 percent low-income development.” Woodruff also said that the senior cottages and assisted-living units at The Village at LaFranier Woods would be traditionally financed, and thus pay normal property taxes. “This helps to generate a substantial tax base that we predict (will) yield an overall similar tax amount as recent market-rate developments in the area,” Woodruff said.

Reenders and sister company Heritage Property Management have built and managed 30 senior housing properties totaling 2,919 rental units – many of them with MSHDA funding – since 1960, according to project documents. The companies have also developed 18 assisted-living developments featuring 1,284 units, including Bay Ridge Assisted Living. “The Bay Ridge community has maintained a high level of occupancy over the years and, coupled with the area’s draw as a retirement destination, we believe illustrates the demand for another senior living campus in the area,” Woodruff wrote.

Garfield Township Supervisor Chuck Korn tells The Ticker the township has approved numerous PILOT agreements historically for local housing complexes, including Brookside Commons, Aspen Hills, and Carson Square. Because Garfield Township and Traverse City both have ordinances in place allowing for PILOT projects, those two jurisdictions bear the brunt of funding most such affordable housing complexes in the region. “Other than the township and the city, there’s not much,” Korn says.

Korn says while township trustees have “been very open to them in the past, I think at this point it’s getting a little more sensitive because of the amount of PILOT projects we have.” He says the board tonight will likely weigh the community benefits of a development like The Village at LaFranier Woods against the costs to the township of the project.

“There are a number of things they can bring to the table,” Korn says, referring to developers’ options for increasing their odds of receiving PILOT approval. “Half of the project will not be a PILOT, it will be normal taxes, so that’s not as much of a burden from that point of view. There can be some kind of public services fee to cover police, fire, and ambulance (usage), because typically they tend to be higher users of that, so that can help. We’ve had developers include things like trails and dog parks and community parks.” Korn says he’s uncertain how township trustees will react to The Village at LaFranier Woods specifically, though the topic is likely to prompt robust discussion at tonight’s meeting.

“There’s a lot of information (about the project), and there are some strong feelings on both sides (of the PILOT discussion), so I really don’t know,” says Korn. “It’s going to be a board decision.”

Pictured: Conceptual artwork provided by Reenders for The Village at LaFranier Woods