There's nothing quite like climbing westward over the Broadway St. bridge and approaching the entrance to Kerrytown. Though it's a dash of daily romance for many Ann Arborites, the idyll has long been tarnished by a rather homely property at the edge of the quaint neighborhood. For thirty years, as Kerrytown has flourished around it, the thin, triangular parcel of land between Broadway and N. Division has sat empty, save a small, boarded up structure.
With downtown property values at a premium – especially in Kerrytown – the question of how a vacant lot could have sat undeveloped for so long is a good one, and the answer has something to do with that sad-looking building. It was a former gas station.
"The gas station closed in 1984 and nothing has happened there for a reason," says Nathan Voght, coordinator of
Washtenaw County's Brownfield Redevelopment Program. "In this case, there is a deep core of petroleum contamination. It's a small site that's difficult to develop, so the environmental costs are a larger burden, proportionally."
The gravel lot at 544 Detroit St. is far from the only property in Washtenaw County left in a development pickle by contamination. Many of these sites are in urban areas, where local governments have a vested interested in encouraging development, rather than projects on previously undeveloped land that require new utilities, create sprawl and increase traffic. That's why Michigan became a national leader with the 1996 Brownfield Redevelopment Financing Act, Public Act, which creates incentives for developers to invest in contaminated sites.
"The whole intention of the brownfield legislation is to level the playing field between greenfield development and brownfield development," says Voght. "It's more efficient, and it's a cheaper cost to the community in the long run to develop site that are already in an urbanized area. It's smart growth."
The program works this way: a local government offers to pick up the cost of cleaning up a contaminated site for developers, the cost of which is paid for by the temporary capture of the increasing portion of the property tax after the property is improved. And it's not just the funding incentive that is attractive to the developers, but also the fact that the local government cleans up the site to its own standards, and then takes on the liability for the results.
"You don't want to be liable," say Dan Williams of Maven Development. "It's a big exposure. And most banks aren't going to want to finance something like that."
Thanks to the Brownfield Program, Williams has been able to take on the estimated $1.5 million redevelopment of
544 Detroit St. anyway. The three-story, flatiron building will include two condos, first floor office space, and a Kerrytown-appropriate facade. Without the cleanup costs of $698,773 being reimbursed by the future brownfield tax capture, not to mention government absorbing the liability, Williams simply couldn't make enough revenue from the property to make it a sound investment.
"Without the brownfield support on a project like this, it isn't a viable project," says Williams.
Brownfield redevelopment is important to local government for economic reasons, but also because of the positive community impact the projects can make.
The recent opening of the
Dexter Wellness Center on Baker Rd. marked a new chapter for property once occupied by a hazardous warehouse facility less than half a mile from the center of downtown. Now, the new $9 million, 48,000-square foot building has created upwards of 70 jobs in its place.
"You are adding vibrancy and beautification to the village," says Voght. It turns a negative into a positive."
With the major portion of the multi-phase development having just opened in June of this year, Dexter Wellness is already abuzz with classes, training, programs and activities – a far cry from the contaminated, industrial site that once stood in its place.
The carrot of brownfield incentives also allows local units of government to encourage developers to include elements into their projects that will benefit the future environmental health of the site and community. The project now underway at
618 S. Main, for example, will include 156 apartment units within walking distance of downtown, underground parking, on-site storm water management and rain gardens.
"It's about leveling the playing field," Voght says. "There is an extra cost to developing projects in dense areas. We like low impact design, so we are going to support those extra costs."
With a $37.5 million project, extra help is undoubtedly a good thing. The Michigan Economic Development Corp. and the Ann Arbor Downtown Development Authority are contributing incentives to the project as well. And with every public entity that is involved with a development project, Voght says, that more public benefit is expected from the end result.
Not that everyone has a positive view of getting any public entities involved in projects. Some developers see government incentives as a mess of red tape and cumbersome bureaucracy. The way Williams sees it, however, is with brownfield projects in particular, there's no better way to get a development off the ground.
"Maybe it's added a little bit of time to the approval process," he says, "but you have to understand, if the site is contaminated, the project isn't viable without it. Working with the county has actually been a smooth process."
That process is about to bear some fruit. Work on 544 Detroit St. is expected to begin in the next 45 to 60 days. By Sept. of next year he expects Maven Development to be moving in to the first-floor commercial space of the flatiron building that will be the new gateway to Kerrytown.
The reach of Washtenaw County's Brownfield Redevelopment program is evident from the Saline to Ypsilanti to Ann Arbor's forthcoming Packard Square. With an estimated 300 brownfield redevelopment projects completed in Michigan in its first 20 years generating
$4.2 billion in private investment and 23,000 jobs, the program is certainly making its case as an asset to the state. And with recently re-approved brownfield legislation, and tens of thousands of contaminated sites left to go, it doesn't show any signs of slowing any day soon. For communities with polluted, unkempt holes in their cityscapes as Kerrytown does and Dexter so recently did, that equals hope for a greener, more vibrant future.
Natalie Burg is a freelance writer, the development news editor for Concentrate and Capital Gains, and a regular contributor to Metromode.
All photos by Doug Coombe
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