945 Clark Rd.
Presentation by Developer on December 16, 2021
A request was made for an incentive for a payment in lieu of taxes for apartment developments on the north side of Ypsilanti. Lincoln Avenue Capital plans to construct a 306-unit complex at 945 Clark Rd. Public engagement on this topic is planned for December 16, at 7pm.
¬Over the past few months, the city has been working with the developer Lincoln Avenue Capital
from Minneapolis, MN. They are looking to develop a 306-unit complex at 945 Clark Rd. The unit break down would be 154 Family Affordable Units and 150 Senior Affordable Units. 90% of these 1, 2 and 3-bedroom units will be available at 60% Area Median Income (AMI) and 10% will be available at 40% AMI.
AMI is calculated based on Washtenaw County’s median income. For 1 person in Washtenaw County 100% AMI is $74,600 and a family of 4 is $106,500. We understand that this is a bit high based on the City of Ypsilanti American Community Survey Income Numbers ($39,332). The United States Housing and Urban Development (HUD) defines Affordable housing as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities. Calculating these numbers Washtenaw County’s affordable rents are as follows:
1 Bedroom $1,118
2 Bedroom $1,337
3 Bedroom $1,541
1 Bedroom $719
2 Bedroom $858
3 Bedroom $987
The developer is requesting a Payment In Lieu of Taxes (PILOT) at 5% of shelter rents. Shelter rents are defined as rents minus utilities. Working with the City assessor we have estimated the tax capture if no PILOT was granted to be $1,049,848. Estimated yearly rents are $4,406,556 so a 5% PILOT is $220,327.80. The annual difference between estimated taxes and a 5% PILOT is $829,520.39. The length of the PILOT is 30 years so the approximate incentive to be requested is $24,885,611.82.
While the city has offered PILOT’s at various percentages in the past, most recently the city awarded a PILOT to the Ypsilanti Housing Commission at 10 percent of shelter rents.
This incentive request has triggered the Community Benefits Ordinance process. The steps are as follows:
1. An interested council member needs to be appointed and serve a chair of the community participation meeting. This meeting will be noticed for 30 days. This meeting shall take place no earlier than 6pm.
2. At that meeting applications will be accepted for membership on that CBO committee. Applications will be available at the December 16th meeting.
3. Within 15 days of community participation meeting, City Council will need to appoint the committee with one city council member and 5-8 members of the public with at least three to be appointed from the community participation meeting.
4. The purpose of the meeting is to identify community benefits mutually agreed upon with the developer and make a recommendation with the developer.
5. The committee shall meet at least twice. City council shall act on the recommendation within 15 days of the recommendation.
Per the Community Benefits ordinance, city staff cannot negotiate the incentive requested prior to sending it through this process. It is our responsibility to gather information and submit that information to the Council and the public.