LANSING, Mich. — The Lansing City Council approved tax breaks for three affordable housing developments around the city Monday night, including a senior apartment complex that will go into the former West Junior High building.
“I’m very excited to see us utilizing and supporting affordable housing,” said Councilwoman Kathie Dunbar.
The deals are payment in lieu of taxes agreements, also known as PILOTs. In this case, all three developers have promised to rehab the properties in question.
Members of Council say they’re pushing for more affordable housing in the city.
“We need to have clean, affordable housing, and this is a very good tool in order to have that done,” said Councilwoman Patrica Spitzley.
The first property that got a tax break was the Lansing former West Junior High on Lenawee Street near downtown. General Capital Group is planning to buy the building and convert it into 75 affordable housing units for seniors. General Capital Group got a 4 percent PILOT for 40 years, and will pay the city around $24,000 a year as opposed to the $95,000 they would have paid if the tax break wasn’t granted.
“A PILOT really is an agreement between the city and the developer basically saying they’re going to rehab the location and make it clean and affordable for residents,” Spitzley said.
Next up is Cedar Place on Jolly Road. Jonathon Rose Company bought the location in 2017, and with the 4 percent PILOT for 40 years, This means the owner will be paying the city just over $64,000 each year, instead of $115,000. The company plans to use $8.5 million to renovate the building into clean ,affordable housing for low income residents.
Last location that got a PILOT was the former Walter French Junior High at the corner of Mt. Hope Avenue and Cedar Street. The Capital Area Housing Partnership is hoping to turn the location into 76 affordable units for low income and moderate families.
Capital Area Housing received a 6 percent PILOT for 20 years. With the agreement, they would pay the city almost $25,000 a year. The Capital Area Housing Partnership doesn’t have an immediate estimate of how much they would be paying without the pilot.
“In the case of low-income housing, we need to make it possible to build quality housing to rehabilitate housing and allow folks to stay there at a rent that is affordable,” Dunbar said.
Originally, the Porter Apartments was up for a similar agreement, but since the owner, Redwood Housing, did not agree to sign a prevailing wage agreement, their request was pulled from Monday’s Council agenda.
“Each application is required to sign a statement saying that they would basically agree to prevailing wages for the construction and reconstruction staff,” Spitzley said.
As of right now, the Porter Apartments has a pilot from its previous owners, which is set to expire next year. City Council is giving Redwood housing a little extra time to think about signing the prevailing agreement. If it’s not signed, they would have to pay the well over $90,000 every year as opposed to the $47,000 with the tax break.