Detroit City Council Special Session

Detroit City Council

Development

Politics

Monday, Aug. 1, 2022
10:00 a.m. EDT

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A special session during recess to hold hearings and vote to approve the Fisher Body Plant loft development.

Meeting notice and agenda here: https://content.govdelivery.com/attachments/MIDETROIT/2022/07/28/file_attachments/2230414/0100_001.pdf

Join City Council Zoom Meeting: https://detroitmi.gov/Online-CC-Meeting

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Reporting

Edited and summarized by the Detroit - MI Documenters Team

Note-taking by Maxine Mickens

Brownfield, OPRA tax incentives for Fisher 21 project approved; marijuana petition sent to Election Commission

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Live reporting by Kayleigh Lickliter

Brownfield, OPRA tax incentives for Fisher 21 project approved; marijuana petition sent to Election Commission

Kayleigh Lickliter @kayleighrenel

Good morning, Detroit!☀️

I’ll be live-tweeting the Detroit City Council Special Session meeting today at 10:00am for #DETdocumenters.

@media_outlier @BridgeDet313 @PlanetDetroit @freep @wdet @Detour_Detroit @metrotimes @chalkbeatDET @DetDocumenters

08:49 AM Aug 1, 2022 CDT

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Agenda: bit.ly/3cL4z06

Note: you can access relevant documents by clicking the 📎 icon next to each agenda item

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The public can access City Council’s calendar, links to join meetings virtually and watch previous meetings on City Council’s website.

Watch today’s meeting live on Channel 10: detroit-vod.cablecast.tv/CablecastPubli…

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8 of the 9 agenda items are tax abatement related requests for the Fisher Body Plant redevelopment which includes four public hearings.

The last item is related to a citizen’s petition initiative related to the adult-use marijuana establishments ordinance.

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City Council approved the community benefits agreement last week. You can read more about the agreement here:

bridgedetroit.com/fisher-body-pl…

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The meeting is called to order at 10:02am! 🎉 https://t.co/7UnKwRQoaR

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🚨Kicking the meeting off with general public comment. 2 in-person participants, 7 are virtual.

1. Discussed issues they've had with DDOT's service after 6:00pm. He's been late to work several times because of unreliable service. Also has concerns about the cleanliness of buses

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2. Spoke about his civic engagement efforts in which he's encouraged the public to participate in DDOT meetings and City Council. He will also be giving FREE rides to the polls on Election Day. https://t.co/2ZC047gUXR

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2 (cont'd) Those interested in getting a ride to their precinct can call Mr. Cunningham at 313-444-9114 or reach out to him on Facebook
facebook.com/profile.php?id…

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3. Disappointed in the council members that voted in favor of the $60M tax abatement for Dan Gilbert's Hudson site development. They'd like to see the Mayor's wife more present in the community or city as a whole as the First Lady.

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3 (cont'd) Requested a report on how the Make Your Date program has helped childbirth outcomes and mortality rates.

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4. Responded to Council member Mary Waters' remark during last week's formal session meeting that council members don't "sell their souls" to developers. She referenced various corruption cases where she feels they've sold their soul.

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5. Wants to know whose in charge of rodent control at the Detroit People's Food Co-Op Development. Said rodents have migrated to residential properties. Regarding the Fisher Body site, she said the building isn't boarded up.

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5. (cont'd) Asked where and when the 7 amendments for the Hudson site agreement were negotiated and why they couldn't go through the proper Commitee process.

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6. Feels the community benefits agreement should include various environmental protections including daily air quality monitoring. Called on the developer to restore the environmental protections previously agreed to w/ the Neighborhood Advisory Council

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7. Said they would like to "officially complain" about the lack of available COVID resources for individuals w/o a vehicle. The way it's set up now, individuals who rely on public transit can't access COVID testing services. Finds the organization to be discriminatory.

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7. (cont'd) also feels the response to monkeypox outbreak to be insufficient and thinks there needs to be public education campaigns to avoid stigma and misinformation

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Sheffield said her office will reach out to him to get more information from him.

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8. Echoed earlier concerns about the Fisher Body Plant environmental protections being reinstated as originally agreed to with the community. Noted that they received a document that had 95 pages of toxic materials that had to be removed from the building

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9. Thinks the Fisher Body plant tax abatements would be "morally reprehensible and extremely disturbing". Doesn't think the project helps Detroiters. "How is this addressing the housing crisis...?"

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And that ends public comment, up next are the four public hearings.

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The 10:05am discussion was closed out without discussion because no taxing authorities were present to speak on it.

Read the plan here: bit.ly/3zOWtws https://t.co/clHKZMzUIX

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10:10am public hearing is opened. The item description is essentially the same with added information about the project, not sure what's different between the two). https://t.co/Dybj8CD7L0

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Brian Vosburg is walking us through a PowerPoint.

This graph represents the exact projections that the Fisher Brownfield Plan is expecting in TIF captures which is used to reimbursed developers for costs incurred through the redevelopment https://t.co/TtylKqPW8g

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The developer will pay a small amount of taxes for the duration of the TIF captures. As other tax abatements expire, taxes will start to increase (depicted in blue). Yellow represents what the developer will be reimbursed.

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The requested Brownfield Plan is for 35 years. After 35 years, taxes will be approximately $2.5 million.

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Some of the costs that are reimbursed through the plan are demolition, abatement, site preparation, infrastructure improvements, and more.

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The property is eligible because it was determined to be contaminated.

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The rest of the PowerPoint was photos of the property currently and renderings of the redevelopment project plans. https://t.co/l64asKV10j

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Nicole Sherard-Freeman, Group Executive for Jobs, Economy and Detroit at Work, spoke in support of the project. She said it's not just about converting industrial into housing or the investment, it's also about the skills trades and Detroiters.

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Sherard-Freeman said the developer has made a commitment to work with Detroit at Work to provide Detroiters work opportunities to acquire skills and experience.

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Anica Jackson, member of the development team, provided more details about the project. The way they put it together was to use Detroit-based businesses and small "mom and pop" businesses to help them grow the size and skill of their businesses.

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They're also working in coalition with Detroit Public Schools.

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Richard Hosey also spoke about the project. To address barriers that small, local contractors face with the cost to be on a project of this size, Hosey said they are making sure they can either reduce, remove or support their bonds.

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Hosey said that local contractors will gain experience and build their resume by working on a project of this size.

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They anticipate 80 full time jobs and 425 temporary construction jobs will be created through this project.

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The developer is requesting a $24.8 million TIF reimbursement with the overall value of the plan being $31.3 million.

The estimated investment for the project as a whole is $137 million.

The developer is also seeking NEZ and OPRA abatements which we'll hear more about next.

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Public Comments for the Brownfield Plan 🚨There are 3 participants today.

1. Said this is an inside job because the city didn't issue an RFP for the property. Said the reason the property is longstanding blight is because the city never bothered to board it up.

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2. Think there isn't enough affordable housing int he project. Said they want residents housed, not luxury apartments.

3. Lowered their hand

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The 10:10 public hearing for the Brownfield Plan is now closed.

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➡️10:15 public hearing to approve the establishment of a Neighborhood Enterprise Zone

Note: the links to related documents for this item aren't working for me.

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Council member Johnson was interested in the affordable housing aspect of the project. She said the original proposal was 20% of units at 80% AMI offering 3 two-bedroom units at 50% AMI and 60 studio, one- and two-bedroom units at 80% AMI.

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David Laurence Howell, Senior Director of Real Estate for DEGC, has a PowerPoint presentation that encompasses both the OPRA and NEZ Certificates.

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The NEZ provides a reduction on the future increase in property taxes that are a result of significant improvements. Qualifying properties, including new construction and renovations are exempt from property taxes for up to 15 years. For historic buildings, it's up to 17 years.

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Once improvements are complete, the incentive reduces the taxes paid on the property by 100% for 12 years. In the last 3-5 years, the abatement is phased out returning them to normal rates.

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(I know it's blurry but bare with us!)

Black = current property taxes
Yellow = taxes captures by the TIF
Green = taxes abated by OPRA abatement
Blue = taxes abated as a result of the NEZ https://t.co/i2vsNnvHnK

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In later years (on the right side), the gold represents the amount of taxes paid. The yellow represents the taxes that will be reimbursed to the developer.

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The "But For" analysis explains how the property would not proceed if not for the tax abatement. DEGC looks at the financing cap and how it would be mitigated.

There's a $41 million gap in the capital sources which Howell said is consistent with the market. https://t.co/hlA2aR870c

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Howell said DEGC will sometimes work with the developer to help them through the process of securing some of the money to fill the financing gap, such as federal loans and grants

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DEGC will then ensure there's a reasonable plan to mitigate the financing gap by reviewing debt coverage ratio and 3 other metrics.

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Councilmember Waters asked what would happen to affordable housing opportunities without the subsidies.

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Richard Hosey referenced a website that provides data about the AMI for the city. According to the data, 48,000 current Detroit households can afford the 80% AMI one-bedroom units and 28,000 can afford two-bedroom at 80% AMI.

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Regarding comments about these projects welcoming outsiders, the developer referred to units they own in Lafayette Park and 90% of those on the waiting list are Detroit residents.

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Ms. Sherard-Freeman interrupted the affordability conversation and said it's difficult to have this conversation without talking about the labor market. She said there's about 230K unemployed Detroiters right now. With this project, they're looking at $18-20 starting wages

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Sherard-Freeman said they have to be sure there's affordable housing but also that Detroiters are being prepared for the opportunities to earn an income so they can actually afford both affordable and market rate housing.

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Sherard-Freeman said she wants the public to know that there's strategies happening behind the scenes with the administration and Council's leadership. 👀👀👀👀

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Council member Benson said he wants to highlight the growth of the city's tax base and how this development can achieve that.

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Benson said they don't hear/talk about the fact that mayors and legislators in the suburbs brag about how their tax base is being paid for by expatriate Detroiters.

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Benson spoke in support of mixed-income developments to support residents. Using someone's increase in income as an example, building market rate housing today ensures they're able to find market rate housing right here in Detroit later when it does become affordable to them

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Public comments for the 10:15 public hearing 🚨

1. Encouraged more creativity for the project.

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2. Lifelong Detroiter, retired teacher. Looks forward to the opportunity to live somewhere like this project. Said the project seems like a good deal based on retaining residents and growing the tax base

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3. Asked Council to look at all the costs and burden on residents in these developments and tax incentives. Also asked them to consider the non-monetary cost of traffic.

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4. Said the whole housing process needs to be re-examined otherwise the city is going to have a greater homeless population.

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5. Spoke again about the possibility of posting RFPs for properties like this. Regarding hazardous materials, she referenced reports about the city ordering a demo contractor to replace backfill dirt. Noted Mr. Hosey's appointments to various boards.

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6. Reiterated that there's not enough housing for the vast majority of Detroiters. Compared the project to those in Bloomfield Hills

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And that closes out the 10:15am public hearing!

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➡️10:20am public hearing is for the OPRA tax abatement

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The developer doesn't have any additional information to provide so they jumped right into public comments🚨

There were 3 comments, and they echoed the same comments that have been made throughout the meeting.

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Skipping ahead to stay on top the meeting 💃

Items 6 and 8 were approved. These resolutions approve the Brownfield Redevelopment Plan and the OPRA tax abatement.

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Line item 7 was moved to the September 27th agenda. Per state law, a public hearing cannot be approved by the local governing body for 60 days after it's approved by the state tax commission.

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Now discussing line item 9. This is a resolution forwarding a citizen's initiative that proposes to amend the Adult-Use Marijuana Establishments ordinance to the Detroit Elections Commission for consideration.

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There's some confusion about why they're even forwarding it to the Election Commission and some that is cautious to not move in such a way that permits the ballot initiative to be placed on the ballot.

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Very confusing discussion so far.

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Councilmember Benson and President Sheffield have reiterated that their vote to refer the matter to the Detroit Elections Commission, it doesn't support an outcome one way or another.

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Councilmember Young has made it very clear that he doesn't think the matter belongs on Council's table for a vote.

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Conrad Mallett, Corporation Counsel, explained that the city charter states that City Council forwards the initiative or referendum onto the election commission who then makes a determination as to whether it can be placed on the ballot.

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Young responded and said he feels like the process itself injects politics into a space that politics doesn’t belong.

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The resolution forwarding it on to the election commission was unanimously approved.

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With nothing further on the agenda, the meeting was adjourned at 12:32pm.

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This concludes the Detroit City Council Special Session meeting on August 1st, 2022.

For more meeting coverage, check out documenters.org 🎉

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Agency Information

Detroit City Council

www.detroitmi.gov

See Documenters reporting

The Detroit City Council is the legislative body of Detroit, Michigan, United States. The Council is responsible for the creation of local laws—called ordinances. Additionally they pass resolutions, motions, and the proposed city budget. The full-time council is required to meet every business day for at least 10 months of the year, with at least eight of these meetings occurring at a location besides city hall. The council may convene for special meetings at the call of the mayor or at least four members of council. Areas of responsibility for the Budget, Finance and Audit Committee include, Budget, Finance and the Auditor General.

City Council members are elected on the same cycle as the Mayor and will be elected in 2021. Seven members represent the seven council districts, while two members are elected at-large.