Kasson Township finds itself in a unique and powerful position in the increasingly stormy workforce housing conversation in the county. New talks about a potential Brownfield plan at the current Maple City Crossings development continue tomorrow at the regular township board meeting. The topic at hand is using Tax Increment Financing (TIF) funding to assist Habitat for Humanity with eligible expenses for the six-house project already underway at the corner of Maple Street and Western Avenue in Maple City.

Once the homes are on the tax roll, a portion of taxes paid in over 30 years by the new homeowners would be captured to reimburse Habitat for Humanity (Habitat), which has a large gap between construction costs and the affordable cost that will be charged to the future owners.

Trudy Galla, planning director for Leelanau County and director for its Brownfield Redevelopment Authority, helped present the plan to Kasson Township. She explains, “One of the eligible expenses could be to help offset the ‘gap’ that Habitat will have between the appraised value of the homes and the mortgage that homeowners can afford.”

What kind of gap? The Maple City homes are estimated to appraise at $286,000, with Habitat for Humanity offering them at an estimated affordable mortgage of $165,000.

Wendy Irvin, executive director for Habitat for Humanity Grand Traverse shares that as developers, “We are working with three costs: the cost to be affordable for the family, the cost to build, and the cost it appraises. That presents a big challenge for us,” noting, “At minimum we must raise enough to overcome our construction costs, which have risen 40 percent since last year.”

Galla says it's the first time a capture of TIF funds to help offset the cost gap for a housing development has been proposed in the county. She explains that the Land Bank’s ownership of the parcel, with a development agreement in place with Habitat, “opens the possibility to use a Brownfield plan, and collect the Tax Increment Financing (TIF).”

Kasson Township is being asked to divert 30 years of taxes to the Brownfield plan, based on the appraised value of the six houses. The property taxes affected: the township-allocated taxes, those allocated to the fire department and those allocated to the Glen Lake Community Library.

If Kasson Township says yes? Says Irvin, “Kasson Township’s approval and participation allows me to also ask for a portion of TIF dollars from the county.” That combined guaranteed tax capture “will contribute a meaningful percent of my total budget,” allowing her to go to a local lender and turn that into capital which can then be invested in the project.

She says Habitat is leveraging lending, sweat equity from the homeowners, and philanthropic gifts to fund the Maple Crossings Project, which has a total price tag of $1.6 million.

She has almost $700,000 still outstanding.

Jeff Hawkins of Envirologic, Inc. is under contract with the Leelanau County Brownfield Redevelopment Authority to draft the Maple City Crossings Brownfield plan and projected TIF funding.

The original TIF proposal was for an estimated $80,000 in captured taxes from Kasson Township over 30 years, allotted annually. Leelanau County’s portion of estimated captured taxes was to be $200,000, also over 30 years.

Funding from Leelanau County depends on funding from Kasson Township. If the township says no? “The county will not act on this unless the township approves it,” Galla says. 

There has been initial pushback from members of the Kasson Township board at the June and July meetings; but a motion to deny the TIF funds outright failed, with most board members wanting more conversation.

Township board members Dana Boomer, Tad Carter, and Roger Noonan have concerns regarding the proposal, especially the loss of funding to the township and fire department. Noonan stated, “all of the taxpayers in the township are subsidizing this plan, if it goes forward.” 

With the foundation of one of the duplexes visibly underway at the Maple City Crossings homesite, there is also the question: Why is Habitat asking for any type of commitment now?

Simply put, says Irvin, they only recently learned about this creative financing tool for residential developments at a Leelanau County Land Bank Authority-sponsored presentation from the State, demonstrating ways to address the workforce housing crises.

Without the boost of township and county TIF funds, “It might delay the project,” she says. “We fund a house at a time, and we have families waiting.”

Galla says other townships and landowners could pursue this method of funding. “Kasson Township has the ability to be the leader with this project, setting the example for other communities," she says. "If each township and village had one of these developments with 6-12 units each, the workforce housing could increase by 84–168 units.”

Among the voices supporting the Brownfield plan at the July meeting: Suttons Bay’s Lois Bahle. She noted, “The combination of land costs, labor and material costs and shortage of contractors make it impossible to simply build homes for this market. Habitat has the tools to put together a package of low interest funding and philanthropic funding and is asking for the township to participate in making this project move forward. It takes involvement from all sources to make it possible to provide housing for families in your community. Perhaps some will be your relatives.”

Britny Schwartz, a Maple City homeowner, spoke up in support of Habitat’s request: “My sons and I have been Kasson Township residents since we closed on our home on Olivia Drive in January. I am a Habitat homeowner. My children transferred to Glen Lake schools from TCAPS in February, my oldest son is counting down the days until he turns 14 so he can get a job at Pegtown. We have visited the golf course, the curling club, purchased Lavender plants from Bohemian, we get our eggs from the farm stand just down the road. I was saddened by lack of support from your board and members of the community who chose to speak. I would urge you to embrace this unique idea and think of the benefits you’ll gain from having these new families as members of our community.” 

Board member Dana Boomer asked for a refined TIF proposal that considers splitting the millage funding, which Hawkins will present tomorrow night.

Hawkins says that the revised plan will show an 80/20 split, applied across all of the affected millages. “Eighty percent of the new taxes generated from the houses will go to the Brownfield plan to be applied against eligible costs. And 20 percent will go to the tax jurisdiction as they normally would.”

Township Supervisor Greg Julian says welcoming the conversation to the table “was the responsible thing to do” and, of the new split proposal, “it may be more palatable” to those concerned about “pulling tax dollars away from where they are already allocated within the township budget.” He adds that a 30-year-plan is a major commitment for any governing board to make, and he has looked to county commissioners for their stance. “They have been somewhat supportive, but they are not weighing in…until we make our decision.”

Galla notes, “Yes, taxing jurisdictions will not capture the increased taxes until the Brownfield plan ends, but there are other benefits realized from the new housing: We need workers, kids in our schools, teenagers and adults to work jobs, as well as residents to serve on school boards, and local and county boards and commissions.”

It’s a lofty conversation, adds Irvin. “We are the first organization to make this request in our region; Sometimes it’s not the best to be the first in…we hope Kasson joins us and is willing to allow capturing of future property taxes for an investment in the county right now.”

Galla says that no matter what the Kasson Township board decides, “Communities and elected and appointed officials in the county have expressed support for housing for many years but we are past that point. We need many partners from many different areas to come together and make these housing units a reality.”

Pictured: A Maple City Crossings unit in progress by Tom Kachadurian