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Posted on Thu, May 5, 2011 : 5:59 a.m.

Washtenaw County commissioners hesitant to approve financing plan for Packard Square project

By Ryan J. Stanton

Washtenaw County commissioners expressed hesitations Wednesday night about helping to finance the redevelopment of the former Georgetown Mall site in Ann Arbor.

While the county isn't expected to directly contribute any money to the nearly $50 million project known as Packard Square, it is being asked to approve a tax-increment financing plan that would forestall realization of any new taxes from the development for 14 years.

The 14-year TIF capture, included in a brownfield plan for the project, was approved by the Ann Arbor City Council on Monday and now needs sign-off from the county.

At issue Wednesday night was whether the county should move forward with applying for $2 million in state grants and loans for Packard Square, a four-story, mixed-use building containing 230 apartment units and 23,790 square feet of retail space.

A proposal brought forward by county staff asks the county board to authorize an application for a $1 million grant and a $1 million loan from the state for the project. The loan would be backed with the full faith and credit of the county, which led some commissioners to express concerns that the county might be left with debt obligations if the project isn't successful.


Wesley Prater

Citing the financial implications, Commissioner Wesley Prater, D-York Township, asked at the start of Wednesday night's Ways and Means Committee discussion to table the issue so it could be discussed at a future working session.

That caused some debate, but the board ultimately voted 6-5 to have it discussed in more detail at 6:30 p.m. tonight when the board meets for its next working session.

The developer of Packard Square is counting on the grant and loan money from the Michigan Department of Natural Resources and Environment to assist with environmental cleanup activities deemed necessary to prepare the site for a redevelopment.

The Ann Arbor City Council earlier this week approved a brownfield plan for the project that includes tax-increment financing of $5.8 million over a period of 14 years. TIF funds will be used to reimburse the developer for eligible costs and to repay the $1 million loan from the state.

A brownfield property is one in which site conditions present an obstacle to redevelopment. In Michigan, that can include properties that are environmentally contaminated, blighted or functionally obsolete, and the developer of Packard Square claims all three conditions exist.

Through tax-increment financing, no existing taxes are abated. However, the incremental increases in tax revenues that result from improvements to a property are channeled back to the developer to help cover costs and provide an incentive for development.

It's expected that $410,000 in TIF revenue — $40,000 of which are county funds — would be captured in the first year after the project is complete. The TIF capture is projected to increase by about 2 percent annually, according to information from the county.

Brett Lenart, who oversees administration of the county's brownfield program, said the implication of not approving the grant and loan application is that the TIF capture period would have to be increased from 14 to 18 years to make up for the lost $2 million. If that were the case, he said the brownfield plan would need to be reworked and resubmitted to the city.

Commissioners were only expected to vote on the loan and grant application in committee on Wednesday. It still would move forward to the full board for a final vote on May 18. The county also would hold a public hearing on the brownfield plan on May 18 with a final vote on June 1.


Conan Smith

County Board Chairman Conan Smith, D-Ann Arbor, said he didn't support delaying the loan and grant application and said he'll try to move it through the full board on May 18.

"This particular issue is a revenue contract for a particular project," Smith said, adding it's been fully vetted by the county's brownfield committee and recommended by county staff. "And furthermore, it brings dollars in rather than spends dollars."

Commissioner Yousef Rabhi, D-Ann Arbor, agreed with Smith. In terms of impact on the budget, the county would not lose any tax dollars, he said.

"We're receiving a grant and we're receiving a loan," he said. "The tax capture from that site will remain constant over the TIF capture period. That's how TIFs work. We won't see an increase from the site for the TIF capture period, which is 14 years, after which time we'll receive the additional tax dollars that site generates."

Commissioner Rob Turner, R-Chelsea, said he wasn't convinced yet. He wanted assurances the project would be successful and the county wouldn't be on the hook financially.

"I'm going to have to have some real assurances, and this is going to take a long drawn-out discussion, to make sure that we have guarantees that this money is going to be paid," he said, adding he was involved with a similar development that went bankrupt and was left holding the bag. "What I don't want to have happen is this county being left holding the bag."

Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's e-mail newsletters.



Mon, May 9, 2011 : 6:09 a.m.

The developer is doing a "good" thing. Improving the property that is now a blight. Cleaning up the toxic waste sight and getting a little public funding to do this "dirty" deed. These public funds come from the "increased taxes from the improvements" and in the meanwhile the property taxes are being paid, the project benefits the community, the toxic chemicals are removed preventing contamination of ground water via seepage, and Wesley Prater is grandstanding and withholding approval? Unbelievable! Mr. Prater, we pay a little now or we pay much more later when the entire area becomes blighted, the property goes into foreclosure, home prices start deteriating further, and the area becomes a haven for the homeless and drug addicts. Folks like Prater are the reason Emergency Finance Managers have the power to negate the powers of elected and union officials. Thank the "Praters" of the world for the new EFM powers.


Sun, May 8, 2011 : 6:30 p.m.

The property is becoming a blight and the neighborhood will welcome the convenience, especially if a new grocery store is included. The project will likely never get started without some form of local government incentive. I agree that in return the developer should be compelled to employ a local workforce for construction.


Sun, May 8, 2011 : 4:17 a.m.

Commissioners had no problem implementing a property tax increase that circumvented the electorate using an antiquated law still on the books but now they want us to think their looking out for our best interest by leaving Georgetown vacant and polluted by a former dry cleaners. Approve the project you and stop acting like uneducated imbilciles.

Ashok Gopalakrishnan

Thu, May 5, 2011 : 7:35 p.m.

Is it fair to question the track record of this developer at taking on and successfully completing such large projects? Take a look at the Bloomfield Park development in Pontiac/Bloomfield Townships, where the Packard Square developer was the original developer. <a href="" rel='nofollow'></a> The developer may not be at fault here, but the fact remains that just around the time the Bloomfield Park project broke ground, they turned around and divested their interest in it to two companies in Ohio and New York respectively. What if they do the same thing with the Packard Square project? So what if they do, one might say, but then how do we know that the new developer will take the project to completion? Also, does it not bother anybody that the developer of Packard Square is also the owner of the property (albeit under a different company name), and has been the owner since 2001? During this time, the property basically went to seed. Plus, they owe around $300,000 in back property taxes to the city. What mechanism is in place to ensure that this money will be paid to the city? Now we find out that the county has to apply for a $1 million loan on behalf of this project, and back the loan with its full faith and credit. I am all for tax-increment financing and other &quot;sweeten-the-pot&quot; ideas, but in the end there has to be a measure of trust between the parties involved. I do hope the commissioners feel comfortable about agreeing to back the loan. If the project does not go through to completion, the taxpayers are going to be the losers. Maybe I am being overly pessimistic.

average joe

Thu, May 5, 2011 : 11:43 p.m.

Maybe the county could borrow some of the A2 attorneys on the city payroll &amp; make sure all of your valid concerns are covered in case of default issues. I didn't know our commisioners were qualified in the loan backing industry, &amp; they should not put my name, as my representative, on any document like this.

Georgetown Dad

Thu, May 5, 2011 : 5:41 p.m.

Can't. Stop. Commenting . . . the contamination is from the two dry-cleaning operations on the site. And, believe me, it's real.

Georgetown Dad

Thu, May 5, 2011 : 5:36 p.m.

Also, @Gramma, my understanding is that the businesses in the old Georgetown Mall did not &quot;fail&quot; per se. They were kind of forced to move by the landlord I believe, because he specifically wanted to re-develop so he was not renewing leases. In fact, Georgetown Gifts (Hallmark), Rite Aid, Anthony's Pizza (and maybe a couple I am missing) are still thriving today in their new locations. Sadly, after everyone else left, the Kroger just could not carry on with the lowered volume of visitors, and that is one store I will always miss.

Georgetown Dad

Thu, May 5, 2011 : 5:28 p.m.

To paraphrase a popular Nick Jr show, &quot;Go, Packard Square, Go!&quot;

Wolf's Bane

Thu, May 5, 2011 : 5:16 p.m.

Hey, Wesley Prater. Shut up!


Thu, May 5, 2011 : 4:53 p.m.

I do not want to subsidize ANY private investment of ANY kind.


Thu, May 5, 2011 : 3:40 p.m.

Conan Smith, Barbra Bergman, Ken Schwartz, and Jessica Ping still owe together close to $9,000.00 in improperly paid mileage and per diems. None has said the calculations are incorrect. I am flabbergasted that despite the issue being raised over and over again in the media and at commission meetings, we still have this arrearage. I am appalled that Commission Chairman Conan Smith can discuss spending huge amounts of taxpayers' monies on projects like this when he will not reimburse the county for monies he owes.


Thu, May 5, 2011 : 2:32 p.m.

Hey Conan, When are you going to give back your improper per diems? Inquiring minds...

John Q

Thu, May 5, 2011 : 2:05 p.m.

Tax breaks and tax subsidies for private businesses. Another example of the &quot;free market&quot; at work.

Mr. Ed

Thu, May 5, 2011 : 1:24 p.m.

Government subsidized tax breaks &quot;NO.&quot; We are giving businesses a big very big tax break under our new budget. No No NO

Vivienne Armentrout

Thu, May 5, 2011 : 1:01 p.m.

I understand why some commissioners are concerned. The county has gotten into trouble with full-faith-and-credit loans in the past. Sylvan Township comes to mind. The size of this commitment and the likely risk are much smaller than some of those past boondoggles. An additional factor for commissioners to consider is that this is likely the last year such state assistance will be available. I haven't followed up but it was my understanding that Gov. Snyder has eliminated brownfield tax credits in his budget.


Thu, May 5, 2011 : 12:54 p.m.

Georgetown was once a thriving, small shopping center that fit neighborhood needs. What changed all this? The reasons those businesses failed would have an impact on the projected likelihood that this new venture would be successful. Are there high vacancy rates in the neighboring apartment complexes? There are several of them in a small area. Where would there be parking for 250 cars for tenants plus patrons of the businesses? Are the apartments to be priced at a rate that could be paid by people in need of housing in A2? I don't remember any industrial bldgs on that site. Why would (or is) the ground contaminated? Many things to be considered.

Vivienne Armentrout

Thu, May 5, 2011 : 12:58 p.m.

There was a dry cleaning establishment there.

Unemployed Electrician

Thu, May 5, 2011 : 12:51 p.m.

We need assurrance that this out-of-town developer doesn't bring in out-of-town workers on this project. The local building trades are experiencing upwrds of 50% unemployment here and could use the jobs.

Craig Lounsbury

Thu, May 5, 2011 : 12:51 p.m.

I don't have a problem with the idea of giving a 14 year break on an increased tax rate. There is no out of pocket cost to &quot;we the people&quot; for that. But putting our name on loans and grants is not the same. That has out of pocket ramifications.


Thu, May 5, 2011 : 12:31 p.m.

Why not build this.. It would provide jobs &amp; you could collect taxes.


Thu, May 5, 2011 : 11:18 a.m.

I always find it inconcerting when a business plan is drawn up that seems only viable if there is some government subsidation. When the subsidation runs out....then what? The assumption is that it will be established and strong. Who can say what the business environment will be 14 years out? Or even two years out. I share the concern that the taxpayers are being committed for shaky reasons.

Floyd Griffey

Thu, May 5, 2011 : 10:28 a.m.

How much you want to bet ... The taxpayers will be left holding the bag. This plan won't work.