Farmington's Brownfield Redevelopment Authority reviewed a plan Friday, Aug. 28, to steer $8.8 million in tax increment financing toward a $34 million rehabilitation of Farmington Place, the 153-unit senior apartment building at 32900 Grand River Ave.
The Combined Brownfield Plan and Act 381 Work Plan, prepared by consultant Advanced Redevelopment Solutions, would capture property tax growth over 30 years to reimburse the developer for building upgrades. It is the first housing-related TIF request the authority has considered.
What the project involves
Farmington Place was built in 1980 and houses seniors 62 and older. Of its 153 units, 152 are income-restricted to households earning between 40% and 80% of Area Median Income (AMI) under a Land Use Restriction Agreement with the Michigan State Housing Development Authority (MSHDA). The building has 148 one-bedroom and five two-bedroom apartments across 122,924 square feet on a 3.87-acre site.
The building is deteriorating.
The BRA meeting packet identifies the property as functionally obsolete, citing outdated HVAC, electrical and plumbing systems, a deteriorated roof and windows, accessibility barriers, and aging parking lots and sidewalks.
Jonathan Rose Companies, a New York-based developer, is leading the rehabilitation through affiliated entities. Rose Community Management already manages the property.
Financing and TIF structure
The $34 million project draws on $10.4 million in federal tax credit equity, $21 million in tax-exempt bonds, a $2.6 million construction loan and $1 million in developer equity.
Without the TIF, the project faces a financing gap of roughly $1.6 million and cannot meet the 1.15 debt service coverage ratio its lender requires, according to the plan.
The TIF would capture the increase in property taxes above the current taxable value of $3,672,730 starting in 2028, when construction is expected to finish. Annual capture would begin at about $135,000 and grow to $558,000 by 2057. The maximum reimbursement to the developer totals $8,836,282, including $513,000 earmarked for the city.
The plan uses a pay-as-you-go structure. The developer pays all costs upfront and is reimbursed annually from captured increment. No bonds are issued by the city or BRA, and the developer bears the risk if tax revenues fall short.
Resident relocation
All 153 households will need to be temporarily relocated during construction. The plan includes notice requirements, moving expense reimbursement, replacement housing assistance, case management and priority return rights once work is complete.
How it got here
BRA Vice Chair Chris Weber, Farmington's assistant city manager, introduced the request at the authority's March 26 meeting. "This represents the first housing TIF request received by the Brownfield Development Authority," Weber said at that session.
The board held an on-site review at Farmington Place on April 29 with Chair Steve Schneemann and other members present.
Advanced Redevelopment Solutions concluded in the draft plan that the TIF represents the minimum public assistance needed to make the project feasible.
What's next
Friday's meeting at Farmington City Hall, 23600 Liberty St., was a review of the draft plan. No vote was confirmed as of publication. The next steps in the approval process were not specified in the plan. Construction is scheduled to start in 2026 and be completed by 2028.
