Newaygo Residential Development Makes New Use of Brownfield Incentives
Grand Rapids, Michigan, November 10, 2020-- North River Hills LLC, Newaygo County, and the Michigan Land Bank Authority just closed the deal on a first-of-its-kind use of brownfield incentives to support construction of 20 new homes in the city of Newaygo. The Newaygo County Commission gave its unanimous support Tuesday morning to incentives to help pay for infrastructure and site preparation costs at Phase II of River Hills Estates, a new neighborhood of market rate homes in the City of Newaygo.
“Homes in River Hills Estates are designed to be affordable for ‘missing middle’ home buyers who may be moving out of multi-family housing or a small first home into a larger family home,” said Newaygo County Administrator Christopher Wren. “The incentives will be passed along to home buyers by keeping overhead costs low. Maintaining home affordability helps Newaygo County residents.”
Brownfield incentives have helped reduce development costs for contaminated and blighted property since the 1990s. Michigan law says that property that’s contaminated, blighted, functionally obsolete, historic, or owned by a county or state land bank qualifies for brownfield incentives. Incentives can be used to pay for demolition, lead and asbestos abatement, environmental costs, and in some cases for infrastructure and site preparation.
North River Hills and Sable Homes took over the first phase of River Hills Estates in 2017 after it remained unfinished for 15 years. At that time, four homes had been built in the phase designed for 31 homes. Sable was able to revitalize River Hills Estates and finished construction of new homes on the remaining 27 lots earlier this year.
“We are fortunate to have Sable Homes and North River Hills invest in our neighborhood growth and sustainability with this new project,” Newaygo City Manager Jon Schneider said. "We look forward to seeing the progress of the second phase of River Hills Estates take shape.”
Sable and North River Hills expect a complete land and home package to range from $190,000 to $250,000 in the second phase.
“Through our experience in the last three years, we know there is a continued need for new home construction in the Newaygo community,” said Karin Kay, Sable Homes’ sales manager. “With groundbreaking for the first homes expected early next year, this collaborative public and private partnership is central to allowing the end user to realize homeownership while increasing the community’s stock of workforce housing.”
This project is novel because the property was intentionally conveyed to the Michigan Land Bank Authority to become eligible for the incentives. “We could not sell home lots for a high enough price to cover site preparation and infrastructure, so Home Builders Association CEO Bob Filka suggested reaching out to the Michigan Land Bank Authority,” said North River Hills president John Bitely. “With the Land Bank’s help and support from the Newaygo County Brownfield Redevelopment Authority, we’re using brownfield incentives for the funding gap.” After a few months, the state will return the property to North River Hills.
North River Hills will be reimbursed from the development’s increased property taxes for infrastructure and site preparation costs under a brownfield plan amendment written by Fishbeck and approved by the city of Newaygo, the Newaygo County Brownfield Redevelopment Authority, and Newaygo County. The city, county, and state will still be paid taxes at the pre-development rate until North River Hills is reimbursed, and the county will collect $15,000 from the increased property taxes for its Brownfield Revolving Fund. North River Hills contracted with Fishbeck, a Grand-Rapids based environmental, engineering, and construction firm, to steer the brownfield plan amendment through Newaygo County’s brownfield redevelopment authority.
Collaboration between state and local government officials, economic development organization The Right Place, and the development team set the stage for project success. “The project is truly a win-win for Newaygo residents, local governments, the developer, and the State of Michigan,” said Fishbeck project manager Susan Wenzlick. “I’m so happy we could be part of this team.”