Ludington Bowling Back Alley Deal: Castles for Cast Offs

[XLFD]

Introduction

I am admittedly eligible to live in low income housing, as are many of my friends; in fact many in Ludington are.  A very experienced developer has gone through the initial hoops to bring in five dozen new residences for people like us at the bowling alley block, effectively where the fire station stands and the lot north of it. 

We could be "those people" our city officials tell us about that desperately need affordable housing; we are definitely some of those people left homeless or poorer because of the City's recently enacted Rental Inspection Ordinance (RIO).  Because of RIO, somebody I know had their rent go up over 35% along with having further restrictions on their rental agreement.  Others homes I hear are being converted back into single-family residences, pushing out the previous units and all their tenants.  The economic law of supply and demand makes it harder to find a low rent place, and secure it when you do.  All due to the RIO, a law made to punish Ludington small business owners. 

Tom Tyron owns several properties and his words at the last council bridged the two different concepts of the RIO and this development.  His words were strong, but could have been a lot stronger had he not been a gentleman.

" I was here for one of your meetings where you passed a rental inspection ordinance, and I couldn't figure out why it was.  Now all of a sudden we made a wonderful deal to build low cost housing downtown.  State-funded.  And you ask why the private sector hasn't done that.  It's because it's not a good investment for them.  But you guys want to compete with all of us, by sponsoring HUD housing.  I don't have a problem in the world with a developer who wants to come down there and build that property with his own money, but I'm troubled by you using my money.  I always have been, I don't like it.  It's just some more government crap.  Thank you."

It was a very good, and very short refutation of three of the previous speakers who actually thought this project was well conceived and in our city's best interest.  I made some similar points previously in the public comment: 

"I would advise this council to consider the deal between the City and the developers, Bob Jacobson and John Wilson and what it will mean to the city's future.  In order to get this development, the city is forfeiting the future of Ludington.  This last year, the city went over $30 million in debt in order to keep their water and sewer systems at minimal operating standards.  You now want to grant PILOTs and consider tax increment financing that will further burden our citizens with $20 million worth of financial obligations to give the city an illusion of positive growth in the downtown. 

$50 million of new debt is a poor legacy, but we can be sure if this city government is left unchecked, they will find even more new ways to take our cash after they nearly double our sewer rates over the next three years, and keep raising them to make up for the drains of our infrastructure their crony partnerships envision.  Remember all the money, time and effort that was expended the last time John Wilson expressed interest in this block.  Learn from it."

Mathematics Doesn't Lie:  That Pauper's Place is Worth Three Times Yours!

Simple mathematics and statistical data will show how this development illustrates the folly of socialized housing.  If you own a house or condo in Ludington, the median value is about $100,000.

http://www.city-data.com/city/Ludington-Michigan.html

Here is the fair market value (twice the assessed value) of the city councilors living in the even number wards: 

Winczewski:  $111,600

Krauch:  $119,600

Castonia: $80,400

Even John Shay who makes around $150,000 a year in salary and benefits has a house worth only  $172,000.  These amounts are easily found in the city's assessor site.

This project, should both parcels be used will cost an estimated $16,000,000 to the developer:

March 7, 2016 LCC Packet see p. 90

Each of these two buildings will house 30 units each, or 60 units altogether:

March 7, 2016 LCC Packet p. 38

The federal government via the state government is financing this project with Low-Income Housing Tax Credits (LIHTC) because of the low income housing being made, not because of the ground level retail and common space.  Therefore, the expenditure of $16,000,000 on 60 units of housing means simple division can be used to figure that each unit costs $266,666.67. 

From Rags to Rich Estates

Now, you can find quality Prefabricated houses over 2000 sq. ft. for under $50,000, a downtown Ludington lot for $30,000, and if you have some simple skills and help from some skilled trades, you can set up this dream house for a little over $100,000 in downtown Ludington.  The average value of a house in Ludington.  Three-eighths of what each of these developed units designed for low income people will cost.  Amend that:  Will cost... you and everyone else.

Knowing that indigent people, possibly and probably from all over America and beyond, are living in Ludington households that are valued well over three times what Councilor Castonia's homestead is, and nearly a hundred thousand over what our overpaid city manager lives in, cannot be too much consolation for everyone else who spent a lot of sweat equity paying for their real estate, just to have their future tax assessments sent through the roof to pay for this public/private partnership from Hell planted into our downtown.

But Shay, Castonia and their fellow ignorami want to conceal all that and say they are doing the poor people of Ludington a favor, when their actions send us all further into debt and in the long run, skyrockets our rents in other areas, and makes us all a lot poorer.  Except for those lucky enough to get a $266,666.67 suite in the Hotel Socialista.  Don't let "those people" in our government and their cronies play us for fools.

[shinblind]

This is Ludington.

7 councilors, da mayor, da police chief, and da city manager is enough to fill the entire top floor.

They probably have dibs on the best apartments. 

They have been practicing looking down at the unwashed rabble for years from their perch at the council meetings.

This will give them an even loftier view. 

[Willy]

I couldn't locate it but an article by X in the not so distant past explained about the relocation of the fire house and how this all tied into what is going on. The rental inspection ordinance, relocating the fire house and the bowling alley development are all connected by the players involved. Whoever is connected to the property that the new fire house will be located on are, in my opinion, the ringleaders of this entire fiasco. All the domino's have fallen in line for them and with the help of the useful idiots on the Council, they will see their pockets bulging with taxpayers money.

[XLFD]

Willy,

There is literally a 1000 piece jigsaw puzzle I am working on, maybe more like Einstein's Unified Field Theory, of a whole lot of events and coincidences in an around our area that are seemingly unrelated but revolve around the same people and themes.  It gets a little more clearer and complete as these public/private partnerships progress, but it betokens a sinister motive behind it which you or I would find egregious.  

Here is the main article you mention on the correlation of these two things:  Fire on the Edge of Town.  It is part of a complex web, that I would invite any to look deeper into, if they dare.  I wish I could simplify it without looking like a speculative conspiracy nut.

[XLFD]

Get ready to pay through the nose, this apartment plan has been okayed by MSHDA:

Downtown apartments a go: MSHDA approves financing plan for Ludingt...

“This will allow us to sell the fire station parcel to L.C. Consultants and build a new fire station on Tinkham at the former Lakeshore Lumber site,” Shay said. “This is a big win for Ludington.”  [i.e. the citizens will pay at least $1.2 million to move its fire station to the edge of town and near the schools after they deduct the money from the sale.]

Half the apartments will have one bedroom and half will be two-bedroom units. One building’s apartments is to be rented to people 55 years old or older (rear building) and still have to meet an income criteria, while the other building’s apartments would be rented for low-to-moderate income families (i.e., facing Ludington Ave.).

$266,000 per unit to create these, plus you are stuck with the financing and the increased costs of infrastructure via your taxes.  What a deal!

[Brad]

Yea what a deal...

Ironic, your "pay thru the nose" comment.  As the taxes to repair the Stench won't be paid by this new project.

[Willy]

I wonder how much money was exchanged under the table so that this would be approved. This entire project makes no sense from a purely financial viewpoint but for some amazing reason the City officials in charge have deemed it a good deal and a good thing for Ludington. Why is Ludington blessed with so many idiot politicians.

[AQUAMAN]

The last owner that I knew owned Lakeshore Lumber was Brent, a former city council member, he resigned and left for GR I believe a few years back. Can't remember his last name, but if he still owns that property, he's in that jigsaw puzzle too big time. 

[XLFD]

The City ignored a potential developer who seemingly would have just been developing condos or the like at that bowling alley block without taking the corporate welfare from the city and state. 

In thinking why, I can only come to the conclusion that the City leaders are motivated completely by short term gratification and greed for themselves, not the City of Ludington's welfare.  The City will be able to collect more taxes and get a considerable cut of the administrative costs.  They get more money, you get less, and yet you still can't get in a $266,666 rental unit made for poor folks.  Brent Scott gets a bonus for his obsolete property, courtesy of Wilson and Henderson who are not only stakeholders in neighboring lots, but deeply involved with the bowling alley block.

[AQUAMAN]

And whom made that maddening recommendation for the current group? Shyster Shay! Per the usual! Another Boston-raised person to high school, then went with family to Detroit. Knows how to deceive and control the city council without breaking a sweat nowadays, and why? 

[shinblind]

It would be interesting to know how this deal was set up between the property owners, the Community Foundation, and the City. The key being the Community Foundation.

Is it possible to file a FOIA request with the Community Foundation to see how this contract is structured between the parties? Particularly if the property was  donated outright or was designed to provide income to the owners for a set number of years.

If it was set up to produce income, especially with the tax abatements I could see where there would be little incentive for the involved to entertain other offers on this property. While not illegal it is not exactly being honest with the taxpayers who will be footing the bill.

[Willy]

I think that if and when this deal is unraveled we will all see just how badly the citizens of Ludington have been deceived by their local leaders.

[AQUAMAN]

It's already a done deal. The first two floors will Not be for low-income, it's for commercial lease, to Dentists and Drs., Lawyers, Professionals, and others that will pay big money for a new office. Then in 15 years, all units become condos for sale to anyone with the big money to buy them. Meanwhile, the illusion is to make them low-rentals, and get the 20 years tax break that we all will be paying more in our taxes for. Also, what about the extra sewer, tripled water rates, and infrastructure costs to the rest of us to absorb?