Local Media Leave off Big Part of the Story About the New Bowling Alley Block Development

[XLFD]

On July 12, 2016, the Michigan State Housing Development Authority (MSHDA) approved Low Income Housing Tax Credits (LIHTC) of around $1.5 million to construct two apartment buildings in downtown Ludington on the west end of the old bowling alley block.

The City of Ludington Daily News (COLDNews) reported in an article, Downtown apartments a go: MSHDA approves financing plan for Ludingt..., the following apparently coming from the Ludington's city manager: 

Only one of four applications is accepted by MSHDA, and City Manager John Shay said it’s an honor for the Ludington project to be selected.  “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.”

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).

The Mason County Press also came out with a story earlier, State approves funding for new downtown Ludington building project., with some of Ludington's community development director's help in explaining the project:

LC Consultants of Ann Arbor has proposed building two four story buildings on the parcel that consists of West Ludington Avenue, West Loomis Street, South Rath Street and South Robert Street. Each building will contain first floor commercial space and 30 apartment units on the top three floors. The apartment units will be a combination of one and two bedrooms.  The building on Loomis Street is proposed as senior housing for people ages 55 and older. The Ludington Avenue building will be designated for family housing with no age restrictions.  Both buildings will offer subsidized rents and require residents to be below certain area medium income levels...

“With current construction costs, subsidies are absolutely required to get a project built that has affordable rents,” said Heather Tykoski, Ludington community development director. “We need the workforce housing."

Unfortunately, both news releases failed to paint the full picture for the citizens and visitors of Ludington, leaving out some of the details of the deal.  The 'big win for Ludington' on this 'workforce housing' project worth $16 million has plenty of limitations imposed by MSHDA in order to qualify for family housing with affordable rents.  But you can't find these in the local media.

If you go to the source of the news, MSHDA, you get a better picture of what these housing units will amount to.  In the news release "Two downtown Ludington apartment buildings to be constructed using Low-Income Housing Tax Credits", MSHDA gives us the big picture of what we have to do to get these credits:

 

"Both apartment buildings, at 225 Ludington and 200 Loomis, will be situated just a few blocks east of Lake Michigan. Eight of the 30 apartments at 225 Ludington will be set aside for permanent supportive housing and three of those will be designated for the chronically homeless. All of the 30 units at 200 Loomis will be senior housing with half of the homes reserved for residents with 60 percent area median income (AMI) and the other half for those with an AMI of 40 percent."

Supportive housing is housing that facilitates those with very low incomes (at or below 30% of the median income level of the area) or who have a describable "special need".  Eight of the units on Ludington Avenue will be for these tenants permanently, not just for 15 years as it was marketed to the people.  Three of these $267,000 units will be granted to the chronically homeless, again on a permanent basis. 

While you struggle just to make greatly increased tax payments on your less vibrant hundred year old house in a neighborhood far away from the beach and downtown amenities, up to eight households who couldn't do what you do are living in opulent splendor in their condos subsidized by you and other fools trying to live the American Dream.  The people who set up this situation have the nerve to call this social equity or social justice. 

This is how socialized housing works, and the City of Ludington is doing its part by jacking up the average rents in Ludington and displacing tenants from Ludington by enacting their Rental Inspection Ordinance, then further inconveniencing the landlords by making their taxes go way up for all their properties by the tax-increment financing scheme and needful costs of infrastructure improvements necessitated by the construction (while the developers pay little or no taxes). 

It looks great for short-term hopes and economics if you limit your vision, but how does our community recover from this over the long term, particularly if this becomes the accepted way to do things like this?

[MED]

Hmmm, sounds like ideal accommodations for Syrian refugees!

[XLFD]

You'll be impressed by the special Damascus wing on the penthouse level to promote diversity in our region.

[Brad]

And sounds like familiar tactics.... where have I heard something like this before....

Maybe if I had land near the water and dug it out for a marina, ...and other marinas had problems and couldn't rent out their docks, then those boaters would rent from me... uh...

[XLFD]

Great point.  The city marina (almost next door to these developments) received millions in subsidies over 30 years ago, received millions in maintenance and improvements over the years, and seeks millions in the near future for improving their docks from State and Federal sources. 

Yet at the point the subsidized marina began, the private marina business in Ludington was vibrant and filled with charter boats with lots of business.  In comes the new public marina, assuring the privates and the State that there would be no charter boats operating therefrom, that the public would have access to this marina, that they would not benefit from all of the benefits they had (like duty-free gas, no property taxes, state-funding of almost all maintenance and improvement projects, etc.). 

All lies, and all anti-business for the area.  Water levels down at the city marina, spend a quarter of a million for dredging.  Tons of raw sewage dumped from city-owned sewage mains into the PM Bayou at two different times, and they say it's not their problem. 

The city is currently screwing the landlords and tenants of Ludington using lies and similar anti-business tactics to assure their ends which are geared towards unrealistic Agenda 21 goals (see the new master plan if you think otherwise), not towards anything favoring free markets.

[Brad]

Definitely X at the expense of us citizens....

[Inquiring Mind]

      Thank you for the information. I have been researching some of the MSHDA information and have learned that 30% income for 1 person is $11,070 and the max rent is $276.00 per month, 2 people at 30% income level is $12,630.00 and the rent will be $315.00,  40% income for 1 person is $14,760.00 and the maximum rent for a 1 bedroom apt would be $369.00 per month, for 2 people at 40% the income limit is $16,840.00 and the rent will be $421.00 per month. At the 60% income level for 1 person is $22,140.00 and rent is $553.00 for 2 people the income level is $25,260.00 and the maximum rent they can charge is $631.00 per month. If the Michigan minimum wage is currently $8.50 per hour or $15,720 per year then one person will pay $553.00 per month but if both husband and wife have full time jobs they will make too much to live in these apartments, that leaves only people on public assistance or SSI eligible to rent if they are a married couple. I also notice that theses are only 1 and 2 bedroom apartments, do you know how many of each? That limits the rentals to a couple with one or two children as long as they are the same sex, a maximum of 4 persons in each apartment making the maximum rent per apartment $789.00 per month that seems a little steep for a family that works in Ludington and earns less than $31,560.00, that is 1/3 of his income. Do these apartments include utilities?

     If my math is right 1 person living in a 1 bedroom special needs apartment paying $276.00 per month will take 80+ years to pay off the cost of this apartment. In 15 years only $49,680 will have been paid on that apartment. The city code says there must be at least 1 off street parking place per apartment and additional parking spaces for any retail business is there room for at least 75 to 80 off street parking places?

    How much is this complex going to pay in property taxes? And how much is going to be returned to the developer? Has the city answered any of these questions? I wondered when the rental inspections ordinance was passed how long it would take for a low income rental developer to come to town, but evidently this was in the works before the rental inspections ordinance was passed. Gee how convenient was that. I'm now investigating the Vacation rentals in Ludington but that will be another post. 

[MED]

Thanks for the research and analysis. It's obvious that those who argue for such projects using the assertion that "...we need affordable housing for the working people in this town..." do not have these facts. If you're working, no housing for you.

[XLFD]

[Brad]

Agree, nice work and thorough research X, IM, and MED.

My largest complaint has always been the crime of no taxes for such a long time.  And how this plays for me and WWTP.

But I think Neal and HOF had a big play in this.  I'm sure Neal was not a loser on this and that another unseen loser will be his current HOF employees.  HOF already seems to have a high turnover rate, but HOF will now have a large hiring pool that is only a block away and most likely at lower pay rate.   Good luck to current HOF employees.

[shinblind]

 

My biggest issue in all of this is not knowing how this deal is structured. Initially Neal and Wilson acquired their properties to sell for a profit. Do to the economic situation at the time, they over-paid for the land and when they tried to market it found out that there were no willing buyers .

Now enter the Ludington Foundation. Neal and Wilson donated their land to the Ludington Foundation . Well and good except that if the land is developed to produce income, and the deal is structured in such a way that  some if not all of the income will be kicked back to the original owners  or their offspring.  In other words The Ludington Foundation is the White Knight bailing out Neal and Wilson from their bad investment. The income produced is enhanced by tax abatement's both pre and post construction. Tax breaks will allow a larger income from the property plus whatever benefits there are from a charitable standpoint  .

Also remember in this entire mix, that  real estate speculator former mayor John Henderson will profit handsomely from the sale of land he bought that will be used for the new fire barn. Also attached to this deal is former city council member Brent Scott who donated the former Ludington Lumber site  to the Ludington Foundation after trying unsuccessfully to sell his property. This property will be used for the new food coop. Is this also structured as an income producing deal?  Who knows the whole thing surrounded in secrecy. It just seems strange that so much was donated in such a short time. 

Add into this mix the local media whom by their indifferent attitude and an un-curious nature are complicit  in lieu  of seeking the truth. They are the true enablers who allow this shifty situation  to happen under their watch. Lazy and frightened  of losing add revenue they no longer should be thought of as news reporters but as a publicity department.

Also the intellectually challenged City Council  are part and parcel to this fleecing of the taxpayers both by accepting this deal and not fully exploring the other offer they had on the property.

Now is any of this illegal? Who knows? Improper and unethical probably, but who knows if anything illegal took place without knowledge of how this is structured.  But I do know this, except for a select few, that is a bad deal for the taxpayers.

[Brad]

OK... now I have 2 huge issues with this scam.
Great synopsis! Never heard these details, but had idea who was involved and that there were unknown profiting to the characters.
And of course the ones who will be hurt the most is the citizens.
Thanks a lot LDN, MCP, etc (sarcasm)
Thank you Shinblind!

[XLFD]

I'm glad to see that others are connecting some of the dots that I have been encountering in this complex scheme, it gives me hope that if I do get elected in the fall as a councilor and either investigate the heck out of city involvements or unwittingly become part of the establishment, that there are still some out there that will question why these things are going on and say their concerns out loud. 

There's a lot of strange coincidences out there, all coinciding around projects involving these two people and current and former public officials, where numbers don't seem to add up, but shady connections do.  And the COLDNews involvement is highly supportive, I would say propagandistic, in backing these men and projects.