Traverse City Record-Eagle

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February 3, 2014

City weighs tax waiver

TRAVERSE CITY — City commissioners likely will challenge a low income housing developer to justify his request to waive approximately $330,000 in property taxes for a proposed $15 million multi-family development.

Woda Group LLC proposes to construct 17 three-story buildings to house 102 low-income families on a 15-acre parcel at 10597 East Traverse Highway, just west of Tom’s West Bay.

Several commissioners said they want more information before they agree to accept 10 percent of rents, in-lieu of standard property taxes, when they meet today at 7 p.m. in the Governmental Center.

“I strongly support affordable housing, but I would want to be sure this will truly be affordable housing,” said Commissioner Jeanine Easterday. “Who is going to make money on this thing? Will it really accomplish the goal that on the surface it’s claiming?”

City assessor Polly Cairns estimated the development would pay about $386,000 a year in property taxes without the waiver, of which $50,000 would come to the city. A rent-based payment in lieu of taxes would generate about $56,000 a year and the city’s portion would be $756.

“Obviously, all commissioners are going to have a concern over this issue,” said Mayor Michael Estes. “Every time we give a concession on taxation someone else picks up a bigger share. So to what extent do we continue to do this?”

The Ohio-based Woda Group is ranked as one of the country’s largest affordable housing developers. The project will be partially funded with credits from the Michigan State Housing Development Authority.

The state requires the developer to request a payment in lieu of property taxes for any project it funds, wrote P. Craig Patterson, vice president of development for the company, in a letter to the city. Without the waiver it will be “near impossible” for the Woda Group to receive state funding, Patterson wrote.

Patterson could not be reached for comment.

Estes said he wants more information about the project and its benefit to the city before weighing the size of any tax break.

“Taxes are a very negotiable item,” Estes said.

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