COLDWATER, MI — If everything in the process falls in place, the Redstone Group will begin the phased construction of 228 apartments on Carriage Circle behind Home Depot in September.
The Brownfield Development Authority for Coldwater approved a plan on Monday, June 30, to allow the company to recapture the increase in taxes over 16 years to cover selected development costs.
Carriage Circle proposed development
Coldwater City Manager Keith Baker said there is a need for three-bedroom units. The density is less than 30 units per acre, which is allowed for residential apartments.
The Coldwater City Council must approve the Brownfield plan with a hearing set for July 14.
Financial consultant Joe Agostinelli said what is known as “tax increment financing- TIF” is the only way to build new housing with rising construction and financing costs.
Local taxing units will continue to collect the current taxes, but 85% of the increase in taxes resulting from the construction will be refunded to the developer to reimburse Redstone for some of its costs.
Agostinelli said bond issues are not covered and will receive the increased taxes to pay off bonds earlier. Baker said these include the Branch County Jail bond, the city’s road millage, and school bond millage.
Any future school bond millage would collect taxes.
Brownfield board member and County Administrator Frank Walsh reluctantly recommended the Brownfield TIF plan.
“The $1.6 million hit to the county is significant. But again, if you look at it on the other side of it, this project is very important to the community,” he said.
The county would lose an estimated $100,000 a year in taxes for 16 years.
Coldwater Schools would lose $8.6 million in new taxes over the 16 years.
That prompted Superintendent Paul Flynn to joke with developers, “Make sure 200 of those units have kids attending school” to help offset some of the losses.
The city loses $4.5 million, with the BISD losing $2.9 million in new taxes over the 16-year period.
The Michigan State Housing Development Authority is expected to allow a $14.5 million credit to the developer to encourage the construction of affordable housing.
That allows Redstone to use TIF dollars to supplement rent where the developer agrees to an income restriction for 30% or 68 units for tenants with an average area median income of 90% or less than the Average Market Income.
Developer Brian Papke said the contractor, Copper Rock Construction, who completed the Summit Apartments on Willowbrook, is ready to start work on Carriage Circle. The first units are expected to be ready by late fall 2026 or spring 2027. Redstone would rent completed units as construction continues.
The site was developed in 2007 for small single-family homes. Only two were built.
A plan to build the Sauk River Apartments on the site in 2017 fell through.
Contact Don Reid: dReid@Gannett.com
This article originally appeared on Coldwater Daily Reporter: City, county, and schools give up taxes in Brownfield financing for 228 apartments
Reporting by Don Reid, Coldwater Daily Reporter / Coldwater Daily Reporter
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