The Chelsea Downtown Development Authority board had a busy morning Thursday, April 21, approving a $475,401 draft budget for 2016-17, a request for the REU program for Zou Zou’s planned expansion, and a letter of intent with a developer for the Mack building.
The draft budget, which was originally projected to contain about $100,000 less in tax incremental funding revenues due to changes in the state’s personal property tax, now includes a line item of about $111,000 in local community stabilization share replacement revenue from the state.
Included in the budget are: $15,000 earmarked for Sounds and Sights, $2,500 for plants for the planters that are maintained by the Chelsea Area Garden Club, $12,000 for the annual sculpture walk, $3,000 to videotape meetings, and $100,000 for the purchase of the Palmer lot. This expense will be paid off in full in September 2018, and there will also be a work session on May 5 at 7:30 a.m. to discuss the proposed redevelopment of the Palmer lot space.
The draft budget now heads to the Chelsea City Council as the elected officials begin their budget deliberations next month.
The DDA also approved a letter of intent with Ronlon LLC (Joe Ziolkowski) for projected $1.25 million renovation of the Mack Building that states the DDA will contribute up to $200,000 over five years in order to seek incentives through the Michigan Economic Development Corporation.
The developer plans to put $550,000 into the project, the DDA $200,000 and MEDC $500,000.
“The DDA funds would be used for selective demolition, environmental capping and mitigation, roof removal and other eligible activities,” the letter states.
The project is expected to generate $15,000 in tax revenue annually and include four apartments on the second floor and three commercial spaces on the ground floor.
“Once complete, this would mean $15,000 in new tax revenues per year so the net costs to the budget would be $25,000 for five years that would be recaptured in tax revenue,” said Mark Heydlauff.
In addition, the board approved a request by Cavanaugh Investments, LLC for about $30,000 in a special assessment on the property through the DDA’s utility upgrade assistance (REU) program. This would amount to about $3,000 per year for 10 years for the planned Zou Zou‘s redevelopment project.
This program was put in place to help redevelopment projects in the DDA district that are greatly increasing the amount of water and sewer usage currently in place. Restaurants typically fall into this category.
City Manager John Hanifan said Smokehouse 52 had used this program when it opened and that’s been “pretty successful.”
For example, a typical home uses 1 REU while an establishment such as a restaurant uses 4 REUs per thousand square feet, he explained.
Zou Zou’s is expanding into the former In Chelsea Hair Design space, adding seating, expanding the kitchen and plans to serve alcohol.
The DDA also discussed the need to upgrade to the city’s wayfinding signs and the Chelsea Area Historical Society has requested that a sign direct folks to their new museum on Jackson Street. Plans are also underway to repaint the light poles and the stamped crosswalks downtown.
