On November 13th I voted yes on the 141 Vester Flats Payment in Lieu of Taxes (PILOT) program, having previously voted no on the full project back in 2022 (https://www.laura4ferndale.com/post/why-i-voted-no-on-the-development-at-141-vester).
This revised project brings substantial community benefits, including affordable housing units, public safety contributions, and essential infrastructure updates, which would not be possible without the PILOT support.
Looking to the long-term benefits, we anticipate a significant increase in tax revenue for Ferndale 15 years from now to the tune of about $311,863 per year (likely more) , which aligns with our vision for sustainable growth and economic equity. This project also marks a historic milestone for Michigan as the first instance of a tax clawback being built into a development deal to the best of my knowledge.
Key Incentives and Community Benefits:
Annual Public Safety Contribution: $10,000 per year, totaling $150,000 over 15 years.
Annual Water and Sewer Contribution: $5,000 per year, totaling $75,000 over 15 years.
Interest Rate Clawback: One-time $55,000 payment if the developer secures financing at 6.5% or lower.
Affordable Parking Permits: Discounted parking passes for residents in 50% and 60% AMI units, reducing their parking costs by 50% compared to market-rate units.
Water Main Improvement Contribution: A one-time reimbursement of $83,835 for local water main improvements.
Public Art Installation: A mural or art installation valued at up to $20,000.
Additional Public Alley Improvements: $30,000 for enhanced alley updates.
Total Value of Community Benefits: $413,835 over the 15-year period.
The inclusion of a tax clawback provision ensures that the developer fulfills their commitments to the community. According to Good Jobs First, clawbacks are clauses in subsidy agreements that require companies to deliver promised public benefits or return the subsidies received. In this case we’re tying it to the developers finances;If the Developer is able to replace, substitute, or change its initial construction financing to permanent financing for the Property that has an interest rate of 6.5% or less, we will clawback 55K.
By implementing this mechanism, Ferndale safeguards taxpayer investments and sets a precedent for responsible development.
Balancing the need for affordable housing in Ferndale requires a thoughtful approach that aligns with both community character and economic realities. Our July 2020 housing analysis found that 22% of local jobs are in sectors like food, hospitality, and retail, where workers can afford a maximum rent of around $750 per month.
To meet this need without compromising the essence of our neighborhoods, focusing on larger affordable housing projects in downtown areas is a more sustainable path.
Concentrating these developments downtown helps preserve single-family homes in R1-zoned areas, keeping the unique character of our neighborhoods intact while maximizing accessibility to transportation, jobs, and amenities for those who need it most. This approach allows Ferndale to expand inclusively, supporting both current residents and those who are essential to our local economy.
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