Serving Gogebic, Iron and Ontonagon Counties
Serving Gogebic, Iron and Ontonagon Counties
IRONWOOD TOWNSHIP — With a deadline a couple months away and more information needed, the Ironwood Township Board of Trustees tabled a request from the Upper Peninsula Commission for Area Progress for a temporary reduction of taxes on the Mill Trace Apartments.
UPCAP took over the low-income apartments located off Lake Road in June 2014, according to UPCAP’s Director of Finance Rick Aird.
Aird said the complex was in “pretty dire straights” when UPCAP took over managing the property and UPCAP put $80,000 into the project for a number of items, including reducing the property’s debts.
There are 10 vacancies in the complex, according to Aird, with UPCAP budgeting for five.
Given the financial situation, along with the need to renovate a number of the apartments, Aird presented two proposals to the board for review.
According to information presented to the board, both plans would see the establishment of a Payment in Lieu of Taxes — meaning UPCAP wouldn’t have to pay the $20,390 it currently pays in taxes. One of the plans would create a 2 percent PILOT, where 2 percent of the rent from the property — estimated to be $4,910 of the roughly $245,200 — would be payed to the municipalities that collect taxes on the project. The township’s share of 8.65 percent of the tax revenue would mean the township receives $424. UPCAP would also agree to pay the township another $1,338 to ensure the township isn’t losing any of the $1,763 the township currently receives from the property in tax revenue. This plan would have UPCAP pay $6,248 for the property.
The second plan would establish a 0 percent PILOT where, while the township and other municipalities got no money in lieu of taxes, the township would get $2,500 from UPCAP. Under this plan, the township would receive more than they currently receive from the taxes but that cost would be the only thing UPCAP would have to pay.
Any money saved by the agreements would be used to improve the property, Aird said.
Both Aird and Jon Mead, UPCAP’s executive director who joined the meeting via conference call, made clear that without an agreement, it would be difficult for UPCAP to continue operating the apartments.
“This is definitely going to secure the existence of the project, which is right now in question,” said Aird, referring to the proposals.
The establishment of either of the PILOT programs would also allow UPCAP to seek additional government funding sources, which would allow further renovations to the property.
The board decided more information was needed, including a timeline on renovations, when township attorney Mark McDonald raised the issue of whether UPCAP’s plans for the complex were eligible for a PILOT under state law.
According to McDonald, PILOTs can only be established for new projects or projects that involved renovations and, based on what he heard at the meeting, the main argument UPCAP was making was they needed the PILOT for financial reasons.
McDonald also argued any agreement needed to include language allowing the township to end the PILOT if the promised renovations weren’t being made.
Mead disagreed with McDonald regarding the eligibility and added that renovations would indeed be made. Further, for the PILOT to take effect, it would have to be OK’d by the Michigan State Housing Development Authority.
With McDonald expressing reservations as to whether the township was able to enter into an agreement with UPCAP, the parties agreed to table the item until the board’s next meeting. The board also agreed to arrange a meeting between the UPCAP representatives and township officials, including McDonald.
In other action, the board:
—Authorized township officials to continue to investigate purchasing a new pick-up truck. The 2016 Ford F-Series would cost $27,668 and the purchase would depend on the financing the township could get, according to Clerk Mary Segalin.
—Approve a salary resolution changing Segalin’s salary to $39,269.
—Approved blacktopping the entrance driveway to the township hall as part of a culvert replacement at the hall. According to Supervisor Alan Baron, the exact price of the project will be dependent on the cost of the culvert and other equipment needed.
—Discussed an improvement “wish list” for the township hall and Sunset Acres Cemetery and authorized township officials to continue pricing out the repairs.
