Douglas Officials To Seek $850,000 State Grant/Loan To Help Remediate & Redevelop Haworth Property
Monday night’s Douglas City Council passage of a resolution for a state of Michigan environmental and redevelopment grant application concerning the former Haworth manufacturing building comes with a lot of great prospects for local jobs, improvement of the property, and serves as a catalyst for overall redevelopment and the Blue Star Highway corridor, according to city officials and the project developer.
The Michigan Department of Environmental Quality (DEQ) has determined the property is the source of contaminants that have migrated off-site in groundwater and contaminants remain in soil beneath the plant.
As a result, the state has designated it as a Brownfield site.
A developer - Geerlings Development Company - is ready to purchase the property and asked Douglas officials to cooperate with him by applying for an $850,000 grant/loan through the DEQ (Brownfield Redevelopment) to redevelop the site.
“We are very excited about this project,” said developer Scott Geerlings of Geerlings Development Company, of the 7.18-acre property, with 159,170 square feet of building size.
“The entire exterior will be completely different.”
Geerlings also spoke about potentially having three to four tenants and housing warehouses and light industrial manufacturing.
“I would say the (DEQ environmental) criteria for us will not be of higher use, but a different use,” said Geerlings.
“It is expected that 75-100 new permanent jobs will be created at the site in the first two years following a $5-million to $10-million investment,” states a Douglas’ resolution in support of the effort.
The redevelopment grant/loan can only be awarded to a local unit of government, not a private entity. The grant/loan comes with conditions that the developer create jobs and use the grant/loan funds to conduct investigations and necessary actions to fulfill “environmental due care” and “baseline environmental assessment (BEA) response activities.”
The developer has conducted an environmental site assessment and has agreement with the property’s current owner - Haworth - to purchase the property.
Currently that property is listed for sale at $1.7 million by Commercial Alliance of Realtors. A sale to Geerlings would be contingent, in part, upon receiving the funding for the environmental response activities.
“I have 30 to 40 years experience with these grant/loans programs. I am confident they (State of Michigan officials) will award this because they said they were going to set this money aside,” said Tom O’Connell with ERM, the environmental consulting firm for the developer.
The breakdown of what part of the $850,000 would be considered a grant and what part would be a loan is still unknown, but city officials and O’Connell say that at this point the prospect is for $500,000 in grant aid and $350,000 in a loan.
The loan is expected to be paid by the city with future tax dollars, (e.g. tax increment financing, property tax revenue and from increases in assessed values).
While there has been some inquiry into the matter, city officials said they perceived no major economic risk.
“We are taking the risk there isn’t enough value to make the payment (for the loan portion),” explained Douglas City Manager Bill LeFevere to council.
But the value, plus more, will be there, some council members promised.
“I don’t think it’s a large risk, it’s been studied a lot,” said Douglas Council Member Kathryn Mooradian.
“In my opinion, the money (for the loan) is negligible in terms of what we are going to get out of it,” said Douglas Mayor Pro Tem Greg Harvath.
And developer Geerlings assured council, “There is no risk to the city. We simply have an economic tool the state provides that we are taking advantage of.”
Since the 1940s, the Haworth property has been used for industrial purposes primarily supporting automotive and hardware industries.
The DEQ has determined there is “a lack of available responsible parties” responsible for the polluted property and that “Haworth has established to DEQ’s satisfaction that they are not a liable party for the contamination at the site.
An interim response activity consisting of air sparge and soil vapor extraction installed and operated by the DEQ and its contractors has assisted in reducing off-site migration of a pollutant plume; however, “remaining VOC (chlorinated volatile organic compound) concentrations indicate a vapor intrusion risk throughout the building.”
The developer is responsible for mitigating that latter portion to DEQ standards, per the grant/loan application requirement.
DEQ officials say their agency will continue, independent of the developer’s obligations, to pursue its own mitigation projects at the site and surrounding properties.