Members of the Leelanau County Board of Commissioners were treated to a “brownfield 101 training” session at their meeting Tuesday evening, in anticipation of a new tax increment financing (TIF) proposal that would help fund a long-gestating workforce housing project in Suttons Bay. That brownfield plan has already been recommended by the Leelanau County Brownfield Redevelopment Authority (LCBRA), but would need county board approval to go any further.

The brownfield proposal comes from Peninsula Housing, the nonprofit started by Leelanau wine industry veteran Larry Mawby in 2021. So far, Peninsula Housing has mostly housed people on a onesie-twosie basis. In 2023, though, the nonprofit acquired land off Herman Road in Suttons Bay, with plans to use the site for its first proper housing development. Now, Peninsula Housing is seeking brownfield funding assistance to bring that long-in-the-works project to life.

Peninsula Housing hopes to develop 38 housing units across 11 acres at the 980 Herman Road site, including six single-family homes, 24 duplexes, and two four-unit apartment buildings. Mawby anticipates a $10.4 million construction budget for the project, and is seeking approval for a brownfield proposal that would allow a little less than one-third of the project cost to be reimbursed through a new TIF plan.

As a refresher, TIF funding works not as a new tax or a tax increase, but a tax capture. A TIF sets a base year for taxable values on properties within a certain territory, and then captures the difference as those values increase over time. The Peninsula Housing plan calls for a 30-year TIF and would capture an estimated $2,808,250 in local and state tax revenues over that period.

The LCBRA voted unanimously at its July 21 meeting to recommend the plan to the County Board of Commissioners for approval – but encouraged the board to go through TIF and brownfield training before formally considering the proposal.

Commissioners received that training at Tuesday’s meeting, with representatives from Fishbeck – the county’s contracted brownfield consultant – explaining the ins and outs of brownfield funding and how those tools might be used to address housing shortages in Leelanau County.

Traditionally, Michigan’s brownfield program has existed “to create economic opportunities by putting contaminated properties back into productive use.” Eligible properties included those polluted by chemicals or toxins, as well as properties that are functionally obsolete or blighted. Through proper approval channels, such properties are then eligible to receive grants or special loans, or to utilize TIF tax captures.

As Fishbeck told commissioners on Tuesday, a 2023 amendment to the state’s Brownfield Redevelopment Act opened the door for brownfield funding to be used for workforce housing projects – even for properties that would not have historically been considered brownfields.

To be eligible, housing projects must be priced toward households earning up to 120 percent of AMI (area median income). According to Fishbeck, AMI in Leelanau County is $85,500 for a single-person household, $97,700 for a two-person household, $122,100 for a family of four, and so on. Affordability standards for housing are then determined by pricing rent or mortgage rates at 30 percent of those income rates.

“These numbers are established by the Michigan State Housing Development Authority (MSHDA), and they are evaluated by the county,” Fishbeck’s Therese Searles told commissioners. “Every county has different numbers. [MSHDA] check the data, they update them annually. So, it is done with intention for this specific geographic area.”

For Herman Road, Peninsula Housing is planning to price most units at 80 percent AMI, including the three-bedroom, single-family homes ($270,000), the two-bedroom duplexes ($225,000), and half of the one-bedroom duplexes ($180,000). The other six one-bedroom duplex units would be priced at 60 percent AMI ($110,000). All units would be sold in accordance with Peninsula Housing’s Community Land Trust (CLT) model, where the nonprofit sells the structure but retains ownership of the land on which it sits.

Peninsula Housing has an agreement in place with Homestretch, another housing nonprofit, to construct the two apartment buildings. Those two-bedroom units would likely be 487 square feet apiece and would also be targeted to households making 80 percent AMI, with “rent estimates” of $2,198 per month.

Beyond the LCBRA, Peninsula Housing’s brownfield plan would require approvals from the Suttons Bay Township Board, the County Board of Commissioners, and the MSHDA before a TIF could actually go into effect. A public hearing in front of the county board is one requirement in this process, and all affected taxing jurisdictions must be formally notified at least 10 days in advance. Mawby would also need to secure approvals from other entities that receive tax dollars, such as Northwest Education Services and the Suttons Bay-Bingham Fire & Rescue Authority.

TIF plans have proved controversial in northern Michigan in recent years, and some of that controversy filtered into Tuesday’s meeting, with commissioner Will Bunek saying it was a “misnomer” that no other taxing jurisdictions lose tax revenues because of the proposed Peninsula Housing tax capture. In particular, Bunek raised concerns about millage-funded services in Leelanau County – such as the Leelanau County Road Commission, the early childhood fund, and senior services – losing out on extra funding in the future because of a long-term TIF plan.

Vice Chair Mark Walter, meanwhile, urged commissioners not to get too into the weeds on the specifics of the Peninsula Housing TIF, noting that Searles’ presentation was intended for training purposes only.

“We’re not here to argue any specific project,” Walter said. “It’s nice to know we have one on the horizon, and we’ll get into depth on that at a date that we have set aside to do that and put it on the agenda. But, we’re getting too much into specifics on a topic that is not on our board yet.”

If approved, Peninsula Housing plans to have 10 of the for-sale residential units completed by the end of 2027, with the Homestretch apartment units anticipated to follow the same timeline. The remaining 20 units would be completed by the end of 2029.

You can read Peninsula Housing's full brownfield plan here.

Pictured: Renderings of a single-family two-bedroom home Peninsula Housing intends to include as part of the Herman Road development.