City approves rezoning of former Fremont School to build Coldwater Senior Villas

COLDWATER — The Coldwater City Council has approved conditional rezoning of a 9.25-acre piece of property for Coldwater Senior Villas — where the Fremont School once stood.

The council also approved Monday night a reduced payment of 3% of payment in lieu of property taxes (or PILOT) for the revamped project.

The COVID-19 pandemic's effects left West Chester, Ohio, developer Pivotal, with a 40% increase in costs since it began planning the project in 2019.

Pivotal Senior Vice President Pete Schwiegeraht told council it took three applications to the Michigan State Housing Development Authority to get the tax credits approved to make the project financially feasible.

Rising construction costs changed that viability — 20 other approved projects faced the same dilemma.

"They did put together a program that helps a lot, additional credits to the project," Schwiegeraht said, of MSHDA.

Those changes only helped with half the cost increases, so the developer cut the project to single-story buildings. This design change raised costs by eliminating shared walls and floors. The cost overruns were $3 million, with little way to generate additional revenues.

More:Developer wants to buy city land to meet housing needs

"Phase II Environmental testing revealed a significant amount of metals in the soils, including high levels of mercury, lead and arsenic throughout the site. The metals levels exceed Residential Action Levels, which requires a clean up of the site in accordance with federal and state regulations," the developer said of the former school site.

Schwiegeraht said developers are talking to local Brownfield officials about financial help for remediation.

The developer has two years from approval, or October 2024, to begin work on a maximum of 48 units or lose its zoning. The current plan is to build only 40 units, but Pivotal hopes to build more.

More:Coldwater schools Fremont Street property remains empty due to 'COVID inflation'

Cutting the PILOT to 3% will give the developer another $100,000 to use.

"We have a gap that's probably still in the half-a-million-dollar range," Schwiegeraht said. "We are working on some design changes that will help with some of that."

The PILOT at 3% brings in $7,500, but the taxes are shared with other taxing bodies. The city would get less than $2,000.

Coldwater approved PILOTs at Whispering Pines at 11% and Lofts at Milne Plaza at 8%; both were pre-COVID-19.

Councilman Jim Knaack asked how much money the city would lose on the PILOT.

The property now does not pay taxes because Coldwater Community Schools owns it.

Mayor Tom Kramer said, "It's up to us, but it's a good project. It's affordable housing for seniors. It's a location that is maybe challenging to develop. The site has some issues."

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There was little interest in the site before hazardous materials were discovered on the land.

With the approval, the developer Pivotal, which changed its name from MVHA Partners due to a company with a similar name, must put the final plans together, build the units and make the operation financially feasible.

"We worked hard with our architects, engineers and contractor to figure out ways so we could honor all of the original commitments made from a zoning perspective," Schwiegeraht said.

— Contact Don Reid: dReid@Gannett.com. Follow him on Twitter: @DReidTDR.

This article originally appeared on Coldwater Daily Reporter: Coldwater OKs rezoning for 48 senior villas on Fremont school site