Holland approves financing deal to bring 'affordable' apartments to 24th Street

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A drawing shows a birds' eye view of the future apartment development at 24th Street and Waverly Road in Holland. Holland City Council approved a payment in lieu of taxes agreement with the developer Wednesday.
A drawing shows a birds' eye view of the future apartment development at 24th Street and Waverly Road in Holland. Holland City Council approved a payment in lieu of taxes agreement with the developer Wednesday.

HOLLAND — Holland City Council approved a deal Wednesday with affordable housing developer Magnus Capital Partners to make a proposed apartment development at 24th Street and Waverly Road tax-exempt.

In exchange for the tax-exempt status, Magnus Capital Partners will pay a payment in lieu of taxes (PILOT) of 4 percent of rents collected, and a municipal services fee of $20,000 per year, adjusted annually based on inflation.

Magnus Capital Partners, a Wyoming, Mich.-based real estate developer, has received Holland planners' approval already for the latest in the company's "HOM Flats" suite of apartment developments in West Michigan. The developer has built HOM Flats complexes on Felch Street in Holland Township and at "28 West" in Wyoming.

A site map of the future apartment development at 24th Street and Waverly Road shows the layout of the three four-story buildings.
A site map of the future apartment development at 24th Street and Waverly Road shows the layout of the three four-story buildings.

The site plan, which the Holland Planning Commission signed off on in April, includes three four-story buildings and a total of 191 units. The buildings are expected to have commercial space on the first floor and residential apartment units on the upper levels.

In initial plans presented to the city in 2021, the units were divided among more buildings with fewer stories, but the development company revised its plans in 2022, saying they were forced to add more parking based on state requirements for the financing they are seeking.

The PILOT approval is a prerequisite for Magnus Capital Partners to seek a low-income housing mortgage loan from the Michigan State Housing Development Authority. Such loans are typically offered in 35-40 year terms, the city's attorney told council Wednesday, and the city's PILOT agreement will last through the term of the loan, or up to 40 years.

The developer has promised to build an amenity-rich residential community at the undeveloped lot south of Grand Valley State University's Meijer Campus, with a plaza, dog park, playground, rooftop terraces and pickleball courts planned.

The development company will have to report back to the city and state that it is meeting the requirements of the PILOT and the state financing program to serve lower-income residents.

Council members were eager to approve the project, since encouraging more affordable housing to be built in the city has been one of the council's top priorities for several years.

Hudsonville Ice Cream's headquarters, 345 E. 48th St. in Holland, is where the company's ice cream is developed and produced. The creamery recently announced plans to construct a $35 million freezer space on the site.
Hudsonville Ice Cream's headquarters, 345 E. 48th St. in Holland, is where the company's ice cream is developed and produced. The creamery recently announced plans to construct a $35 million freezer space on the site.

Council member Lyn Raymond said the project fit neatly with the council's approval at the same meeting of a tax abatement for fast-growing Hudsonville Creamery and Ice Cream Company's manufacturing and office facilities in Holland.

The ice cream maker received a 50 percent tax abatement from the city Wednesday for what the company says is a $35.5 million investment in new and renovated office space, the latest of several major expansions in recent years.

More: Coastal Container's sizable Holland expansion has financial support from six state, local organizations

More: Hudsonville Ice Cream breaks ground on $35M freezer space

Holland Mayor Nathan Bocks called affordable housing "one puzzle piece of a larger economic development puzzle."

"It's a huge economic development issue," Bocks said during the meeting. "We need employees, and those employees need places to live, and they need places to live that they can afford to live in, and if we don't have affordable housing in this community for the people that would be working at Hudsonville, that would be working at the other companies, that's going to be devastating economically for this community."

The exterior of Holland City Hall Monday, Sept. 20, 2021 located at 270 South River Ave in downtown Holland.
The exterior of Holland City Hall Monday, Sept. 20, 2021 located at 270 South River Ave in downtown Holland.

At the same meeting, council also approved its plan to spend a total of $322,894 it will receive this year in federal Community Development Block Grant funds. With the label of "entitlement community" Holland earned in the 1980s, it automatically receives the funds from the U.S. Department of Housing and Urban Development each year.

The money is intended to be spent to promote "decent housing, a suitable living environment and enhanced economic opportunities, principally for the benefit of low-income residents."

The city plans to distribute the funds as follows:

  • $115,000 for the city's Home Repair Program, which provides grants to income-qualified homeowners to help pay for home repairs and lead-related projects.

  • $76,000 for sidewalk installation and improvements

  • $39,000 to Lakeshore Habitat for Humanity to help cover closing costs and down payments for new homeowners in Habitat homes

  • $24,000 to Community Action House's Street Outreach Program, which provides outreach and services to the homeless

  • $20,000 to Good Samaritan Ministries to keep people at risk of eviction in their homes.

  • $11,000 for Fair Housing Services through the West Michigan Fair Housing Center

  • $45,000 for CDBG program administration

— Contact reporter Carolyn Muyskens at cmuyskens@hollandsentinel.com and follow her on Twitter at @cjmuyskens

This article originally appeared on The Holland Sentinel: Holland approves financing deal to bring 'affordable' apartments to 24th Street