Affordable housing proposed at old McDonald’s restaurant in downtown Muskegon
MUSKEGON, MI – The site of a long-vacant former McDonald’s restaurant in the heart of downtown Muskegon is the site of a proposed affordable housing development.
Harbor View Lofts will include 46 apartments with rents that should be affordable for working families, Jake Ekholm, Muskegon’s director of development services, told MLive/The Muskegon Chronicle.
Development depends on obtaining competitive tax exemptions from the state.
The location is located at 122 W. Muskegon Ave. Across the street from City Hall and bounded by Terrace and Jefferson Streets. It’s also two blocks from the Muskegon Farmers Market.
It was the location of a McDonald’s franchise for nearly 20 years until it closed in 2015. It has remained vacant since then.
What further complicated the redevelopment process was the environmental pollution caused by “outdated” uses and the relatively small lot size, Ekholm said. The land area is only less than one acre.
The city received a $500,000 state grant to address pollution for a previously planned development there, Ekholm said. But he said the development never worked and the grant had to be returned.
Related: Developer will pay $1,000 to Froebel School in Muskegon if affordable housing plan gets approval
Pivotal Development is the company behind Harbor View Flats and has a purchase agreement for the property, Ekholm said.
The company has a 30-year history in developing affordable housing, producing 7,000 units in 100 housing projects in 15 states, according to its website. These include developments in Grand Rapids, Lansing, Jackson and Saginaw.
The company has the know-how to accommodate housing, requires person-to-person parking on site, and has contamination cleanup built into its costs, Ekholm said.
“These guys are among the best,” he said, adding that he hopes Pivotal will develop other projects in the city.
Financing for the Harbor View Lofts project relies on low-income housing tax credits provided by the Michigan Housing Development Authority. It’s one of several affordable housing projects proposed in Muskegon that follows what’s called LIHTC this year.
Applications are due in December, and awards will be presented in April 2024, Ekholm said.
LIHTC projects typically have a mix of units renting between 30% and 120% of the area median income, he said.
The City Commission has already approved the required “payment in lieu of taxes” agreement for LIHTC. This agreement stipulates annual payments estimated at $18,000, equivalent to 5% of rental income.
Additionally, the city approved a municipal services agreement for 3% of rental income that will bring in an estimated $10,800 annually for police and fire services.
A housing study conducted this year for the city of Muskegon found that an additional 1,100 low-income rental units will be needed in the city over the next five years.
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