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Kalamazoo Brownfield Redevelopment Program Has Become Renowned Throughout the State of Michigan

By Jennifer Eberbach

Location: Kalamazoo, Southwest Michigan
Population: 77,145

The city of Kalamazoo’s brownfield redevelopment program has become renowned throughout the state. With the strong support, past and present, of the city commission, city administration, the Brownfield Redevelopment Authority, and the public, Kalamazoo’s focus on redeveloping brownfield sites, retaining businesses, and growing targeted neighborhoods, has lead to the completion of more than 30 projects. “Our success is due to the support and funding of our city leaders,” said Redevelopment Project Manager Marc Hatton. One of the reasons there has been so much development in Kalamazoo in recent times is that “we have acted like a land bank for over a decade now, even before that phrase was coined. We acquired targeted properties and prepared them and sold them for redevelopment, or we banked them with the hope of acquiring more property for larger projects.”

Part of its success is due to the Economic Development Department’s setup. “I also think it’s unique to have two people with strong careers in environmental consulting as a basis for our experience to do this type of work,” Hatton says of himself and Redevelopment Coordinator Eric Kemmer. “We also have people with planning and real estate backgrounds and people with straight economic backgrounds. We are still a relatively small group, but I think the talents we have as a group are unique,” he says.

Another feature of Kalamazoo’s brownfield redevelopment strategy is that “we write our own plans. We have one brownfield plan with many sites. I know other folks have many plans, each dedicated to one project and largely written by consultants of the developers. We take the reverse approach. Our focus is on our wider target areas instead of one development at a time,” Hatton explains.

Top: The site previously held a gas station (which left underground contamination) and an unused parking lot.

Bottom: Catalyst Development Company 3 LLC constructed a larger building and a new parking structure on what had previously been two lots. Miller Canfield’s Kalamazoo law office is now located on the top two floors.

Being “proactively” involved in brownfield redevelopment creates opportunities to collect the increase in tax capture, and their approach allows the city control over zoning and planning activities in targeted areas “that give developers the canvas on which to work.” For example, “as far as our River’s Edge redevelopment area goes, we came in with a zoning overlay to try to steer development in a certain direction and to try and get a bit more density there,” he says.

The average developer reimbursement obligation for brownfield redevelopment projects is 8.36 years, Hatton reports. “We don’t just offer up 20 or 25 years,” he says. Hatton also stresses that “size is relative.” The city tackles many projects that run from 100s of thousands of dollars to 10s of millions. “In our minds, they are still big projects” that take advantage of marketable opportunities and match the specific needs of Kalamazoo as a unique community.

In conclusion, Hatton reports that strong partnerships and relationships with the Michigan DEQ, developers, banks, and businesses at “a local level” is one of the keys to Kalamazoo’s success. Loans are not coming easily in Michigan these days, which he says is one of the biggest “challenges;” however more brownfield redevelopment projects are currently underway and Kalamazoo is still pushing forward. Hatton attributes much of this to the relationships the department has established.

Case Study in Economic Retention:
Catalyst Development Company 3 LLC, $31.5 Million

“Economic development is at a minimum about retention,” Hatton says. Miller Canfield’s Kalamazoo law office was being courted to leave the city, and though “some may view the number of employees as relatively small, we think they are significant.” The 76 positions at Miller Canfield represent the type of people “who have lunch, meetings, do some shopping, or go to dinner downtown. These kinds of things wouldn’t happen otherwise,” he says. The revamping of Catalyst Development Company 3’s properties succeeded in “retaining the business community that was already here,” according to Hatton. The construction of a larger building—with a higher taxable value—and a new parking structure, was completed in 2008. Miller Canfield’s Kalamazoo law office relocated into a 32,000-square-foot suite on the top two floors. “We’re pleased to be a part of Kalamazoo’s renaissance,” Miller Canfield Resident Director John R. Cook said in a press release. “This new building represents our commitment to the community, while the state-of-the-art facility will allow us to expand and provide services to clients around the block and around the world."

Top: Before, MacKenzie’s was a vacant lot.

Bottom: The MacKenzie’s vision was the start of redevelopment along the river.

Case Study in Long-Term Growth:
MacKenzie’s Bakery, $774,000 for Two Projects

Hatton highlights MacKenzie’s Bakery owners John and Mary MacKenzie as “urban pioneers,” whose vision for Kalamazoo’s River’s Edge area has manifested in a number of ways. “Mr. MacKenzie came into the River’s Edge area at a time when only he and a few others had a vision that it could be something great,” he says. In large part, the MacKenzies’ initial vision for the riverfront has led it to be a target for long-term redevelopment. Since the bakery developed the vacant parcel in 1998, other unique—and you could even call them fun—businesses have popped up in the River’s Edge redevelopment, like the SmartShop Metal Arts Center. “We hope the area will create residential development, and bring in new businesses,” that will continue to transform the neighborhood into a “funky, eclectic area,” according to Hatton. MacKenzie’s added Wi-Fi and introduced freshly blended coffee from Water Street Coffee Joint. The bakery also expanded in 2007, which “indicates the long-term potential of the area. This project is our only project that has since had a second generation brownfield redevelopment at the same location, which is fairly unique,” Hatton says.

The DEQ removed the worst of the contamination. Plazacorp Realty Advisors, Inc, purchased buildings from the city and redeveloped the Spearflex block.

Case Study in Brownfield Cleanup:
Spearflex Block, $7.1 Million

Another major aspect of Kalamazoo’s Brownfield Redevelopment Initiative (BRI) is to manage contamination or clean it up when necessary. In general, the city takes a “risk-based approach” to managing contaminated locations. In the case of the Spearflex Block, the Michigan Department of Environmental Quality (DEQ) removed the worst of the worst,” he reports. “The DEQ left us with a site where we could sell the buildings that were there, even though they were not in great condition. They were still usable.” The buildings were sold to Plazacorp Realty Advisors, Inc. The company developed them for new uses, including the Shakespeare’s Pub and the Spearflex building, which is being used for office space. “If you can manage the exposures in a way that is protective of human health and the environment, you can still develop projects even though there is contamination. Ultimately, “you have to marry the site with its intended use,” according to Hatton.

Case Study in Community Commitment:
Borgess/Textile Systems Inc (TSI), $5.7 million

Textile Systems Incorporated, an industrial laundry facility and subsidiary of Borgess Hospital, is a Phoenix Award winner for “community impact”—acclaim it received at the 2002 National Brownfield Conference. TSI packed up operations and moved closer to its employees when many were having issues related to commuting to and from the company that was located some distance away from where the majority of employees resided. “Much of its workforce lives near its current location,” and “they have also had some great expansion, early on—much greater than they had anticipated,” Hatton says. He thinks the commitment that TSI has shown its employees has “impacted the community quite heavily,” on top of benefiting the company financially.


Left: TSI chose a .92 acre city-owned brownfield property for the future site of its new facility. Right: Faced with labor challenges and production limitations, TSI decided to relocate to Kalamazoo because of its proximity to its workforce and markets.

For more information about Kalamazoo’s Brownfield Redevelopment Authority, the Brownfield Redevelopment Initiative (BRI), and to see a copy of the city’s brownfield plan, visit kalamazoo.org and click on business then brownfields.

Jennifer Eberbach is a freelance journalist and professional copywriter. You may contact her at 734-929-2964 or jen@jenthewriter.info. Visit her online at www.jenthewriter.info.


 

 

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