Here are my vote explanations from the Monday, February 28, 2022 City Commission meeting. A detailed explanation of my vote on the proposed redevelopment of the former Marquette General Hospital property in central Marquette follows. As always, please reach out to me with any questions at (906) 236-0247, firstname.lastname@example.org, or on Facebook. You can also watch the meeting video at https://www.youtube.com/watch?v=YjZ1Tiwc3nc
MOU w/ NMU Foundation on Fmr. Hospital Property Redevelopment: YES (Passed 7-0)
Amdt. to Require Employment of Local Trades Program Apprentices: YES (Passed 6-1)
This was a vote on a Memorandum of Understanding, or MOU, between the City and the NMU Foundation, which is a nonprofit entity that is NOT the same thing as Northern Michigan University. This MOU is a non-binding agreement which is the first step in the redevelopment of the former hospital property in central Marquette, which is currently owned by Duke LifePoint. Contrary to what some have claimed, this MOU did not include Duke LifePoint as a party, and NMU is not buying the former hospital property. The NMU Foundation is temporarily acquiring the property, assuming significant risk, so that they can work with the City to facilitate its future private redevelopment and return it to the tax rolls – it is NOT being purchased by NMU as many people seem to believe.
Again, this MOU is not a binding contract, and it does not commit the City Commission to approving a future Brownfield Plan. The City Commission and the public will be presented with a detailed, legally binding Brownfield Plan for this site in the next few weeks or months, and we will work with the NMU Foundation as they go through the process of public engagement and selecting a developer for the property. However, as the MOU explicitly states on page 3, “Any future binding contract between the parties [i.e., a Brownfield Plan] will require the approval by resolution of the Marquette City Commission and the City of Marquette Brownfield Redevelopment Authority.” This future Brownfield Plan will also include many more concrete details and firm commitments than this preliminary MOU.
This MOU does commit the NMU Foundation to ensuring that, at a minimum, the future master developer of the property builds a significant amount of “affordable and workforce housing as described in the City’s Ad Hoc Housing Committee Final Report.” That Final Report and its definitions of affordable and workforce housing were unanimously approved by the Housing Committee and the City Commission in 2021. I am 100% certain that myself and many of my fellow Commissioners will require more specific, firm affordable housing commitments from the developers and the Foundation before approving any future Brownfield Plan for this project. Thanks to an amendment offered by Mayor Pro Tem Mayer, the future master developer of the property will also have to employ apprentices in licensed local trades programs to help redevelop the site. I also hope that a provision can be included in the Brownfield Plan which requires that the developer pay prevailing wages to workers on this entire project – at the very least, the City has already committed to paying prevailing wages for all City components of the project.
I’ve heard some residents asking why a Brownfield Plan is necessary to redevelop this property; why the developer or the City can’t just pay for the demolition, renovation, and clean-up costs; or why the City can’t simply apply for some grants to cover those costs.
In fact, there are potentially millions of state and federal grant dollars that were partially dependent on the City approving this MOU last night. Duke LifePoint has also offered up $10 million to help with the redevelopment of the property once they transfer it to the NMU Foundation for a nominal price of $1.00. However, the reality is that the City could never hope to obtain enough funding from grants alone to cover the massive costs involved in revitalizing the former hospital property.
There is severe lead and asbestos contamination on the property, and it is also “functionally obsolete,” which qualifies it as a Brownfield site under state law. Most buildings on the property are in poor condition and would be extremely expensive to renovate – that is why the hospital relocated to a new location back in 2015, rather than renovate the existing facility. The demolition, renovation, & clean-up costs alone would exceed the entire annual City budget of around $20 million. For the same reason, no private developer could ever profitably redevelop this property without Brownfield Tax Increment Financing (TIF) to reimburse them for eligible expenses like clean-up, demolition, and infrastructure. In addition, grant funding will also probably be needed to help cover the huge costs involved.
The honest truth is that if we ever want to see the former hospital property redeveloped, private investment and a Brownfield Plan are going to be necessary – there is no getting around that fact, the numbers speak for themselves.
I have also heard other legitimate questions from City residents. Isn’t the City facing a budget deficit right now? Isn’t the City currently getting tax revenue from the old hospital property? Aren’t Brownfield Plans partially responsible for the City’s current budget deficit? The simple answer to all of these questions is yes, but we need to look at the details behind these simple answers before coming to premature and incorrect conclusions.
By delaying the point at which Brownfield redevelopments start paying property taxes into the City general fund, Brownfield Plans do play a role in the City’s structural budget deficit. Any observers of City politics in the past 2 years will know that I have voted against recent Brownfield Plans that I did not feel were in the best interests of City taxpayers and regular Marquette residents, and I have not been the only City Commissioner to do so.
However, the real problem is that the City hasn’t raised taxes in over a decade, while at the same time losing millions in tax revenue from the Presque Isle Power Plant closure and Tax Tribunal and “dark store loophole” appeals. The City Commission has not yet decided how to fill the $1.9 million hole that still remains in our budget even after last year’s budget cuts, and we do need more public input before making any final decisions. But the can has been kicked down the road long enough, and has landed in the current Commission’s lap. The choice we now face is between finding some form of new revenue until these Brownfield projects start paying taxes into the general fund, or making deep cuts to City services for the next decade or more. It is not legally possible for the City to just go back on past Brownfield Plans, as some residents have suggested – that would be an illegal violation of legally binding contracts.
And yes, the old hospital property currently generates about $150,000 in tax revenue for the City each year, but even ignoring other community benefits like affordable housing, new public spaces, and the huge long-term increase in tax revenue from redeveloping the property, the reality is that a Brownfield Plan would give the City over $4 million in new revenue to upgrade City infrastructure in that neighborhood, which is far more than the roughly $2.25 million we would otherwise get from that property over the next 15 years. We also need to consider that, if this property is not redeveloped soon, Duke LifePoint could (and probably would) simply cut their losses, relocate their on-site staff, and claim a property tax exemption, depriving the City of even the minimal tax revenue we currently receive from the former hospital property. Finally, after 15 years, the taxes generated from this property would be far, far greater than they are now – the total private investment in this property will be $160 million (NOT $650 million, as was inaccurately reported by local news media today). This investment is equal to about 12% of the entire City tax base (the total value of all private property in the City of Marquette was about $1.366 billion in 2020). That means taxes for all City residents could potentially be lowered in the future, while still providing enough revenue to balance the City budget, provide better City services, and maintain our City parks & infrastructure.
During public comment, some residents claimed that this MOU would potentially create additional legal liability for the City. These concerns stemmed from a clause in the MOU which states that the City could potentially acquire parts of the property from the NMU Foundation. However, this clause was referring to the potential (though certainly not guaranteed) use of the City of Marquette as a very short-term “pass-through” entity for parts of the former hospital property, in order to unlock potential benefits which require property to be publicly owned, like down payment assistance for low-income homeowners or certain grant funds for affordable housing or public spaces. This would NOT occur until after clean-up, demolition, and development was 100% complete, and would thus create zero liability for the City or City taxpayers. In any case, it is likely that the Marquette County Land Bank would be used as a “pass-through” entity for these purposes if necessary, rather than the City of Marquette itself.
There were also some concerns raised about a City commitment in the MOU to fund an environmental assessment of the site at a cost of $52,900 – money which one resident claimed “the City doesn’t have right now” due to the City’s budgetary issues. However, that $52,900 environmental assessment has actually already been completed, and was funded entirely by the Local Brownfield Revolving Fund, a separate, relatively small fund which is directly controlled by the Marquette Brownfield Redevelopment Authority, not the City Commission. The Brownfield Revolving Fund is intended to be used specifically for expenses like this environmental assessment, and it cannot simply be “raided” by the City Commission to subsidize the City budget. No general City taxpayer dollars were spent on that environmental assessment.
As I mentioned before, I have voted against Brownfield Plans that I felt were not in the best interest of our community. However, when looking at all the facts, I have found no convincing argument that this project, as currently proposed, would not be fiscally responsible or that it would not benefit the local neighborhood and regular Marquette residents & taxpayers. To summarize:
– This project would dramatically increase City tax revenue in the long run, potentially enabling future tax cuts & improvements to City services, facilities, and infrastructure, and in the short run it would also provide millions of dollars for City infrastructure improvements in the vicinity of the former hospital property.
– It would, at a minimum, produce a significant amount of affordable and workforce housing, which is an urgent community need in Marquette, and would also potentially include other community benefits like new public spaces, senior housing, childcare, and new economic opportunities.
– Rather than “ruining the community” or negatively impacting the local neighborhood, this project would do the opposite – it would meet numerous community needs and improve local property values. Passing up this unique opportunity, and instead letting the old hospital continue to sit vacant and crumble into a blighted eyesore in the heart of Marquette, would actually ruin our community and actually reduce property values in the surrounding neighborhood.
We still need to gather more public input and hold the NMU Foundation and the future developers of the property accountable to their commitments. And as was stated multiple times at the meeting last night, this MOU is just the first step in the process and doesn’t commit the City to anything. But if done correctly, it is clear that this project would be a truly once-in-a-generation opportunity that benefits all Marquette residents, and I see no reason why the City Commission should oppose it if the commitments in this MOU are genuinely met. That is why I voted Yes on this MOU, and why I’m committed to making sure this project is done correctly and with plenty of public input.
If you have questions, concerns, or ideas about the former hospital redevelopment, please come to a future City Commission meeting or one of the future public input sessions that will be hosted by the NMU Foundation, or reach out to me directly at (906) 236-0247 or email@example.com. I want to hear from you so I can make the best decisions possible for Marquette.
Place Iron Ore Heritage Trail Millage Renewal on August 2022 Ballot: YES (Passed 7-0)
This was a common-sense Yes vote for me, in which the Commission merely voted to renew the existing Iron Ore Heritage Trail millage, and place that millage renewal on the August 2022 ballot for the approval of City voters. This is a millage renewal, so it will not raise anyone’s taxes, and it will support the incredible regional recreational asset that is the Iron Ore Heritage Trail. I would urge all City residents to join me in voting Yes on this millage in August!