SOUTH HAVEN — Like the Biblical story about the battle of Jericho, the walls of the buildings along the downtown Hale block will soon come tumbling down.
South Haven City Council members on Monday voted in favor of a $428,000 tax incentive plan that will essentially allow local developer Randy Locker of Locker & Locker LLC to demolish several dilapidated buildings in the Hale block – including the historic former Hale Department Store – and conduct lead and asbestos abatement.
When the buildings in the 200 block of Center are torn down, what will remain is a three-story brick structure that will be renovated into a multi-use commercial and residential development by 2021, and the building that houses Johnny’s Jewelry Store and Decadent Dogs, which fronts Phoenix Street.
City Manager Brian Dissette said the latest tax incentive plan for Locker approved by the city council will eventually pay off for economic development efforts downtown.
“Not less than two years ago, staff was preparing a plan for if and when the city would be forced to demolish the Hale block,” Dissette said. “We were greatly concerned about the potential cave-in of the roof, sidewalks and some of the foundations. For us to be sitting here today not having to tap public funds to clean up the block, to be using private funds, and then abating some of those costs is something as a staff we are excited to see coming forward. That doesn’t even speak to the excitement of commercial and residential development downtown.”
The latest financial incentive the city is using to encourage Locker to make a $2.7 million investment in revitalizing the block is somewhat complicated.
Locker first had to seek approval from the city’s Brownfield Redevelopment Authority to include the majority of the Hale block as a brownfield site eligible for tax increment financing revenue. The authority did so, but another hurdle had to be cleared.
Because the property is located in the Downtown Development Authority tax increment financing district, the DDA had to give its blessing to allow the Brownfield Redevelopment Authority to collect captured tax revenue from the Hale block property for Locker to be able to pay for the cost of tearing down the old buildings and removing lead and asbestos.
Locker will initially pay for the demolition and environmental abatements to the block. He will then seek reimbursement through 75 percent of property tax increments that would normally go to the DDA.
It is expected to take up to 30 years to recapture the funds through tax increment revenues and Local Brownfield Revolving Fund.
Earlier this fall, city council granted Locker & Locker a 10-year commercial rehabilitation tax break that will exclude the development from paying property taxes on the $2.7 million investment, but not the taxes currently being charged.