Overton demolition file photo

Demolition work at the former Overton factory is shown above in 2015. The condemned factory building was demolished by the city of South Haven, which plans to use the site for affordable housing.

After two months of negotiations, South Haven city officials have inked a deal with a developer to buy six acres of land and the former Overton factory.

City council members, on Monday, voted unanimously to approve the purchase agreement with Chicago-based Habitat Co. for $100,000.

The developer has proposed to build a 144-unit housing complex in three stages over a 10-year period.

Council members also approved an agreement to forego charging Habitat property taxes on the first construction phase in exchange for the company paying the city 3 percent per year on rent that Habitat charges for each housing unit.

Two percent would be divided among the city’s taxing units, while 1 percent would go to the city as compensation for police and other municipal services used in relation to the additional housing units.

The next step in the affordable housing project will involve Habitat’s site plan, which will be considered by the city’s planning commission.

“The Habitat Co. must submit an application for site plan review and planned unit development approval before Nov. 30,” City Manager Kate Hosier said. The planning commission will then study the application over the next several months.

As of right now, Habitat plans to pay the city $40,000 to build the first phase, which will consist of an L-shaped 58-unit, three-story apartment building with onsite parking, landscaping and open areas fronting Elkenburg Street next to Indiana Avenue.

Construction would begin sometime in 2023 on the apartment complex, which would consist of 40 one-bedroom units, 11 two-bedroom units and seven three-bedroom units. In 2025, the developer would pay the city $20,000 for the second phase, which would consist of 26 two-bedroom townhomes that would be sold.

Habitat would then have until 2030 to pay the city the remaining $40,000 to develop the third phase, which will entail 60 apartments comprised of one- to three-bedroom units.

The complex will be targeted mainly to people whose income levels are lower than the federal government’s area medium income for Van Buren County.

In the county, the median income level for a single person is $54,200, according to the Michigan State Housing and Development Authority.

Forty-seven percent of Habitat’s proposed rental and for-sale units will be for people whose incomes are 40-60 percent of the AMI; 22 percent will be for those with incomes of 40 percent or less; with the remaining units earmarked for people whose incomes are 60-120 percent of the AMI.

As part of the purchase agreement, Habitat also is agreeing to develop a Brownfield Plan to mitigate environmental contamination and adhere to Michigan Department of Environment, Great Lakes and Energy (EGLE) guidelines in doing so.

Remaining questions

Last month, several residents questioned how remaining contamination at the site would be addressed.

When the city acquired the factory building and property in 2015, the city’s Brownfield Redevelopment Authority and Local Development Finance Authority oversaw the initial cleanup of the site.

Habitat will now be tasked with coming up with a plan to reduce exposure to any existing contamination on the site, according to David Warwick, co-owner of Envirologic Environmental Consulting Services of Kalamazoo.

“Right now (environmental testing) is in the early stages,” he said. “Once the due diligence is finished, (Habitat) will make a proposal to the city on minimizing and containing that risk.”

Although the city council made the decision Monday to approve the purchase agreement with Habitat, several council members acknowledged the exact number of housing units could change when the site plan is put in front of the city’s planning commission.

Since The Habitat Co. announced its plans to develop the housing complex, some residents have expressed concern over the high number of housing units.

One of those residents has been Dan Agnello, who lives close to the proposed housing development. Agnello was at Monday’s meeting to again question the number of housing units proposed for the project.

“I don’t like the density,” he said. “(Habitat) said they could make money on 60 units. I wish you guys would roll back the density.”

South Haven resident Mary Lynn Bugge expressed similar thoughts, pointing to a similar income-based housing development – Park Meadows – located in South Haven Township.

“They have 66 units on 11 acres. I wish you would do more diligence on this (Habitat) proposal,” she said.

However, another resident, David Veenstra, said he does not have a problem with Habitat’s proposal.

“I’m still waiting for a reason why high density is so bad,” he said. “Lower density limits the number of people we can help to obtain affordable housing.”