Houghton Approves Commercial Rehabilitation District for 109 Shelden Avenue

Houghton has passed a resolution to change 109 Shelden Avenue to a Commercial Rehabilitation district. 109 Shelden Avenue more known as the Kirkish Building, has been vacant for nearly a decade. Last year L & Z Rentals purchased the property for creating a mixed-use development at the center of the city. Commercial Rehabilitation Districts in Michigan were created in 2005 to encourage rehabilitation projects by abating property taxes for a set period.

The project to this point has been a collaborative effort between the property owner, KETA, SBDC, that is the Small Business Development Center, Invest UP, the Houghton County Brownfield Authority, Michigan Economic Development Corporation, a local bank, and the city. The project will redevelop the building as a mixed-use development and add nine apartments to our downtown. Getting to this point has taken nearly two years. However, the plans are in place, funding is lined up, and the project is moving toward the finish line. – Eric Waara, City Manager, City of Houghton

Following a public hearing before regular agenda items, the council approved the commercial rehabilitation district for L & Z Rentals. If also approved by Houghton County, the next step for the property owner will seek approval for the district from the Michigan Department of Treasury. If approved the property could see a tax abatement for up to 10 years. After which it will be taxed at the full redeveloped value.

What does the City get out of this in the meantime? A once-empty building receives a major investment and becomes an active part of our downtown. The building adds to our available housing opportunities and will bring new residents. An existing business can expand and new shop space is created. A blighted building gets cleaned up, the lights are on, and at the end of the planned period, the taxable value of our DDA increases. – Eric Waara, City Manager, City of Houghton

After the property owner gains approval from the state L & Z Rental will be issued a Commercial Rehabilitation Certification. If the first certificate is issued for less than 10 years, the property owners may seek an extension. But cannot exceed 10 years in total. The property will still pay school operating and state education taxes percentages.