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Square One: Veridea Exits Houghton Development Project

The Houghton Lakeshore Drive redevelopment project is back to step one.

Last night, the Veridea Group of Marquette, which had been selected as the city’s development partner, officially withdrew. City Manager Eric Waara read the company’s letter at the beginning of a special city council work session devoted to the project…

“It is clear that the city has no defined process in place that can move this project forward at this time. Further, it seems clear that the council may decide to create another community input process that will potentially change critical development parameters for the site. This is disappointing, especially in light of the fact that we have invested several hundred thousand dollars to date.”

Company officials said they would consider re-engaging with the project, if the city adopts a clear process for proceeding, and if the discourse can be civil…

“We recognize that a development project of this magnitude deserves close scrutiny and active public participation. However, it should not devolve into the spreading of misinformation, false data, outright lies and personal attacks, as has been the conduct of many of the opponents of this project. Challenge our plans, not our people and their integrity.”

Waara admitted that he was surprised at the late opposition to the process, considering how little attention it had attracted from the public in its early phase…

“The council, the planning commission and the DDA talked a lot about what went into that [request for qualifications] in public, in several meetings. It’s just a shame that people didn’t come to some of those meetings, and, heck, some nights, again, I think I said this before, there was only one or two people in the audience. And, it’s a bigger shame that I didn’t appreciate that lack of information leading to such a level of mistrust out there once things actually started to happen.”

The Veridea withdrawal leaves the city with an aging parking deck that will cost millions to maintain or replace.

The city parking fund is not self-supporting. Waara said that one-sixth of the property tax millage collected by the city each year goes to maintain parking, with most of that used for the big deck. Parking already costs the owner of a $100,000 home in the city $127 per year.

Allocating more general fund money toward the increasing costs of maintaining an aging deck, or borrowing millions to replace it, would require additional tax revenue, or force significant cuts in city services. 

The cost of tearing the deck down and not replacing it is estimated at more than $1 million.

Waara said grants are not available for maintenance of existing structures, would cover only a fraction of the cost of replacement construction, and often need to be tied to a wider redevelopment project.

That opened the door for one potential solution.

Julien Properties has several projects underway in downtown Houghton, including the new Vault Hotel, the recent purchase and ongoing renovation of the Franklin Square Inn, and the proposed construction of an additional downtown hotel…

“These projects combined have created a new opportunity for the public community to benefit from the Brownfield Redevelopment Project through Tax Increment Financing opportunities that were not an option two years ago. We have explored using the TIF benefits in a way that could fund the parking deck redevelopment.”

Jon Julien said that his company would need to take over a small portion of the city’s parking deck property, but that most of the land could remain under city ownership. Julien Properties was one of the three original companies in the running to become the city’s development partner for the project.

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