St. Joseph City Commissioners have approved the creation of a Neighborhood Enterprise Zone for the new Marquette on Lake Boulevard residential and commercial development planned downtown.
Commissioners were told Monday that Neighborhood Enterprise Zones are allowed under a 1992 state law seeking to encourage community redevelopment. With an NEZ in place for the Marquette, the developers will pay roughly half of the state’s average millage rate on the apartments portion of the building for 15 years.
Mayor Brook Thomas said this project will benefit the city on multiple fronts.
“Sounds like maybe this would be a short-term sacrifice that we would be losing out on some tax money in honor of a long-term investment to get the project up and running, get it there, get the residents in, bring in people,” Thomas said.
Commissioners were told that with construction costs up around 31% over the past ten years, developers are having to use incentives like NEZs and brownfield plans to secure financing and keep rents on their projects down once finished. Commissioner Michael Sarola said that even with the tax reduction heading to the Marquette, the project represents an investment for the city that would generate approximately $250,000 in taxes its first year.
“That will increase 2% a year through those 15 years that the brownfield TIF is in place as well, and then when we get to the end of the 15 years, the tax revenue on that parcel is going to be seven figures, considerably more than a million dollars,” Sarola said.
Under the NEZ model, school taxes lost as a result of the lower millage rate paid by the building owner are reimbursed to the affected schools by the state. Also, the NEZ applies only to the building, and not the property the building is on.
Commissioners voted unanimously to approve the NEZ for the Marquette. The question now has to be reviewed and approved by the state.
Commissioner Michael Fernandez suggested Monday the city should look at other potential NEZ sites around the city to encourage more development.
As we’ve reported, the Marquette on Lake Boulevard, if completed, will include 68 apartments, 32 condos, a rooftop deck, commercial space on the ground, and two stories of underground parking with 180 spaces at the corner of Lake Boulevard and Pleasant Street. Back in October, Peter Reinks of the Reinks Group told commissioners he was expecting financing for the Marquette to be in place in early 2026 and ground to be broken around May or June of 2026. The project would be complete two years after groundbreaking.
You can learn more about Neighborhood Enterprise Zones here.
