Benton Harbor City Commissioners have approved a tax abatement for a project to transform part of the former All Phase Electric building at 875 Riverview Drive into new office space.
Commissioners heard this past week from property owner Eric Hansen, who has announced plans to turn about 20,000 square feet of the building into enough space for about 80 office workers. Hansen was seeking a 12-year tax Obsolete Property Rehabilitation District and Certificate to help recoup some of his $2.5 million investment. His company, 975 Riverview LLC, acquired the building in 2019 and has already invested heavily in it. But Hansen said the site needs more work.
“It’s going to take a significant amount of work, and that’s why I invited everybody to the building to take a look at it because as you go through it, everything’s destroyed and needs complete renovation,” Hansen said. “So, in order to get it up to 2023 codes, all of the HVAC needs to be redone. The HVAC equipment back in 2018, I think, was all stolen off the back and removed from the property, so it doesn’t have any HVAC systems in there. That’s about an $800,000 loan just to redo that HVAC. So we’re requesting to not be taxed on that by putting that back on. That’s part of the $2.5 million project.”
Hansen said the property also needs new parking lots, windows, and exterior work.
The abatement would freeze the site’s taxes at their current rate for a 12-year period. Once the 12 years are up, the taxes would go up to reflect the increase in the property’s value. Hansen said this development will be another boost for the Riverview Drive Corridor following the recent approval of a more than $20 million federal grant to upgrade infrastructure.
“So the combination of both of these things, us taking care of the private portion on the very southern part, is going to attract investors. It’s going to attract other business. It’s going to start increasing the amount of activity that’s going to be down there.”
Commissioners had several pointed questions, including whether Hansen would accept the OPRA designation for a shorter period. He said he needs the full 12 years for the project to be economically viable. Mayor Marcus Muhammad said the city around 2013 approved an OPRA certificate for another project at that site, but it never proceeded.
“Here we are 13 years later, arguing about the same thing while the building is doing nothing, while we have an opportunity to get the building developed, get people in there working, get income tax dollars, get a water customer, and add value to that corner,” Muhammad said.
Muhammad warned a city denial of the tax abatement would send a bad message to developers.
“So, I’m submitting to this council if we don’t move forward and allow development to take place on Riverview, the message that we’re sending is that the federal government just awarded us a $23 million, $24 million BUILD grant for Riverview. Somebody here wants to develop and put money on Riverview, and we’re saying no. We’re not moving forward with development because we don’t have enough information. And if that’s the type of sign and signal that we want to send out to businesses, that’s sad. And it’s going to deter development and people from coming to invest in this city.”
Commissioners also had questions about the assessed value of the property, whether there’s yet a site plan for the development, and whether it’s had a review from the planning commission.
Commissioner Edward Isom said after committee review, he’s all for the project.
“We got a developer coming to us with his own loot, his own money, and wants to do something,” Isom said. “The building has been sitting there for a long time. So I can support this and I can see great things happening.”
Commissioners approved the creation of the OPRA district unanimously at Tuesday’s meeting but then split 5-4 on the project-specific certificate, narrowly approving it. Voting no were Commissioners Juanita Henry, Emma Kinnard, Ethel Clark-Griffin, and Mayor Pro Tem Shaquille Turner.
Hansen said previously he has two potential leasers lined up for the office space. Part of the building is also currently leased to the Freedom Boat Club.
Cornerstone Alliance Senior Vice President Andrew Haan said at Tuesday’s meeting the final approval of the OPRA certificate for the project will rest with the state.
