Hovey's Proposed Ayer Street Project On Caving Land

IRONWOOD, MI - Monday, July 07, 2008 - A site plan review will be required before Hovey's Towering Pines Ayer Street, 49-unit, low-income housing project can be approved by the Michigan State Housing Development Authority (MSHDA). According to an October 08, 1998 City document obtained by the Chronicle through a Freedom of Information Act (FOIA) request, the City was fully aware that the property sold to Hovey --  a DeWitt, Michigan developer -- was unstable and not suitable for building.

According to the document written by former Community Development Director, Will Andresen, "The City has no intention of developing this area due to concerns of future cave-ins." At the time the memo was issued, the Lighthouse Faith Center was requesting the parcel for their church complex. At that time, the City warned the Faith Center that the property would not be suitable for building.

The memo also states that Silver Properties "appraised" the land. According to the supporting documentation to the "appraisal," no appraisal was done. A letter from Jeffery Hautala dated October 01, 1998, made it very clear that an appraisal was not done on the property. Instead, Hautala did a Market Analysis.

 

According to City Ordinance, surplus real property is required to be appraised before it is sold. This was not done, nor was the property put up for competitive bids.

Hovey purchased the property, without earnest money or deposit, on a two-year option, which is set to expire in December. The City passed an Ordinance giving the DeWitt Michigan developer a 2% Payment In Lieu of Taxes (PILOT) deal which removes all property tax liabilities for the project, except a $9,000/year cash payment to the City.

The Towering Pines project is projected to cost over $5,000,000. By agreeing to the PILOT tax exemption, the City of Ironwood, excused hundreds of thousands of dollars in potential tax revenues that would benefit Gogebic County, the Ironwood Area Schools, the Gogebic Community College, the City of Ironwood, the Carnegie Library, the Civic Center, HOPE, and every other entities that rely on property taxes for revenue.