Fenton's Cornerstone Project took another large step toward reality Thursday as the Fenton City Council and the Downtown Development Authority approved an agreement necessary to move forward with the project.
For the last 18 months, the Fenton DDA and Corlin Builders have worked together to develop the Cornerstone Project and now have a final outline of an agreement and are ready to continue plans.
"I think it is going to be a great project," Mayor Pro-Tem Cheryl King said. "I think you are going to see a lot more happening downtown as part of our vision."
Corlin Builders will develop a four story, mixed-use building at a total cost of $4.7 million. The building will have restaurant and retail space on the first floor, along with one and two bedroom apartments on the upper three floors. Corlin Builders will finance $2.2 million for the project and also invest $800,000 in equity.
Corlin Builders have also applied for funding through the Michigan Community Revitalization Program and officials have tentatively agreed to fund $880,000 for the project, with $440,000 as a grant and $440,000 as a low interest loan. The funding is still subject to approval from the Michigan Strategic Fund. The project is unlikely to begin until the money is approved.
"We are all on the same page, we are just waiting for it to come together," said Ghassan Saab of Corlin Builders.
In order to receive funding from the State of Michigan, Corlin Builders must have ownership of a piece of property, the parking lot in front of the old Republic Bank. The City Council approved a quit claim deed on the property Thursday and the DDA accepted the deed on the property.
The groups also approved an agreement for the redevelopment of the site.
Corlin Builders and Fenton officials also came to a ground lease agreement to protect the city for the construction phase of the project. The DDA will retain the real estate until the project is complete. An initial rental of $500 would be charged for an 18-month lease and would increase to market value—around $25,000 a year—after 18 months. Once the project is complete and a certificate of occupancy is issued, the ownership would transfer to the Corlin Builders for $1.
The agreement also includes the following DDA assistance:
- Grant of $330,000 from DDA to Corlin Builders to assist with construction costs.
- The DDA will demolish the former Republic Bank building at an approximate cost of $20,000.
- The DDA will construct a municipal parking lot at the east end of the building for an approximate cost of $175,000.
- The DDA will reimburse Corlin for remaining architectural and engineering cost, totaling $231,670.
The total investment by the DDA for the project is approximately $581,000. The DDA's funds only kick in when 60 percent of the leases for the building are signed and that is also when the ground lease would begin.
That investment does not include the parking lot, but the DDA and City Council approved planning specifications for three parking lots last summer and plan to use the $300,000 in revenue that was not re-appropriated after terminating the lease with Michigan Brewing Company and money left over from the Master Plan Implementation in 2012. The total DDA investment would be around $1 million.
The annual reimbursement for the city of Fenton would be $128,000 for property taxes, including $56,000 for Fenton Area Public Schools.
"It's one of those projects that cities should always want to get," DDA Chairman Craig Schmidt said. "You have the city, private investors and state funding. These are the projects all communities should have. You can't get it any better."
The agreement is not the final agreement as there are some moving parts, said city attorney Stephen Schultz. He said many of the terms and conditions are laid out, however, and Fenton officials will worked toward creating a final document for the agreement.
Construction is expected to start in the spring.
"This is very exciting. I think this is the first time since 1970 we are going to have a new building downtown," Fenton Mayor Sue Osborn said.