ITHACA — Gratiot County commissioners on Nov. 3 approved a plan that lets a developer recover future property taxes for building 19 homes in the Lakeside Estates subdivision in Pine River Township. The vote on Resolution 26-470 was 3-2, seven weeks after the board tabled the plan so residents’ questions could be answered.
The record at a glance
- The vote: Commissioners George Bailey, Tim Gay and Chair Dave Owens voted yes. Commissioners Jan Bunting and Steve Sopocy voted no (recording, 55:43).
- A motion to wait: a motion to postpone the vote “until after this board has received unbiased training on this matter” was defeated when commissioners answered aloud, two in favor and three opposed (recording, 37:19).
- The plan: 19 homes on vacant lots; four would be income-restricted rentals for 10 years. The plan’s listed figures total $2,404,849, captured over an estimated 24 years (our Sept. 21 report).
- The conditions: the resolution caps tax capture at 30 years and makes approval “contingent upon an executed Reimbursement Agreement” (Resolution 26-470).
- Public comment: leaders from Alma, Ithaca, St. Louis, Ashley and Pine River Township, two business owners and an Alma resident spoke for the plan. Two Lakeside Estates residents and another resident spoke against it.
What the board approved
The resolution says the county’s Brownfield Redevelopment Authority recommended the plan, dated Aug. 13, 2026, on Aug. 18, and that the Pine River Township Board adopted resolutions supporting it the same day. It finds that the plan “constitutes a public purpose” and that its costs are “reasonable and necessary.” It estimates the plan’s duration at 24 years and says capture shall not “extend beyond thirty (30) years” (Resolution 26-470).
The tax capture works this way: the property taxes the 19 lots pay now keep going to the county, schools and township. The new taxes the finished homes generate are captured to repay the developer’s eligible costs, with interest, instead of going to those budgets. The plan was prepared for Michigan Housing Partnership, LLC; the builder is Allen Edwin Homes (our Sept. 21 report).
The developer’s answers
At the Sept. 15 hearing a resident handed the board 20 written questions. The packet for Nov. 3 includes written answers attributed to Allen Edwin Homes (Developer questions and answers). Among them:
- Would it be built without the tax capture? “But for the TIF approval, this project will not move forward.”
- The developer’s return: the company says its financial projection shows an average cash-on-cash return of about 5.29% with the tax capture, and 1.38% without it, “making the project no longer feasible.”
- How much is for the four restricted homes: $766,320, which the answers say is about 36.8% of all eligible activities.
- The $2,041 rent: the answers say it is the state housing authority’s 100% area-median rent for a four-bedroom home, $2,425, minus a $384 utility allowance. The state’s review “will not occur until after it is approved locally.”
- Rentals: “of the 19 new homes planned, six are slated to be rentals.” Short-term rentals are prohibited. After 10 years, the restricted homes “could be rented or sold at market rates.”
- Roads and water: the answers say the master deed describes the subdivision road as public but the county has not accepted it as a public road, and that the homes would use municipal sewer and private wells.
- Schools: the answers say the homes would generate $598,562 for the Alma school district’s debt millage, which the plan does not capture.
How the commissioners argued it
Bailey made the motion to approve and Gay supported it. Bailey said he had worked on similar financing “for many, many years” with Greater Gratiot Development and that the risk sits with the builder: “It’s on the contractor to finish this project.” He added, “This money would be made available over 20-some years, 24 years possibly” (recording, 40:00).
Sopocy asked his colleagues, “do you all understand the ramifications of what this is?” He questioned whether new homes would bring students, saying a school superintendent told him the falling birth rate is the problem, and said, “I’ll be an old man if I’m lucky to live that long” before the county sees revenue from the homes (recording, 39:49). He suggested the county instead offer existing homeowners grants of $100,000 toward building new homes: “if we’re willing to give away all this tax money, why don’t we give it to the people who already live in here” (recording, 44:00).
Bunting spoke about residents struggling to pay property taxes. She said the county treasurer had told her about 2,000 people are behind on their taxes, about 500 have reached the third year, when a home can be lost, and that there were 32 foreclosures last year and 12 the year before. Another commissioner said there is “a big difference” between those numbers; Bunting replied, “I’m just telling you what she told me” (recording, 45:37). She also spoke about people in the county without housing and about wind-turbine revenue she said the county never received.
While Bunting was speaking, Bailey called the question, and the two exchanged words. One board member told Bunting that what she had said was true “and it’s sad” but did not bear on the resolution, and the board voted to end debate (recording, 52:20). Before the roll call, Bunting said, “I’m now going to be with the FBI about what’s going on in this county.” She did not say what she would report (recording, 54:02).
What the public said
For the plan. Ryan Smith of Gemini Capital Management, a Breckenridge developer that has used tax-increment financing in the county, asked the board to review each proposal carefully and to approve those that make their case. His letter in the packet says, “If we want more housing options, we must be willing to use the tools that help get them built” (Gemini Capital Management letter).
Alma City Manager Aeric Ripley said the city paid up front for water, sewer and roads at its Gemstone subdivision, then carried those costs after the developer went out of business in the 2008 crash; he said eight or nine of the 42 lots remain. Tax-increment financing, he said, shifts that risk to a developer (recording, 10:42). Ithaca City Manager Jamey Conn said the city has seen three houses built in its Westwind subdivision in 20 years: “what they’re proposing is to build exactly what we’ve built in 20 years, in six months” (recording, 14:11).
Ashley’s village president said a developer wants to put 18 homes on 11 village acres: “Our school is hurting, we need students” (recording, 15:29). The Pine River Township supervisor said, “if you’re not growing, you’re dying,” and, “The risk, if there is risk, is entirely on the developer” (recording, 18:55). St. Louis’s assistant city manager said the city supports the approach for a planned 19-unit project in the old commercial bank building downtown (recording, 26:02).
Greg Mapes of Alma told the board, “It’s move-up housing,” meant to free up starter homes (recording, 7:07). Bill Henderson of Aircraft Precision Products, who said he lives in Isabella County, said the subdivision “has a look of a stalled project” and that his grandson, who is taking over the business, bought a home outside the county (recording, 16:50). Letters from United Way of Greater Central Michigan and Realtor Marci Browne also supported more housing (United Way letter).
Against the plan. A resident who has spoken against the plan before said he agrees the county needs houses, but “if they’re so eager to give up tax money, let’s reduce the tax rates on the people that already live here” (recording, 3:20).
A Lakeside Estates resident said, “I believe in the need for it, but the location is wrong.” He said “It makes no sense to me to build cookie-cutter housing in an established neighborhood of custom-built houses,” objected to the share of rentals, and said of the private road, “The road is already in bad shape and it’s going to fail” (recording, 9:04).
Another Lakeside Estates resident said that for those who built there, “It was about building a custom home and a dream to have a nice development.” She said residents expect to pay part of the cost of a new road, and that comparison with the new homes would lower their own homes’ value (recording, 22:05). Henderson, speaking earlier, had said the term cookie-cutter homes “may be overstated.”
Ties to Greater Gratiot Development
Greater Gratiot Development, the county’s millage-funded economic development group, lists Lakeside Estates first among six “current housing projects being proposed in Gratiot County.” The others are Gemstone in Alma, Westwind Estates in Ithaca, the water tower site in Ashley, Downie Street in Alma and the corner bank building in St. Louis. That list is in the group’s Sept. 18 board minutes, which the county filed in the Nov. 3 packet (Greater Gratiot Development minutes). The leaders from Alma, Ithaca and St. Louis each described a project on that list.
The board’s chair and several of the plan’s supporters sit on Greater Gratiot Development’s board, according to the same minutes. Chair Owens, who voted yes, is listed among the board members present on Sept. 18, and he made two motions that day. So are Mapes, Henderson, Browne and Ripley. Conn is listed as a board member who was absent. Bailey told the board he had worked on tax-increment financing with Greater Gratiot Development for years. When the chair asked at the start of the Nov. 3 meeting whether anyone had a conflict of interest to declare, no one did (recording, 1:30). Serving on the group’s board is not in itself a conflict of interest, and the minutes do not say how members are chosen.
What comes next
The approval takes effect once a reimbursement agreement is signed. The developer’s answers say the state housing authority reviews the project only after local approval. At the end of the meeting, Kasey Zehner of Greater Gratiot Development offered commissioners more sessions on the program and said a consultant who assists other counties is available (recording, 58:20).
What we do not know yet
- The terms of the reimbursement agreement, and when it is signed.
- Who will pay for the subdivision road, and whether the county will accept it as public.
- The county treasurer’s own figures on delinquent taxes and foreclosures, which Bunting cited secondhand.
Corrections and responses are welcome.