What’s happening: Nearly two years after an abrupt halt to a scheduled groundbreaking, Sawmill Lofts, Michigan Community Capital’s development project at 100 Michigan Ave., is moving forward with a boost in funding from the MEDC.
The Sawmill Lofts project will redevelop a vacant lot across the railroad tracks from the Crawford County Courthouse in downtown Grayling into a nearly 40,000-square-foot, five-story building with more than 3,000 square feet of commercial space and 42 new apartments.
The project also received a letter of interest from the Michigan State Housing Development Authority for a $3.5 million Missing Middle Grant, which, if approved, would allow some of the apartments to be earmarked for year-round residents who earn 120 percent or less of the county-area median income.
In Crawford County, 120 percent of the area median income is $63,600 for a one-person household, $72,720 for a two-person household, and $81,840 for a three-person household. Prospective tenants would have to prove the household makes less than these amounts in order to qualify to live in the Lofts.
“It has taken more than four years working with strong local and state partners to bring this project to life,” says Marilyn Chrumka, vice president of developments for MCC. “This multi-family building, with high quality, moderately priced apartments, is a crucial step to bring housing for workers in growing industries to attract and retain talent in the region.”
Why do we care: Visitors and residents alike should enjoy the new project, which overlooks the banks of the AuSable River.
Once completed, the newly constructed building will offer large storefronts, and a residential lobby and lounge on the first floor. The upper four floors will be a mix of studio, one-bedroom, and two-bedroom floorplans with some apartments overlooking the river. Residential amenities will include onsite parking, electronic key access, an elevator, onsite staff and leasing office, and the resident lounge. Tenants will also be able to easily walk to downtown conveniences and local trails.
Identified as a priority site for redevelopment by the city, the new housing is expected to support a variety of residents, including employees hired by surrounding growing businesses.
The backstory: MCC owns the land and has been working on a development plan there for years. Once the site of an antique mall and the weekly newspaper offices, an earlier dry cleaning business left the area a brownfield, requiring cleanup before reuse.
A $1 million grant from the Michigan Department of Environment, Great Lakes, and Energy brownfield incentive programs assisted with environmental remediation; a $1.4-million brownfield tax increment financing plan through the city of Grayling and Crawford County helped remediation as well.
A variety of other funding was in place for the project when the groundbreaking was announced in September 2021. But the plan came to a screeching halt when construction costs skyrocketed in the weeks before the prices were locked in, Chrumka says. Within six weeks, costs ballooned 30 percent, Chrumka says, stalling the project until more funding could be secured.
Who’s paying for it now: Total project costs are now projected to be approximately $15 million, about $3 million more than the estimated cost in 2021 when the project was originally set to break ground.
The recent announcement of the $5 million RAP Grant award was enough to close the gap. Administered by MEDC, this program provides access to real estate and place-based infrastructure development gap financing in the form of grants of up to $5 million per project for real estate rehabilitation and development.
With current support provided by developer Michigan Community Capital (MCC); Michigan Economic Development Corporation (MEDC); Michigan Department of Environment, Great Lakes, and Energy (EGLE); IFF (the project lender), and brownfield plan approval by the city of Grayling and Crawford County, the project is back on track, Chrumka says.
“With rising costs of labor and materials, and increasing interest rates, it’s getting more expensive to build and more expensive to finance, Chrumka says. “So it was really important that we received these various resources from the state.”
What’s next: Integrated Architecture has been selected as the architect, and has updated renderings for the site; site preparation and remediation have been taking place under the supervision of Triterra Environmental.
Pending all final approvals, construction could begin as soon as the weather permits in the spring. The anticipated opening of Sawmill Lofts is set for the summer of 2025.
Rosemary Parker has worked as a writer and editor for more than 40 years. She is a regular contributor to Rural Innovation Exchange, UPword, and other Issue Media Group publications.