After months of closed door sessions, Lowell City Council agreed to almost all the demands of the Unity School Investors in exchange for them dropping current and future legal claims against the city.
Without any discussion and with a unanimous 4-0 vote, councilmembers approved a resolution to purchase 238 High Street, which is adjacent to the library, at a cost of $225,000 as well as vacate half of High Street. A second resolution, which will swap land from Riverside Park for a rectangular parcel alongside the former Unity bus garage, must sit for 20 days before the council can approve it.
During their regular meeting, Lowell City Council also discussed the Showboat, a possible water and sewer authority with the township and agreed to put a former Lowell Light & Power line shack that sits along the Flat River out for bid. Prior to their regular meeting, the council held a Committee of the Whole to discuss water and sewer rates.
All councilmembers were present except Cliff Yankovich who was out of town. At the start of the meeting, Mike DeVore was reappointed by the council as Mayor and Jim Salzwedel was chosen as Mayor Pro Tem.
Inflationary Increases Expected for Sewer and Water
At the 5:30pm Committee of the Whole, councilmembers heard a presentation regarding a rate study conducted on the city’s water and sewer systems. Andy Campbell, a municipal financial advisor from advisory firm Baker Tilly, was on-hand to discuss the study results.
“When we look at this compared to a lot of communities in the state, you’re in good shape,” Campbell said. He noted his firm has served more than 400 communities and been involved in 130 Stormwater, Asset Management and Wastewater (SAW) program reviews, of which this rate study is one.
While the current sewer and water systems are in overall good condition, ongoing maintenance and repair projects will be needed to keep in them in that state. The city has also identified two areas of groundwater infiltration into the wastewater system and needs to take action to eliminate the infiltration.
The rate study recommends inflationary increases of 2% per year for the sewer system, which would increase the typical homeowner’s monthly bill of $42.64 by less than a dollar. A larger increase of 6.5% for the first year is proposed for the water system. That would increase the typical homeowner’s monthly bill of $34.93 by about two dollars. After the first year, water rates would increase annually by 2% to account for inflation. Campbell said the city’s current rates are in the midrange of what is charged by communities statewide.
As part of a 10-year capital improvements plan, the city is expected to take out $8.6 million in bonds. Although that money will be used for sewer and water system improvements, these projects will include roadwork to replace street surfaces that must be removed to access pipes. For instance, sewer repairs on Washington Street in 2021 and Monroe Street in 2022 will result in new roadways there.
Old Business: Showboat, Water/Sewer Authority and LLP Line Shack
The agenda for last night’s regular meeting, held at 7pm, included three pieces of old business.
Showboat: The first was regarding an issue with the plans for the new Showboat. It was revealed at a city council meeting last month that the current engineering plans were written in such a way that the second floor of the boat would not have an 8-foot finished height as was expected. Instead, as written, the finished height would be shorter.
City Manager Mike Burns said he spent 50 hours trying to track down why the mistake with the floor height wasn’t caught earlier. It was determined that the information provided by the Showboat Committee to the marine engineer C Fly Marine did not clarify that the eight feet was meant to be the finished height. C Fly Marine noted that standard practice is to measure heights deck to deck so when they were asked to make the second floor eight feet, they included that height in their engineering drawings without any finishes.
The cost to change the drawings is $10,000, and $5,000 of that will be paid out the money raised by Rotary and the Lowell Area Chamber of Commerce for the Showboat project. The other $5,000 will be absorbed by Chris Chamberlin, who is serving as the city’s representative on the project.
Moran Iron Works could not say exactly how much the change of plans would add to the project cost, but at this time, the change order is expected to be 3.3% of the project total. Burns was hopeful that the company would be willing to work with the city to minimize the expense, particularly in light of the fact that the city decided not to require a performance bond for the project.
Water/Sewer Authority: At a previous Committee of the Whole, Lowell City Council discussed the possibility of extending the city’s sewer and water lines south to I-96 to facilitate development there. The idea of creating a water and sewer authority that would be jointly owned by the City of Lowell and Lowell Charter Township was also discussed.
In order to create an authority, Lowell Charter Township would need to buy into the system, and it was determined the city water and sewer facilities should be appraised to help determine an appropriate buy-in price.
At last night’s meeting, Burns said the cost to do a full evaluation of the system would be $37,500. Developer Sid Jansma offered to pay $10,000 of the cost with the remaining amount to be split between the city and township. However, councilmembers declined to approve the expenditure. They noted the authority and any service extension would solely benefit the developer or township at this time and so the cost of the study should be absorbed by them.
Line Shack: To wrap up the old business portion of the agenda, Lowell City Council agreed to sell a building that previously served as a line shack for Lowell Light & Power. The building is no longer in use and located on Riverside Drive along the Flat River.
The city will begin accepting bids on the building shortly, with a minimum bid of $100,000 required. Burns asked if councilmembers wanted to use a restricted covenant to limit what type of business could be established at the location, but the council did not believe that was necessary.
City Settles Unity School Investors Lawsuit
In what promises to be the end of a protracted legal battle, Lowell City Council approved one resolution to settle a lawsuit with developers Jerry Zandstra and Todd Schaal and signaled their intent to pass a second resolution regarding the matter at their next meeting.
Zandstra and Schaal own the former Unity High School property at 219 High Street and are developing it into condominiums. They also own a separate parcel at 238 High Street, which is the green space to the north of the library building.
Lowell Light & Power has utility lines under 238 High Street. The lines were placed there with the consent of Lowell Area Schools, which owned the parcel at the time, but no formal easement was established.
The developers initially tried to bill the city $1.53 million in rent for the lines, and the city responded by initiating eminent domain proceedings. That resulted in a countersuit from the developers. According to information provided by Burns last year, the developers never contested the necessity of the eminent domain issue but did believe the property was worth more than the $60,000 Lowell Light & Power put in escrow to reimburse them for the strip of land containing the lines. Kent County records indicate 238 High Street has a fair market value of $64,400.
Although 238 High Street is not part of the condominium development, dubbed RiverView Flats, the legal settlement will give developers some much-desired land for their condominium project. It also meets many of the requests made by developers after a March 2019 meeting they had with Burns and Councilmember Marty Chambers in Grand Rapids.
As approved by Lowell City Council last night, the resolution contains the following major provisions:
- The city will purchase 238 High Street for $225,000. Of that, $60,000 will be covered by the escrow funds from Lowell Light & Power, and the remaining amount will be paid by the Downtown Development Authority. Lowell Light & Power will pay back the authority over a five year period at an interest rate of 1.75%.
- The city will vacate the northern half of High Street between Monroe Street and the Flat River and give that property to the Unity School Investors. Burns did not have an estimate on the value of the roadway being given to the investors.
- Subject to approval by the state, the city will give developers a 7×263 foot strip of land which is in front of the former bus garage and currently part of Riverside Park. In exchange, the city will receive a 10×50 foot portion of land in the southwest corner of 219 High Street. The city assessor and Michigan Department of Natural Resources must deem the parcels to be of equal value. Burns says the value of the seven foot wide strip is $1,800.
The land transfer in the settlement is a variation of what was originally proposed by developers when they suggested giving the city 3,300 square feet in exchange for the 1,800 square foot strip. The Parks and Recreation Commission expressed concern over that swap and declined to give their endorsement to the proposal.
Since RiverView Flats is a planned unit development, or PUD, it required a special site plan review process. During that process, the Planning Commission approved the plan with the requirement that the developers provide parking on 238 High Street. What’s more, a portion of the Unity High School building encroaching on High Street was to be removed.
Normally, when a PUD undergoes a major change, it must return to the Planning Commission for review and approval. However, Burns says the changes to the PUD boundaries will be considered minor and approved by staff. Presumably, city parking lots will absorb the loss of the 18 parking spaces that developers were to provide on 238 High Street for RiverView Flats residents.
The final step in the process is a vote on the land transfer. The City Charter requires a 20 day review period before city property can be transferred so that portion of the settlement cannot be approved until the council’s next meeting.
In exchange for all the above, Zandstra and Schaal agree to drop their lawsuit against the city and waive any future claims against the city, Lowell Light & Power, Lowell Area Schools and Comcast/Xfinity pertaining to 219 and 238 High Street.
In a written statement provided after the meeting, Schaal said, “We have had some bumpy spots but my business partner, Jerry Zandstra, and I have worked with some members of the City Council to get to a solution that works for everyone.”
Since Monday, January 20, is Martin Luther King Jr Day, the next regular meeting of Lowell City Council will be held on Tuesday, January 21, 2020.