Brownfield Plan. For the. Huron-Main Revitalization Project Huron and Grand River Avenues Port Huron, Saint Clair County, Michigan

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1 Brownfield Plan For the Huron-Main Revitalization Project Huron and Grand River Avenues Port Huron, Saint Clair County, Michigan CITY OF Port Huron City of Port Huron, Saint Clair County, Michigan Brownfield Redevelopment Authority Prepared with the assistance of: Associated Environmental Services, LLC 6001 North Adams Road, Suite 205 Bloomfield Hills, Michigan Approved by the Brownfield Redevelopment Authority on: Approved by City Council on:

2 TABLE OF CONTENTS I. INTRODUCTION AND PURPOSE 3 II. GENERAL DEFINITIONS AS USED IN THIS PLAN 4 III. DESCRIPTION OF PROJECT 4 IV. THE PROPERTY ADDRESSED IN THIS PLAN IS ELIGIBLE PROPERTY 7 V. BROWNFIELD PLAN REQUIREMENTS OF M.C.L (1) 10 A. Description of Costs to Be Paid for With Tax Increment Revenues B. Brief Summary of the Eligible Activities C. Estimate of Captured Taxable Value and Tax Increment Revenues D. Method of Financing and Description of Advances by the Municipality E. Maximum Amount of Note or Bonded Indebtedness F. Duration of Brownfield Plan G. Estimated Impact of Tax Increment Financing on Revenues of Taxing Jurisdictions H. Legal Description, Property Map and Personal Property I. Estimates of Residents and Displacement of Families J. Plan for Relocation of Displaced Persons K. Provisions for Relocation Costs L. Strategy for Compliance with Michigan s Relocation Assistance Law M. Description of Proposed Use of Local Site Remediation Revolving Fund N. Other Material that the Authority or Governing Body Considers Pertinent ATTACHMENTS Attachment A Legal Description of Eligible Property Attachment B Site Plan/General Concept Plan Attachment C Estimated Tax Increment Revenues Attachment D Assessor Certificate of Blighted/Functionally Obsolete Status & Description of Site Conditions Attachment E Reimbursement Agreement Page i of i

3 PROJECT SUMMARY Project Name: Project Location: Basis for Eligible Property: Eligible Activities: Reimbursable Costs: Years to Complete Payback: Estimated Eligible Investment: Huron-Main Revitalization Project comprised of four subprojects or phases Huron and Grand River Avenues, south of McMorran and north of Quay Street, Port Huron, Michigan Blighted and/or Obsolete Phase I Environmental Site Assessment (ESA), Phase II ESA, Baseline Environmental Assessment (BEA), 7a Due Care Plan, Brownfield Plan, Act 381 Work Plan, Hazardous Materials Assessment, Lead Based Paint Abatement, Asbestos Abatement, Interior Demolition and Remedial Activities. $2,402, (including 5% interest) 29 years $5,050,000 ($4,200,000 of building/improvements and $850,000 personal property) Annual Tax Revenue Before Project: $40,693 Annual Tax Revenue After Project: $171,462 in Year 3 (the 1 st year of fully completed project) Total Capture for BRA: $2,402,424 Total Capture for RLF: $208,482 Project Overview: Landmark Port Huron, LLC plans to re-develop the existing multi-story properties into four mixed-use developments with retail, office and residential uses known as the Huron-Main Revitalization project that encompasses multiple properties on approximately three (3) acres of land. The buildings are located north of Quay Street, south of McMorran Boulevard, east of Superior and west of Michigan in Port Huron, Saint Clair County, Michigan. The development has been subdivided into four phases that will be completed simultaneously or nearly simultaneously in quick succession. All four phases will consist of retail space on the first floor with office and loft apartments located on the remaining floors of each building. Page 1 of 17

4 Appropriate environmental measures will be implemented to prevent exposure of hazardous materials to human health, safety, and the environment. The total investment is estimated at approximately $4,461,000 for the Huron-Main Revitalization properties as contained in this Plan. According to Landmark Port Huron, LLC s, research the industry standard for job creation is one (1) job for every two to three-hundred ( ) square feet of retail or office space. However, Landmark Port Huron, LLC s job creation estimate within this Plan is calculated using a more conservative approach estimating that one (1) job will be created for every approximately 1,250 square feet for the entire project. Based on this more conservative approach, the new development should create as many as fifty-one (51) initial jobs with an estimated first year payroll of up to approximately $1,000,000 within the City, plus the creation of approximately twenty-seven (27) temporary construction jobs with an average estimated payroll of up to approximately $840,000 annually resulting from the construction planned on the Property. This Plan has been prepared to provide for Tax Increment Financing, including School Tax Capture, for reimbursement of eligible costs and application for Brownfield MBT Credits, Part I which has already been submitted to the MEDC/MEGA for consideration. Page 2 of 17

5 I. INTRODUCTION AND PURPOSE The City of Port Huron, Saint Clair County, Michigan has established a Brownfield Redevelopment Authority pursuant to the provisions of the Brownfield Redevelopment Financing Act, M.C.L et seq. This Brownfield Plan applies to the proposed Huron- Main Revitalization Project within the boundaries of the City of Port Huron, Saint Clair County, Michigan. According to information provided by Landmark Port Huron, LLC, the project is being developed in multiple sub-projects or phases. The proposed redevelopment is described as being comprised of four distinct developments each comprised of multiple property addresses and parcels collectively identified as the Huron-Main Revitalization located on Huron and Grand River Avenues south of McMorran and north of Quay Street ( Property ). The Property is currently developed land containing multiple story buildings previously occupied by retail, restaurant and office uses, but is currently mostly vacant and underused. The Property is comprised of multiple tax parcels legally described as follows (legal information obtained from City of Port Huron Assessing Records): Addresses and Legal Parcels for the Proposed Huron-Main Revitalization Development Building Name Address Parcel ID Number Ballentine Building 1st fl Sq ft 2nd & 3rd fl sq ft Total Square Footage Per Address 202 Huron ,000 12,000 19, Huron Huron ,400 3,700 6, Huron ,000 4,000 8,000 Total Square Footage per Building 33,100 Huron-Michigan Building 216 Huron ,000 4,000 7, Huron ,000 6,000 9, Huron 203 Michigan and ,300 1,600 7,900 23,900 Cavis Building 230 Huron ,000 7,000 16,000 16, Michigan Penny's & HAC Building 311 Huron Huron ,605 9,559 39, Huron Huron Huron ,000 3,800 8, Huron ,964 The Property is currently mostly developed land with existing multiple story buildings. It is the intent of Developer to qualify the Property as eligible under Public Act 381 of 1996, as amended, due to the blighted and obsolete condition of the buildings. Please see Attachment A for additional legal description information. It is the intent of the parties to allow this Plan to be amended as necessary to facilitate the overall development of the Huron-Main Revitalization project. Page 3 of 17

6 The purpose of this Plan, to be implemented by the Authority, is to satisfy the requirements for a Brownfield Plan as specified in the Brownfield Redevelopment Financing Act, P.A. 381 of 1996, as amended, to authorize tax increment financing (TIF) of eligible activities, and to authorize the application for Michigan Business Tax Brownfield credits or its replacement incentive program, if available, at the option of Developer. II. GENERAL DEFINITIONS AS USED IN THIS PLAN All terms used in this Brownfield Plan are defined as provided in the following statutes, as appropriate: The Brownfield Redevelopment Financing Act, 1996 Mich. Pub. Acts 381, M.C.L et seq., as amended. The Natural Resources and Environmental Protection Act, 1994 Mich. Pub. Acts 451, M.C.L et seq., as amended. III. DESCRIPTION OF PROJECT The proposed redevelopment is described as being comprised of four (4) distinct developments each comprised of multiple property addresses and parcels collectively identified as the Huron- Main Revitalization located on Huron and Grand River Avenues south of McMorran and north of Quay Street in Port Huron, Saint Clair County, Michigan ( Property ). The Property is currently developed land containing multiple story buildings previously occupied by retail, restaurant and office uses, but is currently mostly vacant and underused. The buildings comprising the Property require extensive exterior and interior renovation to bring them up to current building codes, including compliance with handicap accessibility, as well as to a rentable standard. The required improvements include, but are not limited to, repairing and replacing windows, replacing and adding HVAC to all areas necessary, installing new elevators, major roof repairs, and reconfiguring all interior wall spaces. Required renovations also include removing asbestos containing materials (ACM), removing rotten and water damaged wood, removing wall coverings to expose natural woodwork and brick, and restoring exterior facades. Further obsolescence can be found in the building designs that were configured for office space in the upper floors and now need to be converted to residential space, which is the highest and best use of these buildings in a walkable urban downtown. Other issues with design include the redesign of first floor office and retail spaces as they were most recently renovated in the 1960's through the1980's, which does not fit the current needs of modern retail and office businesses. This project includes the complete renovation of multiple properties located in the core of Port Huron's Central Business District. The large number of vacant properties in Port Huron s downtown led to deteriorated consumer confidence for patronizing downtown establishments. The Huron-Main Revitalization project will improve the downtown experience on multiple levels by creating a great amount of community excitement, instill renewed consumer confidence and create a critical mass of both residential and commercial uses downtown thus creating more Page 4 of 17

7 activity around the clock. The new offerings of retail shopping clusters, restaurants and entertainment venues draw in other businesses and investors who see renewed economic opportunities downtown. The following summaries describe each of the planned phases of the project: Huron-Main Revitalization - Cavis Building 230 Huron Avenue and 217 Michigan Avenue, Port Huron, St. Clair County, Michigan The Cavis Building project represents the renovation of two buildings totaling approximately 16,000 square feet. The buildings are historic and will have their historic features preserved as part of the proposed redevelopment. Approximately 9,000 square feet will be redeveloped as retail, restaurant, and commercial office use with the remaining 7,000 square feet being used for constructing eight (8) residential loft apartments on the upper floors. The estimated costs of restoration, alteration, renovation and improvement of buildings by Developer are approximately $636, In addition, it is estimated that the tenant businesses will be making additional investments in equipment, receivables, payroll, inventory and start up expenses that will total $211,000 in derivative economic impact from the project. Eligible environmental costs are estimated by Developer to be at least $77,000. This includes the cost of interior demolition, asbestos removal, mold remediation, lead based paint removal, clean up of a vast amount of pigeon droppings and repair of water damage. The costs of curing the functional obsolescence s is even greater and is estimated to be at least $418,422. Eleven (11) new permanent jobs and twenty-seven (27) construction jobs will be created from this redevelopment effort. Developer anticipates that the annual payroll for the 11 permanent jobs will exceed industry averages because Developer is targeting logistics, international trade and homeland security businesses to locate in the commercial spaces. The 27 construction jobs will be created over the estimated fourteen (14) month construction period. Huron-Main Revitalization - Ballentine Building 202, 204, 206 and 208 Huron Avenue, 411 and 415 Quay Street and 107 Michigan Avenue Port Huron, St. Clair County, Michigan The Ballentine Building project represents the renovation of three buildings totaling approximately 37,100 square feet. The buildings are historic and will have their historic features preserved as part of the proposed redevelopment. Approximately 13,400 square feet will be redeveloped as retail, restaurant, and commercial office use with the remaining 23,700 square feet being used for constructing twenty-one (21) residential loft apartments on the upper floors. The estimated costs of restoration, alteration, renovation and improvement of buildings by Developer are approximately $1,847,985. In addition, it is estimated that the tenant businesses will be making additional investments in equipment, receivables, payroll, inventory and start up expenses that will total $923,990 in derivative economic impact from the project. Eligible environmental costs are estimated by Developer to be at least $221,758. This includes the cost of interior demolition, asbestos removal, mold remediation, lead based paint removal, clean up of a vast amount of pigeon droppings and repair of water damage. The costs of curing the functional obsolescence s is even greater and is estimated to be at least $940, Thirty (30) new permanent jobs and twenty-seven (27) construction jobs will be created from this redevelopment effort. Developer anticipates that the annual payroll for the 30 permanent jobs will exceed industry averages because Developer is targeting logistics, international trade and homeland security businesses to locate in the commercial spaces. The 27 construction jobs will be created over the estimated fourteen (14) month construction period. Page 5 of 17

8 Huron-Main Revitalization Penney s and HAC Building 311, 313, 315, 319 and 321 Huron Avenue, 310 and 312 Superior Mall Port Huron, St. Clair County, Michigan The Penney s and HAC Building project represents the renovation of three buildings totaling approximately 47,964 square feet. The buildings are historic and will have their historic features preserved as part of the proposed redevelopment. Approximately 34,605 square feet will be redeveloped as retail, restaurant, and commercial office use with the remaining 13,359 square feet being used for constructing eleven (11) residential loft apartments on the upper floors. The estimated costs of restoration, alteration, renovation and improvement of buildings by Developer are approximately $999,253. In addition, it is estimated that the tenant businesses will be making additional investments in equipment, receivables, payroll, inventory and start up expenses that will total $600,000in derivative economic impact from the project. Eligible environmental costs are estimated by Developer to be at least $199,910. This includes the cost of interior demolition, asbestos removal, mold remediation, lead based paint removal, clean up of a vast amount of pigeon droppings and repair of water damage. The costs of curing the functional obsolescence s is even greater and is estimated to be at least $699,626. Seventy-one (71) new permanent jobs and twenty-seven (27) construction jobs will be created from this redevelopment effort. Developer anticipates that the annual payroll for the 71 permanent jobs will exceed industry averages because Developer is targeting logistics, international trade and homeland security businesses to locate in the commercial spaces. The 27 construction jobs will be created over the estimated fourteen (14) month construction period. Huron-Main Revitalization Huron-Michigan Building 216, 218 and 220 Huron Avenue and 203 Michigan Avenue Port Huron, St. Clair County, Michigan The Huron-Michigan Building project represents the renovation of four buildings totaling approximately 18,000 square feet. The buildings are historic and will have their historic features preserved as part of the proposed redevelopment. Approximately 9,000 square feet will be redeveloped as retail, restaurant, and commercial office use with the remaining 10,700 square feet being used for constructing nine (9) residential loft apartments on the upper floors. The estimated costs of restoration, alteration, renovation and improvement of buildings by Developer are approximately $976,918. In addition, it is estimated that the tenant businesses will be making additional investments in equipment, receivables, payroll, inventory and start up expenses that will total $140,000 in derivative economic impact from the project. Eligible environmental costs are estimated by Developer to be at least $125,000. This includes the cost of interior demolition, asbestos removal, mold remediation, lead based paint removal, clean up of a vast amount of pigeon droppings and repair of water damage. The costs of curing the functional obsolescence s is even greater and is estimated to be at least $747,459. Twenty (20) new permanent jobs and twenty-seven (27) construction jobs will be created from this redevelopment effort. Developer anticipates that the annual payroll for the 20 permanent jobs will exceed industry averages because Developer is targeting logistics, international trade and homeland security businesses to locate in the commercial spaces. The 27 construction jobs will be created over the estimated fourteen (14) month construction period. A. Community Impact / Public Benefit The public benefit of incenting the project is the redevelopment of obsolete and blighted properties with the resulting increase of property taxes and the creation of new permanent jobs in downtown Port Huron as well as temporary construction jobs over the estimated fourteen (14) to eighteen (18) month construction period. Page 6 of 17

9 According to Landmark Port Huron, LLC s, research the industry standard for job creation is one (1) job for every two to three-hundred ( ) square feet of retail or office space. However, Landmark Port Huron, LLC s job creation estimate within this Plan is calculated using a more conservative approach estimating that one (1) job will be created for every approximately 1,250 square feet for the entire project. Based on this more conservative approach, the new development should create as many as fifty-one (51) initial jobs with an estimated first year payroll of up to approximately $1,000,000 within the City, plus the creation of approximately twenty-seven (27) temporary construction jobs with an average estimated annual payroll of up to approximately $840,000 resulting from the construction planned on the Property. Other public benefits include making the central business district a more livable and walkable area, bringing year round residents to the CBD and filling in multiple store fronts with new retail establishments and commercial offices. The new economic activity will be of great public benefit to a community with 22% unemployment, over 20% poverty rate and a 30% commercial vacancy rate downtown and a 60% vacancy rate on the second and third floors of existing buildings. Further, properties in the general area of the development are more likely to be perceived as development ready and attract additional users/developers as the main impediments to redevelopment will have been eliminated by the creation of a critical mass of residents and business. IV. THE PROPERTY ADDRESSED IN THIS PLAN IS ELIGIBLE PROPERTY The Brownfield Redevelopment Financing Act, Public Act 381 of 1996, as amended, is: AN ACT to authorize municipalities to create a brownfield redevelopment authority to facilitate the implementation of brownfield plans; to create brownfield redevelopment zones; to promote the revitalization, redevelopment, and reuse of certain property, including, but not limited to, tax reverted, blighted, or functionally obsolete property; to prescribe the powers and duties of brownfield redevelopment authorities; to permit the issuance of bonds and other evidences of indebtedness by an authority; to authorize the acquisition and disposal of certain property; to authorize certain funds; to prescribe certain powers and duties of certain state officers and agencies; and to authorize and permit the use of certain tax increment financing. The Brownfield Redevelopment Financing Act defines eligible property to include property that was used or is currently used for commercial, industrial, or residential purposes that is in a qualified local governmental unit, that is owned or under the control of a land bank fast track authority, or that is located in an economic opportunity zone, and is a facility, functionally obsolete, or blighted... M.C.L (m). Eligible property includes personal property located on the property. Id. M.C.L (e) "Blighted" means property that meets any of the following criteria as determined by the governing body: Page 7 of 17

10 (i) Has been declared a public nuisance in accordance with a local housing, building, plumbing, fire, or other related code or ordinance. (ii) Is an attractive nuisance to children because of physical condition, use, or occupancy. (iii) Is a fire hazard or is otherwise dangerous to the safety of persons or property. (iv) Has had the utilities, plumbing, heating, or sewerage permanently disconnected, destroyed, removed, or rendered ineffective so that the property is unfit for its intended use. (v) Is tax reverted property owned by a qualified local governmental unit, by a county, or by this state. The sale, lease, or transfer of tax reverted property by a qualified local governmental unit, county, or this state after the property's inclusion in a brownfield plan shall not result in the loss to the property of the status as blighted property for purposes of this act. (vi) Is property owned or under the control of a land bank fast track authority under the land bank fast track act, whether or not located within a qualified local governmental unit. Property included within a brownfield plan prior to the date it meets the requirements of this subdivision to be eligible property shall be considered to become eligible property as of the date the property is determined to have been or becomes qualified as, or is combined with, other eligible property. The sale, lease, or transfer of the property by a land bank fast track authority after the property's inclusion in a brownfield plan shall not result in the loss to the property of the status as blighted property for purposes of this act. (vii) Has substantial subsurface demolition debris buried on site so that the property is unfit for its intended use. M.C.L (n) Except as otherwise provided in this subdivision, "eligible property" means property for which eligible activities are identified under a brownfield plan that was used or is currently used for commercial, industrial, public, or residential purposes, including personal property located on the property, to the extent included in the brownfield plan, and that is 1 or more of the following: (i) Is in a qualified local governmental unit and is a facility, functionally obsolete, or blighted and includes parcels that are adjacent or contiguous to that property if the development of the adjacent and contiguous parcels is estimated to increase the captured taxable value of that property. (ii) Is not in a qualified local governmental unit and is a facility, and includes parcels that are adjacent or contiguous to that property if the development of the adjacent and contiguous parcels is estimated to increase the captured taxable value of that property. (iii) Is tax reverted property owned or under the control of a land bank fast track authority. (iv) Is not in a qualified local governmental unit, is a qualified facility, and is a facility, functionally obsolete, or blighted, if the eligible activities on the property are limited to the eligible activities identified in subdivision (m)(vi). (v) Is not in a qualified local governmental unit and is a facility, functionally obsolete, or blighted, if the eligible activities on the property are limited to the eligible activities identified in subdivision (m)(vii). M.C.L (m) "Eligible activities" or "eligible activity" means 1 or more of the following: Page 8 of 17

11 (i) Baseline environmental assessment activities. (ii) Due care activities. (iii) Additional response activities. (iv) For eligible activities on eligible property that was used or is currently used for commercial, industrial, or residential purposes that is in a qualified local governmental unit, that is owned or under the control of a land bank fast track authority, or that is located in an economic opportunity zone, and is a facility, functionally obsolete, or blighted, and except for purposes of former section 38d of the single business tax act, 1975 PA 228, the following additional activities: (A) Infrastructure improvements that directly benefit eligible property. (B) Demolition of structures that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (C) Lead or asbestos abatement. (D) Site preparation that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (E) Assistance to a land bank fast track authority in clearing or quieting title to, or selling or otherwise conveying, property owned or under the control of a land bank fast track authority or the acquisition of property by the land bank fast track authority if the acquisition of the property is for economic development purposes. (v) Relocation of public buildings or operations for economic development purposes. (vi) For eligible activities on eligible property that is a qualified facility that is not located in a qualified local governmental unit and that is a facility, functionally obsolete, or blighted, the following additional activities: (A) Infrastructure improvements that directly benefit eligible property. (B) Demolition of structures that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (C) Lead or asbestos abatement. (D) Site preparation that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (vii) For eligible activities on eligible property that is not located in a qualified local governmental unit and that is a facility, functionally obsolete, or blighted, the following additional activities: (A) Demolition of structures that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (B) Lead or asbestos abatement. (viii) Reasonable costs of developing and preparing brownfield plans and work plans. (ix) For property that is not located in a qualified local governmental unit and that is a facility, functionally obsolete, or blighted, that is a former mill that has not been used for industrial purposes for the immediately preceding 2 years, that is located along a river that is a federal superfund site listed under the comprehensive environmental response, Page 9 of 17

12 compensation, and liability act of 1980, 42 USC 9601 to 9675, and that is located in a city with a population of less than 10,000 persons, the following additional activities: (A) Infrastructure improvements that directly benefit the property. (B) Demolition of structures that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL (C) Lead or asbestos abatement. (D) Site preparation that is not response activity under section of the natural resources and environmental protection act, 1994 PA 451, MCL M.C.L (r) "Functionally obsolete" means that the property is unable to be used to adequately perform the function for which it was intended due to a substantial loss in value resulting from factors such as overcapacity, changes in technology, deficiencies or superadequacies in design, or other similar factors that affect the property itself or the property's relationship with other surrounding property. The Activities Identified In the Plan Are Eligible Activities. The eligible activities are identified in Section V(B) of this Plan. The Property Was Used for Commercial Purposes. For many years, the Property was occupied by numerous retail, office and other business uses. The Property has been determined to be a Functionally Obsolete as well as meets the definition of Blighted as those terms are defined under Public Act 381 of 1996, as amended due to the condition of the properties as well as the general design, layout and interior build-out of the buildings. As the City of Port Huron is a Qualified Local Governmental Unit and designated as a Core Community, the Functionally Obsolete and Blighted status of the Property is relied upon for qualifying the site as an eligible property. Based upon the foregoing, the eligible property identified by this Plan is therefore eligible under P.A. 381, as amended, for reimbursement of the planned activities. V. BROWNFIELD PLAN REQUIREMENTS OF M.C.L (1) M.C.L (1) requires several items to be included in a brownfield plan. These items are addressed below. A. Description of Costs to Be Paid for With Tax Increment Revenues A description of the costs of the plan intended to be paid for with the tax increment revenues (1)(a). M.C.L. Cost Summary. The following summary lists potential costs based on initial preliminary due diligence and site investigation results. This plan seeks approval of the following activities, which include: Page 10 of 17

13 (a) Due Diligence Activities, including but not limited to Phase I ESA, Phase II ESA, Hazardous Materials Survey (Asbestos, Lead Based Paint, Mold, PCB electrical equipment, etc.) BEA, 7a Due Care Plan, Brownfield Plan and Act 381 Work Plan Preparation activities; (b) Health and Safety Plan Preparation; (c) Asbestos, Lead Based Paint, Mold and PCB electrical equipment removal, field screening, sample collection and analysis and summary report preparation; (d) Interior demolition as well as selective building exterior demolition; (e) Site security; and (f) Local public infrastructure activities. All reimbursements are proposed to be obtained from tax increment revenues derived from local school taxes (RESA/ISD) and state school taxes (SET and Operating). Tax increment revenues will be used to reimburse the Developer to perform the above activities (as well as implement other eligible activities permitted under the Brownfield Redevelopment Financing Act. The activities would generally be implemented in a phased approach, in the following order: a. As much as $115,000 will be spent to perform Due Diligence Activities including, but not limited to, Due Diligence Activities, including but not limited to Phase I ESA, Phase II ESA, Hazardous Materials Survey (Asbestos, Lead Based Paint, Mold, PCB electrical equipment, etc.) BEA, 7a Due Care Plan, Brownfield Plan and Act 381 Work Plan Preparation activities. b. As much as $6,000 may be spent to prepare a Health and Safety Plan for the demolition activities described above (assumes one H&S Plan). c. As much as $1,000 may be spent to obtain and evaluate demolition bids for the project. d. As much as $625,000 may be spent to perform interior demolition as well as selective building exterior demolition. e. As much as $88,000 may be spent to perform Asbestos, Lead Based Paint, Mold and PCB electrical equipment removal, field screening, sample collection and analysis and summary report preparation. f. As much as $60,000 may be spent to perform Local public infrastructure activities. g. As much as $3,000 may be spent on site security that may include fencing, security guards or other necessary measures to help prevent site access during demolition activities. h. As much as $110,000 may be spent on geotechnical evaluation and foundation reinforcement (sheet piling) activities; Page 11 of 17

14 i. A contingency of as much as $165,000 (approximately 15% of estimated project costs) is established to address unanticipated conditions that may be discovered during the implementation of site activities as required under P.A. 381 of 1996, as amended. j. Reasonable and actual administrative and operating expenses of the Authority permitted to be reimbursed pursuant to Section 13(16) of the Brownfield Redevelopment Financing Act or otherwise. It is currently estimated that the amount of such expenses incurred will be up to $2,000 per year, until all eligible expenses have been paid or reimbursed (currently estimated to be 19 years) plus an additional 5 years of TIR capture, for a total of about $74,000. The actual amount of such expenses to be reimbursed shall be approved by the Authority from time to time. k. Certain expenses incurred before approval of the Brownfield plan may be reimbursed, at the discretion of the Authority, from the Authority s annual administrative cost reimbursement allowance as allowed under Section (19) in accordance with the eligible costs and expenses described in Section (16). It is not anticipated at this time that preplan approval expenses will be incurred. However, should such expenses be identified at a later date by Developer, Developer reserves the right to request an amendment to the Plan to include approval and reimbursement of those expenses by the Authority. All activities are intended to be "eligible activities" under the Brownfield Redevelopment Financing Act. The total estimated cost of eligible activities subject to repayment or reimbursement from tax increment revenues is as much as $1,273,000, plus interest at a rate of 5% per annum. The estimated costs outlined in a-k, above, may increase or decrease depending on the nature and extent of any unknown or unanticipated conditions on the Property. As long as the total costs, adjusted by the 15% factor, are not exceeded, the line item costs of the Eligible Activities outlined above may be adjusted between the Eligible Activities after the date this Plan is approved without the need for any additional approval from City of Port Huron City Council or the City of Port Huron Brownfield Redevelopment Authority, to the extent those adjustments do not violate the terms of any MEDC/MEGA or MDEQ approved work plan, if any. It is fully intended by the DDA, BRA and Developer that this Plan may be amended to add or delete eligible activities and the estimated cost of each for any Phase of the project. The actual cost of eligible activities in this Plan that will qualify for payment or reimbursement from tax increment revenues of the City of Port Huron Brownfield Redevelopment Authority from the Property shall be governed by the terms of a Reimbursement Agreement between the Developer and the City of Port Huron Brownfield Redevelopment Authority (the Reimbursement Agreement ). No costs of eligible activities will be qualified for reimbursement except to the extent permitted in accordance with the terms and conditions of the Reimbursement Agreement. The Reimbursement Agreement and this Plan will dictate the total cost of eligible activities subject to payment, provided that the total cost of eligible activities subject to payment or reimbursement under the Reimbursement Agreement shall not exceed the estimated costs set forth above by more than 15% without requiring an amendment to this Plan. Page 12 of 17

15 The amount to be reimbursed to the Developer under this Brownfield Plan shall not exceed $1,629,473.00, including interest, without amending the Plan. Capture of School Taxes. This plan specifically provides for the capture of taxes levied for school operating purposes from the eligible property. A summary of the estimated cost of the eligible activities is presented below: Estimated Reimbursable Eligible Activity Cost Eligible Activity Estimated Cost BEA Activities $ 85,600 Due Care Activities $ 201,001 MEGA Activities $ 789,000 SUBTOTAL ELIGIBLE ACTIVITIES $ 1,075,601 Contingency (15% as required under Act 381) $ 161,340 Act 381 Work Plan Review Fee $4,000 Total estimated costs for eligible activities $ 1,240,941 Reimbursable Interest Expense $ 1,095,565 BRA Management Expense $ 32,959 TOTAL REIMBURSABLE COSTS $ 2,369,465 B. Brief Summary of the Eligible Activities A brief summary of the eligible activities that are proposed for each eligible property M.C.L (1)(a). The eligible activities will include: (a) Due Diligence Activities, including but not limited to Phase I ESA, Phase II ESA, Hazardous Materials Survey (Asbestos, Lead Based Paint, Mold, PCB electrical equipment, etc.) BEA, 7a Due Care Plan, Brownfield Plan and Act 381 Work Plan Preparation activities; (b) Health and Safety Plan Preparation; (c) Asbestos, Lead Based Paint, Mold and PCB electrical equipment removal, field screening, sample collection and analysis and summary report preparation; (d) Interior demolition as well as selective building exterior demolition; (e) Site security; and (f) Local public infrastructure activities. C. Estimate of Captured Taxable Value and Tax Increment Revenues An estimate of the captured taxable value and tax increment revenues for each year of the plan from the eligible property. The plan may provide for the use of part or all of the captured taxable value, including deposits in the local site remediation revolving fund, but the portion intended to be used shall be clearly stated in the plan. The plan shall not provide either for an exclusion from captured taxable value of a portion of the captured taxable value or for an exclusion of the tax levy of 1 or more taxing jurisdictions unless the tax levy is excluded from tax increment revenues in section 2(dd), or unless the tax levy is excluded from capture under section 15. M.C.L (1)(c). Page 13 of 17

16 See Attachment C for spreadsheets depicting estimated tax increment revenues for each year of the plan. Please note that these projected revenues are based on the planned investments related to the redevelopment of the commercial retail, office and residential units. The actual valuations will depend on final site plan approvals and final density determinations as approved by the City of Port Huron. The initial taxable value of the eligible Property shall be based on the 2011 taxable value. A summary of the Total Estimated Tax Increment Revenue is presented below: Year Estimated Taxable Value Total Estimated Tax Increment Revenue Estimated Tax Increment Reimbursement to Developer Estimated Tax Increment Revenue to PHBRA Estimated Tax Increment Revenue to PHTIFA ,127, ,201, ,215, ,252, ,308, ,367, , ,428, , ,511, , ,617, , ,725, , ,837, , ,952, , ,071, , ,193, , ,318, , ,448, , ,582, ,443 1, ,719, ,166 1, ,861, ,001 1, ,006, ,951 1, ,157, ,020 1, ,311, ,210 1, ,471, ,527 1, ,635, ,973 1, ,804, ,552 1, ,978, ,268 1, ,157, ,127 1, ,342, ,130 1, ,532, ,028 1,979 46, ,728, ,593 2, Total: N/A $2,402,424 $42,475 $208,482 Page 14 of 17

17 D. Method of Financing and Description of Advances by the Municipality The method by which the costs of the plan will be financed, including a description of any advances made or anticipated to be made for the costs of the plan from the municipality. M.C.L (1)(d). It is anticipated that the Developer will be advancing all costs of due diligence, excavation/transportation/disposal, demolition, environmental observation and sampling, health and safety plan preparation, site security, demolition related rough grading, and public infrastructure, and costs for Brownfield Plan Preparation. It is anticipated that the City of Port Huron Brownfield Redevelopment Authority will authorize the Plan to capture incremental tax revenues from the project to reimburse the Developer for the costs estimated above. In addition, it is anticipated that the City of Port Huron Brownfield Redevelopment Authority will also collect a percentage of the tax increment revenues for Administrative Costs related to administering the Plan for this project. The Authority will reimburse the Developer for the eligible costs solely from tax increment revenues from the eligible property pursuant to the terms of the Reimbursement Agreement. The Authority will reimburse for the actual costs, with interest at a rate of five percent (5%) per annum on the outstanding balance. The Authority s obligation to reimburse the Developer is subject to receipt of tax increment revenues. If there are insufficient tax increment revenues generated on the eligible property to reimburse for the cost of all of the eligible activities during the life of the Plan, the Authority shall not be obligated to reimburse the Developer beyond the amount of tax increment revenues which have been received. Should it be necessary, the Developer may apply to amend the Plan at a later date to include additional eligible activities. The approval of any such Plan amendment is at the reasonable discretion of the Authority. E. Maximum Amount of Note or Bonded Indebtedness The maximum amount of note or bonded indebtedness to be incurred, if any. M.C.L (1)(e). No bonded indebtedness will be incurred by the City of Port Huron or the City of Port Huron Brownfield Redevelopment Authority in connection with this project. F. Duration of Brownfield Plan The duration of the brownfield plan for eligible activities on eligible property which shall not exceed 35 years following the date of the resolution approving the plan amendment related to a particular eligible property. Each plan amendment shall also contain the duration of capture of tax increment revenues including the beginning date of the capture of tax increment revenues, which beginning date shall be identified in the brownfield plan and which beginning date shall not be later than 5 years following the date of the resolution approving the plan amendment related to a particular eligible property and which duration shall not exceed the lesser of the period authorized under subsections (4) and (5) or 30 years from the beginning date of the capture of tax increment revenues M.C.L (1)(f). The duration of the Plan as proposed shall be for a maximum of thirty-five (35) years which includes a 5-year project start window and up to 30 years of tax capture for reimbursement to developer, including up to 5 years of Local Site Remediation Revolving Fund tax increment revenue (TIR) capture. The Plan may be amended at a later date. Page 15 of 17

18 G. Estimated Impact of Tax Increment Financing on Revenues of Taxing Jurisdictions An estimate of the impact of tax increment financing on the revenues of all taxing jurisdictions in which the eligible property is located. M.C.L (1)(g). See Attachment C for an estimate of the impact on all relevant taxing jurisdictions. A summary of the Total Estimated Captured Taxes by Taxing Jurisdiction is presented below: Estimated Captured Taxes by Taxing Jurisdiction TAXING JURISDICTION TOTAL ESTIMATED CAPTURED TAXES SCHOOL OPERATING $ 1,735,480 STATE EDUCATION TAX $ 578,493 INTERMEDIATE SCHOOL DISTRICT $ 330,667 TOTAL $ 2,644,640 H. Legal Description, Property Map and Personal Property A legal description of the eligible property to which the plan applies, a map showing the location and dimensions of each eligible property, a statement of the characteristics that qualify the property as eligible property, and a statement of whether personal property is included as part of the eligible property. If the project is on property that is functionally obsolete, the taxpayer shall include, with the application, an affidavit signed by a level 3 or level 4 assessor, that states that it is the assessor's expert opinion that the property is functionally obsolete and the underlying basis for that opinion. M.C.L (1)(h). A legal description of the eligible property is included in Attachment A. Site maps are shown in Attachment B. The characteristics that qualify the property as eligible property are set forth in Section IV of this Plan. The eligible property will include personal property to be located within the new facility. I. Estimates of Residents and Displacement of Families Estimates of the number of persons residing on each eligible property to which the plan applies and the number of families and individuals to be displaced. If occupied residences are designated for acquisition and clearance by the authority, the plan shall include a demographic survey of the persons to be displaced, a statistical description of the housing supply in the community, including the number of private and public units in existence or under construction, the condition of those in existence, the number of owner-occupied and renter-occupied units, the annual rate of turnover of the various types of housing and the range of rents and sale prices, an estimate of the total demand for housing in the community, and the estimated capacity of private and public housing available to displaced families and individuals. M.C.L (1)(i). Page 16 of 17

19 There are no persons residing at the property that would be redeveloped under the Plan and there will be no families or individuals displaced as result of development under the Plan. No occupied residences are involved in the development. J. Plan for Relocation of Displaced Persons A plan for establishing priority for the relocation of persons displaced by implementation of the plan. M.C.L (1)(j). No persons will be displaced as a result of implementation of the Plan. K. Provisions for Relocation Costs Provision for the costs of relocating persons displaced by implementation of the plan, and financial assistance and reimbursement of expenses, including litigation expenses and expenses incident to the transfer of title, in accordance with the standards and provisions of the federal uniform relocation assistance and real property acquisition policies act of 1970, Public Law , 84 Stat M.C.L (1)(k). No persons will be displaced as result of this development, and therefore, no relocation costs will be incurred. L. Strategy for Compliance with Michigan s Relocation Assistance Law A strategy for compliance with 1972 PA 227, MCL to M.C.L (1)(l). No persons will be displaced as result of this development. M. Description of Proposed Use of Local Site Remediation Revolving Fund A description of proposed use of the local site remediation revolving fund. M.C.L (1)(m). No Funds from the local site remediation revolving fund are anticipated to used for the project. The Authority intends to capture TIR for a period up to five (5) years after reimbursement of costs and expenses of eligible activities of Developer and deposit the TIR into the Local Site Remediation Revolving Fund pursuant to Section 8 of the Brownfield Redevelopment Financing Act (M.C.L ). N. Other Material that the Authority or Governing Body Considers Pertinent Other material that the authority or governing body considers pertinent. M.C.L (1)(n). There are no other materials that the Authority or governing body considers pertinent at this time. Page 17 of 17

20 Attachment A Legal Description of the Eligible Property

21 LEGAL DESCRIPTIONS 202/204 HURON AVENUE / 411/415 QUAY STREET ( ): BEG AT SWLY COR BLK 14, TH N 43.84' ALG WLY LINE BLK 14, TH N 89D 33M E ', TH N 29D 13M E 6.8', TH S 64D 49M E 26.6', TH S 28D 05M 30S W 39.61', TH N 60D 50M W 25.0' ALG SLY FACE OF EXISTING WALL, TH S 28D 33M 24S W 61.6' ALG ELY FACE OF EXISTING WALL, TH N 60D 50M W 75.29' ALG SLY LINE OF BLK 14 TO POB BUTLER PLAT LER PLAT 208 HURON AVENUE / 107 MICHIGAN STREET ( ): S 1/2 LOTS 4 & 17 BLK 14 BUTLER PLAT 203 MICHIGAN STREET ( ): N 1/2 LOT 6 BLK 14 BUTLER PLAT 230 HURON AVENUE ( ): S 1/2 LOT 8 & S 48 FT LOT 13 BLK 14 EX THAT PART LYING S OF A LINE COMM AT SW COR LOT 13, TH N 2 FT ALG E LINE HURON AVE TO PT OF BEG, TH S 89 DEG 49 MIN E FT, TH S 1.6 FT, TH S 89 DEG 36 MIN 30 SECONDS E FT TO SE COR LOT 8 BUTLER PLAT 217 MICHIGAN STREET ( ): N 1/2 LOT 8 EX N 2 FT OF W 25 FT BLK 14 BUTLER PLAT 220 HURON AVENUE ( ): N 1/2 OF LOT 15 BLK 14 BUTLER PLAT 218 HURON AVENUE ( ): S 1/2 OF LOTS 6 & 15 BLK 14 BUTLER PLAT 216 HURON AVENUE ( ): W FT OF N 1/2 LOT 5 & N 1/2 LOT 16 BLK 14 BUTLER PLAT 206 HURON AVENUE ( ): THE NORTH 1/2 LOT 18, EX THE E 9.50' THEREOF BLK 14, "BUTLER PLAT" 311/313/313-1/2 / 315 HURON AVENUE / 310/312 SUPERIOR STREET MALL ( ): N 10 FT LOT 2, ALL LOTS 3, 4, 13, 14 & N 10 FT LOTS 15 & 16 BLK 17 BUTLER PLAT 321 HURON AVENUE ( ): N 30 FT LOT 5 BLK 17 BUTLER PLAT 319 HURON AVENUE ( ): S 20 FT LOT 5 & ALL OF LOT 12 BLK 17 BUTLER PLAT

22 Attachment B Site Maps, Photographs and Site Plan/General Concept Plan

23 SITE LOCATION REFERENCE USGS 7.5 MIN TOPOGRAPHIC QUADRANGLE PORT HURON, MICHIGAN QUADRANGLE SCALE: 1: Date: Unknown N FIGURE 1: SITE LOCATION MAP Huron-Main Revitalization Project Huron and Grand River Avenues Port Huron, Saint Clair County, Michigan PROJECT: DATE: 10/19/11 PREPARED BY: NGM 6001 North Adams Road, Suite 205 Bloomfield Hills, Michigan Tel (248) Fax (248) associatedenv@comcast.net Web: Environmental Services Land Development Real Estate Consulting

24 Subject Site Z Source: Google Maps Source: Bing Maps Scale: Unknown FIGURE 2: AERIAL SITE PLAN Huron-Main Revitalization Project Huron and Grand River Avenues Port Huron, Saint Clair County, Michigan USA PROJECT: DATE: 10/19/11 PREPARED BY: NGM Environmental Services Land Development Real Estate Consulting 6001 North Adams Road, Suite 205 Bloomfield Hills, Michigan Tel: (248) Fax: (248) associatedenv@comcast.net

25 Huron-Main Revitalization Project Mixed-use Development Commercial/Retail Residential Lofts Project located in Port Huron, Michigan Job Creation and Economic Development The development of the project on the Property represents an overall investment of approximately $4,200, The completion of this project is estimated to create an average of 27 jobs per year during the construction phase of the project within Port Huron, Michigan. Jobs resulting from the retail/office/residential, building management, security, grounds keeping, and other related business services that will be located on the proposed Development for an approximate annual payroll of $3,020, Please see the tables below for a summary of direct economic benefits resulting from the project. Phase of Construction (Commercial, Retail & Lofts) Ballentine Building Huron- Michigan Building Cavis Building Penny's & HAC Building Construction Phase Total Job Classification Construction Tradesmen and affiliated workers Construction Tradesmen and affiliated workers Construction Tradesmen and affiliated workers Construction Tradesmen and affiliated workers Table 1: Construction Phase Job Creation and Direct Economic Impact Typical Hourly Rate Typical Hours Worked (Weekly) Typical Annual Salary Number of Jobs Related to Project (Average per year) Total Annual Payroll Related to Project Duration of Jobs Created by Project $ $45, $1,235, years (6 months construction) $ $45, $1,235, years (6 months construction) $ $45, $1,235, years (6 months construction) $ $45, $1,235, years (14 months construction) Total Estimated Project Related Payroll $617, $617, $617, $1,433, $3,286,483.20

26 Phase of Construction (Permanent Jobs) Ballentine Building Huron- Michigan Building Cavis Building Penny's & HAC Building Permanent Jobs Job Classification Retail/Office/Servic es, management, grounds keepers, security, etc.) Retail/Office/Servic es, management, grounds keepers, security, etc.) Retail/Office/Servic es, management, grounds keepers, security, etc.) Retail/Office/Servic es, management, grounds keepers, security, etc.) Table 2: Post Construction Phase Job Creation and Direct Economic Impact Typical Hourly Rate Typical Hours Worked (Weekly) Typical Annual Salary Number of Direct Jobs Related to Project (Average per year) Total Annual Payroll Related to Project Duration of Jobs Created by Project Total Estimated Project Related Payroll $ $22, $686, Perpetual $686, $ $22, $457, Perpetual $457, $ $22, $251, Perpetual $251, $ $22, $1,624, Perpetual $1,624, $3,020,160.00

27 Attachment C Estimated Tax Increment Revenues (The estimates are based on the construction costs provided by Developer.)

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29 Attachment D Due Diligence

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