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  • Writer's picturePennies from Heaven

Bowling Alley Block Redevelopment Story

LUDINGTON, Michigan, September 7, 2018 -

The wait is over! The bowling alley block redevelopment project is officially set to begin! The block is on the South side of Ludington Avenue between Rath and Robert street. The block, still known for and named after the bowling alley that was located there, is receiving a significant investment. Soon the block will contain two new four-story structures that will add much needed new retail space, and workforce housing to our downtown. The first floor of each will contain commercial/retail space. The upper 3 stories will contain a mix of one and two bedroom apartments. The building located on Ludington Avenue will be available for all individuals and families who qualify, whereas the building located on Loomis will be senior housing available to those 55 and older who qualify. The historical building on Rath that is home to the Nautical yarn shop will remain.

Many have questioned if this project would actually begin, as this particular project was first conceived in 2015. However, the idea has been around much longer.

A Brief History:

Starting in 2003, Bob Neal began looking at this space as a way to add more retail and commercial space to downtown Ludington. In 2007, John Wilson, CEO of Western Land Services, became involved in the cause. After the 2008 market crash, like many other construction projects, the plans never came to fruition. In order to try and continue to pursue the development of the block, John purchased the west end to hold for future development. Bob Neal owned the east end. After learning the challenges of building and developing in a downtown, and several attempts to make a project work, the Neals and the Wilsons agreed to donate their properties to the Community Foundation to hold the property for a community minded development. Both the Neals and Wilson continue to search for the right project for the property and the community. ohn and Anita Wilson's Fund at the Community Foundation was set up to support the maintenance and pay property taxes to hold for the right time and right project for the downtown.  Little did the Wilson’s know that it would take over 9 years.

In the summer of 2015, John Wilson, now Pennies from Heaven met with Bob Jacobson LC Consultants. LC Consultants thought the market and timing was right to make a project work on this site with draft numbers, began to explore more in depth.  In Spring of 2016, LC Consultants applied through the competitive Low-Income Housing Tax Credit or LIHTC process through MSHDA. They were successful in their application and were awarded tax credits in early Fall of 2016. That is when the real work began to finalize plans and costs for this project. A curveball came in November 2016 after the Presidential Election caused a drop in tax credit market. What was worth $1.00 now worth $0.80-0.85 cents. On a project like the one in our downtown, that is a significant gap. LIHTC Projects across the state was put on hold as waited for market to correct, and for MSHDA to come up with a solution. All while the construction market was begin to see unprecedented growth, and subsequently rising costs for both labor and material. Subsequently, in the Summer 2017, LC Consultants reapplied to MSHDA for additional Tax Credits that LC Consultants did not ask for on the project originally in order to help close the gap, and were awarded the additional credits in Fall 2017. LC Consultants has been actively working to complete designs, architectural plans, and the construction contract with Rockford Construction all while meeting the requirements of MSHDA and investors. One of the major challenges being the costs.

Traditionally in construction, the costs to build are covered in the eventual sale price or rental price. That is considered the Market Rate. Therefore to build anything that costs less than the market rate, means that there is a gap between the cost of construction and what the the building will earn. Tax Credits are one tool to help cover the cost gap between market rate development and affordable workforce housing for low to moderate wage earners. With the skyrocketing construction costs in recent years translates to higher sale prices or rental rates needed to support the construction. it has become more and more difficult to build even at the market rate, let alone something below market. LC Consultants was left to find ways to close the growing gap between market rate and affordable, while staying in compliance with LIHTC program, and investors.

The role of the Pennies from Heaven Foundation:

After donating property to the Community Foundation, John and Anita Wilson founded the Pennies from Heaven Foundation in 2012. The Pennies from Heaven Foundation believes in the power of the "we" mindset.  Community is a family and we are all in this together. Instead of asking, "what's in it for me", we challenge you to ask, "what's in it for we"? How do we think different? How do we live? How do we give?  Pennies From Heaven aims to address greatest needs to help fill gaps in available resources and build bridges that help all households have the ability to achieve self-sufficiency and the opportunity to thrive.

One of the greatest needs in our community is housing. Adequate housing stock that is safe, and affordable across all levels of wage earners is vital to the health households, and the health of the community. Housing affects a households ability to have gainful employment, balance a budget, manage health, a child’s ability to be successful in school, and more. Therefore Pennies from Heaven actively is looking how we as a Foundation can address this greatest need.

Through a connection, John Wilson was introduced to Bob Jacobson at LC Consultants and was impressed from the begining with the quality of his work, and his eagerness to complete a successful project in Ludington. The Foundation owned the Northern half of the Block. Understanding the challenges of affordable housing, they agreed to donate it to this project to help close the gap back in 2015. To help the overall LIHTC project be more competitive in the application process, we agreed to act as the intermediary to purchase the Southern half of the block from the City, so that the $500,000 purchase price could be spread between the two buildings and their respective LIHTC applications. Since 2015, Foundation continued to stay engaged, act as local boots on the ground and help guide conversations to find solutions agreeable to all parties involved.

After hearing the City’s concerns about the need to relocate the Fire Station, and the costs associated, the Pennies from Heaven Foundation donated half of the property we had acquired on Tinkham for the Lakeshore Resource Network, to the City to use for a new fire station, once it proved a viable location. This saved the City from needing to purchase another property. The foundation and the City were then  able to then share many of the infrastructure buildout costs to help make it affordable for the City to relocate the firestation.

Ground breaking scheduled for Wednesday, September 12th at 1pm onsite.


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