Politics & Government
Dearborn Council, Public Pose Questions on Artspace Project
Local residents express concern over low-income artist apartment project moving to east Dearborn.
A multimillion dollar project to convert the current Dearborn City Hall building into studios and apartments for artists appears to be moving forward.
The Artspace project will convert city hall, located at 13615 Michigan Ave., into a mixed-use facility with 46 apartments with studios for artists to live and work in, as well as 25,000 square feet of gallery space, a coffee shop and communal gathering hub.
In an effort to clarify unanswered questions from the public and members of the Dearborn City Council, city officials held an informal work session on the project Thursday.
One of the council's chief concerns has been the cost savings in relation to expenses for moving city hall's operations.
The city purchased the former ADP building, which is one building west of Henry Ford Centennial Library, for $3.2 million last year with the intent of moving city hall operations there and calling it the Dearborn Administrative Center. City officials have verbally agreed to sell the current city hall building to Artspace for $1.65 million, the price determined by a mutually hired appraiser, but the council has to approve the contract.
According to Barry Murray, director of Economic and Community Development for Dearborn, cost savings is one of the main justifications for moving city offices from 13615 Michigan Ave. to a new building.
Based on previous estimates, Murray said it would cost the city $450,000 more to rehabilitate the current city hall than to open the Dearborn Administrative Center. City officials previously said that rehabilitation costs would average about $6.2 million, not including $2 million to replace the parking deck at city hall. In comparison, purchasing and renovating the ADP building would cost approximately $7.75 million ($9.4 million minus the proceeds from the sale of city hall to Artspace).
Murray said updating the ADP building with new technology would also save the city approximately $420,000 a year.
Councilwoman Nancy Hubbard said she was concerned with how Artspace will choose its tenants once the sale and renovations of the current city hall are complete.
The Dearborn Planning Commission recently approved a special land use request for low-income housing with the caveat that the property is only used by Artspace. The nonprofit is applying for $6.9 million in low-income housing tax credits from the Michigan State Housing Authority on Aug. 15.
Heidi Kurtze, vice president of properties for Artspace, explained that while the company cannot legally turn any applicant away, it has a rigorous screening process, and will give first preference to artists. Kurtze said applicants will have to prove that they can pay rent, have a sustainable income, and make at least 60 percent of the median salary range in Wayne County, or roughly $38,000.
Apartments will be leased to single individuals and families, and will range in price from $400 a month to $1,100 depending on the size of the apartment, she said.
"We're far from Section 8 housing that requires homeowners to produce proof of 30 percent of the median income," Kurtze said.
In response to a question regarding tenant turnover, Kurtze said the nonprofit has had very little problems with renting apartments in any of its 33 locations across the country due to its ability to refinance loans and keep rent costs down.
The big topic of the night addressed legal questions concerning the use of $8.3 million from Severstal North America to help finance the city's move to the Dearborn Administrative Center, as well as the Artspace project.
According to attorney Debra Walling, the $8.3 million is part of a profit-sharing agreement Severstal made with the city of Dearborn in 2005 after Severstal purchased the Rouge Steel plant. However, Severstal hasn’t had profits to share for several years so in 2009 the company asked to revise the agreement with the city to allow Severstal to pay a one-time lump sum.
Mayor John B. O'Reilly, Jr. said the steel company wants to spend the money on a one-time project, and originally planned to help fund a conference center at the Hyatt Regency Hotel. That deal fell through when the hotel went into bankruptcy in 2010.
Walling said the city and Severstal are working an agreement to use the $8.3 million to fund the redevelopment of the former ADP building at 16901 Michigan Ave. into the Dearborn Administrative Center ($5 million). Other funds can be used for the development of a Veterans Memorial Park adjacent to the DAC ($1.5 million); a contribution to Artspace for the pre-development feasibility and re-design study of the current city hall ($345,000); and a $1.4 million donation to Artspace.
Residents: 'Questions still remain'
Following Thursday's presentation, six residents voiced their concerns about the Artspace project moving forward.Marium Wilke, president of the Eastborn Neighborhood Association, said she was concerned that low-income housing would decrease the value of property in east Dearborn.
"We've taken a big hit in property values. What will this project do to our existing homes in this area?" she asked. "It's kind of scary."
O'Reilly said Artspace is planning to invest $17 million in the rehabilitation of the current city hall building, and the owners will pay taxes on the assessed value of the property moving forward.
"I met with the mayors of St. Paul and Minneapolis, and what they said to me is that Artspace increased the value of homes around the area tremendously," O'Reilly said.
Resident Kristyn Taylor a candidate for city council, asked O'Reilly if the city has plans to test for black mold in the ADP building prior to relocating its offices.
"That's just a myth. The building was used for 10 years very successfully. The building is perfectly occupiable. We went in and had a professional company do a complete analyses before we bought it," O'Reilly said. "There has never been black mold in that building."
Taylor also asked for clarification on the demolition of the city hall parking deck and naming rights in exchange for Severstal's contribution to the Dearborn Administration Center.
Resident Christine Sickle said she was excited to see the council moving forward with the Artspace project.
"This is a great opportunity for the city," she said. "The arts bring a creative class to our community. I would hate to see this opportunity pass us by."
City Council President Tom Tafelski said the council may hold a second work session to clarify more issues about the project at a future date.
To view a complete synopsis of the Artspace project, visit http://www.cityofdearborn.org/ and click on the "transparency" tab.
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