ESCANABA — The Escanaba City Council voted to move forward with the process to authorize a payment in lieu of taxes agreement with a developer seeking to build a low-income apartment complex in the city despite lingering questions about the development’s marketability and site plan.

During Thursday’s regular council meeting, Craig Patterson, vice president with Woda Cooper Companies, presented a rough outline of the proposal for the Bay de Noc Apartments, which would be built in the 500 block of North 26th Street, near Meijer and Walmart. The $14.5 million project includes 70 units available for singles, families, and seniors who meet income guidelines.

Of the 70 units in the planned four-story complex, 26 would be made available to residents and families who make up to 80 percent of the Delta County area medium income ($58,700 for a family of four). For singles in a one bedroom apartment the maximum income would be $43,240, for a family of four in a two-bedroom apartment the maximum income would be $48,800, and for a family of five in a three-bedroom apartment the maximum income would be $52,800.

“Now, it could go higher than that if it’s a family of six, but it depends on the composition of the family,” said Patterson.

In order for the developer to get State of Michigan Low Income Housing Tax Credit Program funding, the city needs to approve an ordinance for payment in lieu of taxes (PILOT). Under the planned ordinance, $21,500 would be paid annually in lieu of taxes on the 2.5 acre property and the developer would enter into a municipal services agreement that would pay the city $16,500 per year. Currently, the city makes $5,520 on the 10 acre parcel the development area would be split from.

However, many questions about the plan could not be answered Thursday. The four-story complex proposed is dependent on the property being rezoned at the planning commission level. If the property is not rezoned, the developer intends to swap the building design for a two-story structure with an equal number of rooms. The site plan review for the property and any discussion of rezoning won’t happen until the Feb. 13 planning commission meeting.

When asked by the Daily Press why the PILOT discussion was taking place prior to the site plan’s approval, City Manager Patrick Jordan said it was a cost-saving measure for the developer.

“It’s going in front of the planning commission next week, I believe, but we figured let’s get this going at least and make sure the PILOT is going to make it through the council and be approved before they spend a lot of money at the planning level,” said Jordan.

Seeking the PILOT first wasn’t the only part way Woda Cooper Companies bucked the traditional order for development projects. Patterson told the council a market analysis had yet to be done on the project.

“Sounds like you’ve got the cart before the horse. You should have the market study first to show you what the demand is and build to the demand,” said Mayor Marc Tall.

Patterson said he was aware of other similar developments locally with waiting lists. He also said there was a 2018 market study for a different apartment proposal that did not come to fruition, and he could get that study to the council expediently.

“I guess I’d like to see if the need is here before we approve a tax reduction to be able to do it, if the need is here — because we do have lot of rentals in town and a lot of apartments and a lot of buildings that are income qualified. So is there a need or are we going to be thinning out what others … have?” said Council Member Peggy O’Connell.

The council voted to consider Thursday’s meeting the first reading of the PILOT ordinance and to set a second reading, public hearing, and possible adoption for the Feb. 20 council meeting.