edgewater development strategy
DESCRIPTION
Edgewater Development Strategy, 1992. An 18-hole championship golf course using Jean Klock Park was determined to be the best idea for redeveloping seriously contaminated Auto Specialties and Whirlpool former industrial land. “In addition to being financially feasible this planning program suggests that the Edgewater Development will be very important to the City of St. Joseph.” Page 33: "An 18-hole championship golf course is proposed with ten holes located within the Edgewater study area and the balance in Klock Park and on the eastern side of the Paw Paw River."TRANSCRIPT
Development Strategy
Edgewater Area St. joseph / Benton Harbo0 Michigan
Submitted CO
Cornerstone All i ance
Submitted by
LOR International, Inc.
Hunter Interests, Inc.
Fishbeck, Thompson, Carr & Huber, Inc.
Moffatt & Nichol Engineers
Design Plus
1.0 Introduction ...................................................................................................1 1.1 Overview of the Study Process ............................................................ 1
1.2 Review of Previous Studies .................................................................. 2
2.0 Site Evaluation ............................................................................................. 3
2.1 Site Description ..................................................................................... 3 2.2 I nfrastructu re ...................................................................................... 5
2.2.1 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
................................................................... 2.2.1.1 Sanitary Sewer
5
..................................................................... 2.2.1.2 Storm Sewers
6
.................................................................................. 2.2.1.3 Water
6
............................................................................ 2.2.1.4 Electricity
9
.........................................................................2.2.1.5 Natural Gas
9
................................................................. 2.2.1.6 Cable Television
9
2.2.2 Transportion ......................................................................... 9
2.2.2.1 Roads .............................................................................. 9 2.2.2.2 Rail Service ................................................................... 10
2.3 Environmental Constraints .................................................................. 10
2.3.1 Wetlands .............................................................................10 2.3.2 Site Contamination ............................................................11 2.3.2.1 Auto Specialities Site ..................................................... 11
2.3.2.2 Contamination Clean-Up ............................................... 12
2.3.2.3 Whirlpool Site ................................................................ 13
2.3.2.4 Industrial Rubber Site .................................................... 13
2.3.2.5 Remediation ...................................................................14
2.4 Land Ownership ..................................................................................14
2.5 Adjacent Land Use ..............................................................................14
2.6 Marina Potential ..................................................................................15
3.0 Market Assessment and Development Program
Alternatives ........................................................................................17
3.1 Market Assessment .............................................................................17
3.2 Development Program Alternatives .....................................................19
3.2.1 Development Program with Golf
Course ........................................................................19
3.2.2 Development Program without Golf Course ................................................................22 4.0 Land Development Alternatives ...................................................................24
5.0 Edgewater Development Plan .....................................................................28
6.0 Financial Analysis ........................................................................................ 30
7.0 Fiscal Impact Analysis ................................................................................ 31
7.1 Methodology .......................................................................................33
7.2 Conclusions ........................................................................................ 34
8.0 Implementation Strategy .................................................................... 36
8.1 Conditions of Development ................................................................. 36
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Draft - February 20, 1992
The purpose of the study was to develop a plan and strategy to guide the redevelopment for the waterfront area of St. Joseph, focusing on the 400± acre
area known as Edgewater. Additional property located in Benton Harbor was
later examined as part of the study.
Due to shifts in industrial activities, this formerly vital waterfront has changed dramatically. Factories have been torn down or abandoned due to
bankruptcy procedures. However, a Whirlpool engineering facility, a LaFarge
Corporation off-loading facility, and Anderson Building supply remain in
operation.
With a history of waterfront industrial activity come the problems of
environmental degradation. Because of extensive industrial pollution,
requirements for remediation of hazardous waste sites substantially impact the
redevelopment options for Edgewater. The Michigan Department of Natural Resources is currently studying the Auto Specialties plant and surrounding
property in Edgewater to determine the type and level of onsite toxic material
contamination. They will also develop and oversee a site remediation plan
dealing specifically with contamination at the Auto Specialties site. One goal of this plan is to influence the nature of this remediation plan.
It was imperative to understand the implications of these activities on the
future of the most valuable and strategically located properties in the Twin Cities. For this reason, the Edgewater study was initiated. Specific
development issues that have been addressed as part of the study include:
• site contamination • modifications to M-63 including the elimination of the Klock Road
interchange and a lowering of M-63 to an at-grade condition north of the
CSX rail line • infrastructure • environmental features • market conditions and development potential • development programming
• land use • expansion of the study area to include Jean Klock Park and sites on the
eastern shore of the Paw Paw River • financial feasibility
• fiscal impacts
The objectives of the Edgewater study were to prepare a redevelopment strategy
that provides maximum economic benefit to the Twin Cities, creates a synergistic
environment to spur community reinvestment, establishes a quality environment
at the lakefront gateway and deals sensitively and responsibly with
environmental and contamination issues.
Most of the subject properties (Whirlpool and Auto Specialties) have been
subject to previous development attempts. In 1986, upon an announcement that
Whirlpool Corporation intended to close its St. Joseph manufacturing facilities,
Corporate Properties, Limited of Providence, Rhode Island, was commissioned
to develop a reuse plan for Whirlpool's property. A mixed use project,
envisioning marina, residential and office facilities was proposed.
Shortly thereafter, Whirlpool Corporation commissioned a series of studies
designed to further analyze a concept identified in the initial reuse plan.
This recommendation expanded the size and scope of the project to include the
Auto Specialties property. These studies continued throughout 1987
and 1988, culminating in the fall of 1988, when negotiations between the
company and the Michigan Department of Natural Resources failed to agree on
future site liability.
In 1990, the Community Economic Development Corporation (currently the
Cornerstone Alliance) established a task force to examine the feasibility of
developing the property.
2.0 Site Evaluation
The Edgewater study area (Exhibit 1) consists of approximately 400 acres of land bounded by the Paw Paw River to the East, the St. Joseph River to the south, Lake Michigan to the east, and Jean Klock Park to the North. The majority of the study area was previously occupied by industrial operations of Auto Specialties and Whirlpool.
The Edgewater study area is strategically located at the juncture of the St. Joseph and Paw Paw Rivers. Marine access to Lake Michigan from Edgewater is unimpeded and direct.
The site is traversed by a major highway corridor (M-63) and an active rail line. The Blossomland Bridge (M-63) connects the study area to downtown St. Joseph to the south; downtown Benton Harbor is located on the opposite side of the Paw Paw River.
The central portion of the study area west of M-63 consists of industrial land. The now derelict Auto Specialties is located here as is an existing Whirlpool Engineering facility. The northern end of the central portion is characterized by vacant dunelands. Eastern Edgewater, adjacent to the Paw Paw River, is vacant except for a large electric substation. This area consists of low-lying wetlands adjacent to the river and gentle topography in the upland zones.
On the southern edge of the study area, along the St. Joseph River, the LaFarge Corporation has a series of construction material storage silos on the waterfront. The silos are loaded by ship and materials are distributed overland by trucks. Adjacent to the LaFarge site is a water storage tank as well as a smaller scale industrial user. The majority of the southern waterfront is vacant former industrial land that is visible from both St. Joseph and Benton Harbor.
The Site Analysis Diagram (Exhibit 2) shows the physical features of the study area as well as its opportunities and constraints. Existing and former uses on the site and adjacent areas are portrayed: residential, industrial, commercial, marina, and parks and open spaces. The diagram also illustrates the approximate location of wetlands, the extensive water frontage, and existing and potential access. The diagram enumerates the location of the various areas of environmental concern, detailed in Section 2.3.
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Specific features of the study area, including roads, utilities, environmental issues, and potential for marina development, are discussed in the following sections.
The existing utilities and transportation facilities for the Edgewater area were designed to serve the large Whirlpool and Auto Specialties industrial complexes. Therefore, capacity and access should be more than adequate for any new development in the area. New development within the Edgewater area will require improvements to extend streets and utilities into the areas that are not currently served.
The study area is well served by utilities due to its former industrial use. The utilities, including sanitary sewer, water, electricity, natural gas and cable television, are concentrated in Upton Drive, the primary road through the area (Exhibit 3). Utilities east of Upton Drive were designed to serve the industrial facilities, while the area west of Upton Drive is primarily residential and is served by local utility branches.
All sanitary sewers in the Edgewater area are tributary to the Edgewater Pumping Station, located at Upton Drive near the CSX Railroad. The sanitary sewers range in size from 8 to 16 inches. The area west of Upton Drive is fully served with local sewers. The area east of Upton Drive is only served by connections to the existing and former buildings adjacent to Upton Drive. There are no sanitary sewers in the areas east of the M-63 highway.
The Edgewater Pumping Station has a capacity of approximately 1,500
gallons per minute. The wastewater flow to the station has been reduced
significantly by the closing of the Auto Specialties and Whirlpool facilities.
Based on typical wastewater use per capita, the existing pump station
capacity could serve a population of over 5,000 total persons. However, the
pumping station is outdated and any major new development should include
replacement or renovation of the pumping station to insure adequate service.
The City of St. Joseph, including the Edgewater area, is served by the Benton Harbor/St. joseph joint Wastewater Treatment plant. A recent areawide study projected future flows to the plant and recommended plan upgrades to meet future demands. Implementation of the recommendations will result in adequate wastewater treatment capacity for the Edgewater area.
All municipal storm sewers in the area discharge to the St. joseph River. The storm sewers range in size from 10 to 42 inches. The storm sewers serve the areas adjacent to Upton Drive and Graves Street. The undeveloped areas north of the Auto Specialties plant, east of M-63 and the former Whirlpool plant site are not served by storm sewers. Future storm sewer locations and capacity will need to be evaluated based on proposed street locations and type of development.
Water service to the Edgewater area is provided by the City of St. Joseph water system. Water mains range in size from 6 to 20 inches. The water distribution system capacity in the Edgewater area should be adequate for any type of future development in the area. Future changes in demand locations, i.e., adjacent to the rivers and on the north part of the Auto Specialties site, will require extensions of distribution mains into areas which are not presently served.
The capacity of the St. Joseph Treatment Plant was reached in 1988 due to the high demands during the 1988 dry weather. Modifications to the St. Joseph
Water Treatment Plant have been recommended, and these modifications will
be necessary if adequate supply is to be available for increases beyond current demands in the Edgewater area.
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EOGEW A TER AREA 51. Joseph, Michigan
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Overhead electricity lines provide service throughout the developed Edgewater area. The power lines are located primarily along Upton Drive and the CSX
Railroad, with local service lines in area streets. IndianaMichigan Power
Company has a major sub-station located east of and adjacent to M-63. The
sub-station is expected to continue operation on this site in the future, and could provide adequate electrical power for development in the area.
Michigan Gas Utilities Company provides natural gas service to the
Edgewater area. Gas mains range in size from two to six inches.
Adequate natural gas service should be available for future development in the
area.
Cable television is available along the electric distribution system in the areas
west of and adjacent to Upton Drive. The undeveloped areas east of Upton
Drive do not currently have service, but could readily be served as development
occurs.
Upton Drive is the primary road in the Edgewater area. It is located in the
western portion of the area, dividing the primarily residential development to the
west from the abandoned industrial sites to the east. Upton Drive is accessed from the south by the M-63 bridge over the St. Joseph River and is connected at
the north to Klock Road. The concrete and bituminous surfaced roadway in
generally good condition. The crossing of the CSX Railroad is in poor condition
and in need of repair or replacement. North of Virginia Street, Upton Drive has two lanes with parking on the west side; south of Virginia Street, it has four
lanes.
A limited-access, four-lane divided highway, M-63, crosses the eastern portion of the study area from north to south. The highway is elevated across the site with no local access except southbound from Upton Drive at the St. Joseph River, and at an interchange with Klock Road to the north. The roadway surface is in generally good condition; repairs to the bridge structure may be needed. Initial discussions have begun with the Michigan Department of Transportation regarding the future removal of the Klock Road interchange and the lowering of the elevated sections of M-63 north of the rail crossing. These discussions are planned to continue on a regular basis.
The CSX Railroad crosses the southern portion of the study area in an eastwest direction, with two tracks crossing the Paw Paw River and one track across the
St. Joseph River. This railroad is expected to remain active. The track is a major Class 3 line, serving as the main link between Chicago, Detroit and
Grand Rapids. It is used by two Amtrak trains and 10 to 12 freight trains daily;
freight trains average 100 cars and are one to 1.5 miles long.
CSX has expressed its opposition to an at-grade crossing with M-63 due to the
frequency and length of the trains. They also oppose a new swing bridge over
the Paw Paw River, citing problems with the existing swing bridge at the St.
Joseph River.
Railroad spurs that formerly provided service to the Whirlpool and Auto
Specialties facilities are no longer used and some have been removed.
There are several areas of wetlands, both high quality and marginal, within the
study area; their approximate location and extent are shown in Exhibit 2. Permits will be required if any proposed development intrudes on wetlands. Discussions
with Michigan Department of Natural Resources (MDNR) indicate that
modifications to plans or mitigation of impacts may be required, but that most
development would not be precluded.
Contamination from previous industrial uses is known to exist within the study
area, and any plans for development must deal with the required investigation and remediation. Members of the consultant team met with MDNR staff and
reviewed the available files on the Auto Specialties and Whirlpool sites.
Complete information on the Whirlpool site was not obtained due to current
enforcement action and pending litigation against Whirlpool for the closure of two drum storage areas. The following sections briefly summarize the areas of
concern at both sites which are being investigated by MDNR.
The Mill Pond and Drainage Ditch Areas (shown as Area 1 on the Site
Analysis Diagram, Exhibit 2) are believed to be contaminated with metals,
oil and grease; material removed is expected to be disposed of as hazardous
waste. The Electrical Substation and Metal Building Area (Area 2), the location
of Monitoring Well 1, has a layer of oil containing PCBs in the groundwater.
Areas 3 and 4 have oil contamination of unknown extent. The landfill area east of the highway (Area 5) was used as a disposal site for sla& green glass and
metals from the bag house dust. This area was wetlands prior to filling.
Inside and outside the manufacturing plant (Area 6) are numerous PCB-containing transformers and capacitors. An estimated 3-4 semi-truck trailer
loads of drums, buckets and pails containing liquids and solids are located
throughout the facility (Area 7). MDNR will characterize these materials for
disposal and, where possible, return them to the supplier/manufacturer.
The north landfill area, filled with foundry sand, has not yet been investigated.
The Old Ball Diamond Area (Area 9) was a wetland filled in with tramp iron,
and is not an area of concern. The Pistol Range/Sand Dune (Area 10) is
believed to be clean and will be investigated further.
Asbestos has been found throughout the manufacturing plant (Area 11); low levels of PCB's were found in floor scrapings in the north area of the plant. The
storm sewer network (Area 12) beneath the site is contaminated; the extent of
contamination is not known and will be investigated when the buildings are removed. MDNR found 1,2-dichlorobenzene at the Research and Development
Laboratory (Area 13) and will investigate further.
The Auto Specialties site has two aquifers: one even with the surface water and one at approximately 80'. A distinct clay layer separates the two aquifers.
The shallow aquifer has metals, benzene and ethyl benzene; the deeper
aquifer has levels of arsenic. However, the arsenic found in the deeper aquifer
could be due to high natural background.
The Michigan Department of Natural Resources has been actively pursuing
"site characterization" and ·surface clean up· on the site since 1990.
The remediation investigation/feasibility study process is typically carried out in two or more phases, each one successively more specific in the delineation of
both areas of concern and quantities of materials. The second phase of the
remediation investigation/feasibility study process will begin in the late summer
of 1992 and will take approximately one year. Simultaneously, a feasibility study will be completed, determining the most cost effective methods of clean up. This
will be completed in 1994.
The feasibility study will then lead to the development of a remedial action plan, a process which should take approximately one year. From the remedial action
plan will evolve a final clean up design, with implementation of this design
beginning approximately January 1997, and continuing for some 9-12 months.
Surface clean up of immediatately identifiable problems will continue in tandem with the remediation and feasibility study work.
During 1993, materials are scheduled to be removed from the NPDES canal.
This canal was a federally permitted discharge point from the plant to the Paw Paw River, which contains contaminated spoils. Tentatively scheduled for 1993-
1994 is the disposal of bag house dust from the east land fill area. This is
material from the initial air pollution control system at the plant, which was
dumped on site.
Finally, in 1994, removal and disposal of PCB contaminated soils is
scheduled. This activity is dependent upon additional information on the
amount of material ultimately defined as PCB contaminated.
A list of unordered priorities for investigation and cleanup proposed by MDNR are as follows:
cleanup and disposal of PCB contamination; characterization and
disposal of dry and liquid chemicals inside the manufacturing plant.
Characterization, excavation and disposal of sediment traps and canals along the discharge to the Paw Paw River;
Characterization, excavation and disposal of the east landfill area
(containing bag house dust, high in metals); and
Demolition and investigation of the area beneath the manufacturing plant.
Demolition of portions of the buildings is currently underway and is
managed by the Federal Bankruptcy Court. In September 1991, the bankruptcy trustee solicited formal bids for demolition of both the St.
Joseph and Riverside Auto Specialities facilities. The bids were for salvage
value only as the trustee indicated no cash funds were available for
payment. Work on removal of the St. Joseph facility began in March 1992.
MDNR's Waste Management Division (WMD) is concerned with the
northeastern portion of the site and has taken legal enforcement action against
Whirlpool on two hazardous waste storage areas. The other area of concern is also in the northeastern corner of the property where a settling pond and
discharge were located. Whirlpool conducted a cleanup of this area in 1988-89,
and MDNR states that there was improper disposal of hazardous waste because
of a high content of barium in the soils. The dispute is largely one of determining mutually acceptable clean-up goals. It is highly probable that these issues will be
settled and acted upon before any site development would occur.
This area, co-owned by Auto Specialties and Whirlpool, was used as a drum
storage area for hazardous waste. It has gone through closure and is considered a "clean closure" but the paper.vork needs to be completed in order to receive
approval from the MDNR.
While MDNR will not complete its feasibility study until summer of 1992, work
to date has not exposed any unanticipated problems. Certain areas have
been less contaminated than was originally anticipated.
MDNR is anticipating Type B and/or Type C cleanup, with two years to
remove the sources. After two years, MDNR will investigate groundwater contamination and, if needed, may conduct groundwater cleanup over a five
to ten year period.
Type A and B cleanup will provide for any kind of development. Type A and B
clean-ups are predicated upon cleaning contamination to background or to a no risk level, while type C cleanup limits development to essentially surface
modifications, with no extensive excavation or penetration of soils. Type C
cleanup may be proposed for the old landfill areas on the east side of the
property or under some of the existing buildings.
Once surface remediation has been completed, development can be initiated
without hampering long-range clean up of any possible ground water
contamination. MDNR has not provided an estimate of remediation costs but has indicated that if a private party or other group were to complete the clean
up, costs would be substantially lowered.
The Edgewater area is under multiple land ownership. The two major land owners are the Whirlpool Corporation and Auto Specialties. The Auto
Specialties site is approximately 107 acres and is currently controlled by the
Federal Bankruptcy Court due to financial difficulties. Whirlpool controls about
50 acres. The remaining land is owned by private individuals, utility companies, and federal, state and local governments.
An existing residential neighborhood forms the western boundary of the study
area. Larger residences with commanding views of Lake Michigan characterize the Ridgeway neighborhood, while more modest homes make up the balance
of the area.
Jean Klock Park is located to the north of the study area, with an excellent sandy beach on Lake Michigan. The park is underutilized and facilities are in need of repair.
To the east of Edgewater is underutilized industrial land, a rail yard, a dredge
disposal area, wetlands and a salvage yard. The entrance to the Ship Canal,
an automobile dealership and numerous commercial establishments on Benton Harbor's Main Street are also situated nearby. Current studies and
actions are underway to redevelop the Ship Canal and should have a major
positive influence on the Edgewater study area.
Downtown St. Joseph is south of the study area across the St. Joseph River. An area along the Morrison Channel is currently used for the storage of
construction aggregate and the like.
To the west of the railroad swing bridge is the existing city marina. This marina serves both motorized and sailing craft. Boat storage is limited and during winter months a significant number are stored adjacent to Ridgeway and Prospect Streets. Located on a spit of land overlooking the city marina is a National Guard and Coast Guard complex. Single family residences adjacent to this complex have views onto the St. Joseph River Channel or Tiscornia Park.
The primary constraint for location of a marina within the study area is the C&O
(CSX) Railroad Bridge across the Paw Paw River. This is a fixed bridge with a
published clear height of six feet above Low Water Datum; observed height was two to three feet above the current water level. Water depths upriver of the
bridge range from two to six feet, according to NOS Chart 14930. Siting of a
marina upriver of this bridge would require replacement of the existing fixed
bridge with a swing bridge. Boats using a marina in this location would be required to negotiate three bridges on their way to and from Lake Michigan. The
Paw Paw River between the St. Joseph River and the marina entrance would
need to be dredged and maintained, and the entire marina basin would require
upland excavation.
Two other potential marina sites are immediately east and west of the
Blossomland Bridge (Highway M-63), a bascule bridge over the St. Joseph
River. These sites are existing embayments which mayor may not require
enlarging, depending on the desired number of boat slips.
The eastern embayment appears to be part of a federally maintained turning basin for cargo ships using the St. Joseph River. A marina sited here would not
be allowed to interfere with this navigation project; thus upland excavation of the
marina basin would be required. The entrance to the basin would need
protection against wakes from ships using the channel
and turning basin. Surges caused by winds on Lake Michigan may also be a
minor problem at this location.
Location of a marina on the west side of the Blossomland Bridge would require
relocation of the on/off ramps for M-63 if the existing basin is enlarged. Marina design would need to consider boat wakes and surges. At this location, boaters
would only be required to negotiate the railroad swing bridge, which is typically
left open unless a train is approaching. Of the potential sites investigated, this
location provides the best views across the river.
A fourth possible site incorporates the West Basin Municipal Marina, located just
west of the C&O swing bridge on the north side of the river. Surge and wave protection are serious concerns at this site due to its proximity to the St. Joseph
River entrance to Lake Michigan. A protective entrance and floating docks would
be needed.
Floating docks are likely to be recommended for all of the proposed sites,
even though they are counter to existing practices in the area. Short-term and
long-term lake level fluctuations can cause mooring problems at fixed piers.
3.0 Market Assessment and Development Program Alternatives
A brief market reconnaissance was conducted to confirm Chicago second
home market potentials and better understand local demand. The focus of the market assessment was entirely residential, with emphasis on the regional
second home market from Chicago and parts of Michigan and Indiana. The
methodology employed was geared to the budget allocated for this purpose.
The market reconnaissance procedure is summarized below.
• Recent residential developments in Berrien County that were oriented in
part or totally toward second home purchasers were inventoried and
analyzed. More than 40 such projects were identified, and 33 were surveyed in some detail.
Demographic and economic factors were analyzed for a 25 county
regional market area which includes portions of Michigan, Indiana and Illinois. The focus was on trends during the past decade, likely future
trends, with specific attention devoted to income and wealth
characteristics of the population since the Edgewater development will
likely be oriented to relatively affluent households.
Particular attention was given to trends in Berrien, Cass and Van Buren
counties, looking at second home growth during the decade of the 80s,
likely second home growth trends during the next 20 years, and primary
home growth potentials for the most affluent of the local population (households with incomes above $75,000).
Market potentials were estimated for almost 20 years into the future using
accepted theories regarding demographic change and social behavior such as the disbursal of metropolitan areas, expansion of the professional service
sector, increases in communication technology, changing commutation
patterns, greater longevity and affluence for target age groups and
increasing demands for lifestyle amenities.
• Maximum market potentials were estimated using reasonable growth and
capture rates.
It is important to note that market potentials are not development recommendations. The market assessment process defines the outside limits of
development achievement in the market place under the best of
circumstances, with maximum amenities. Lesser quality developments,
or nonaggressive development strategies will achieve lower capture rates and reduced product absorption.
A full report of the market assessment process and findings has been provided
in the technical memorandum dated July 15, 1991, submitted separately as
Appendix A to this document. A summary of the conclusions is presented in the following paragraphs.
• There will be a strong continuing demand for second homes along
southern Lake Michigan from the approximately 10,500,000 persons who
currently reside in the 25 county regional market area.
• Nearly 65 per cent of the second home demand will be from the Chicago
metropolitan area while primary home demand will stem predominantly
from Berrien County and, to a lesser extent, from Cass and Van Buren
Counties. Primary home demand is based on households with annual incomes in excess of $75,000; projections of second home demand
include all housing price levels.
• The relatively few second home projects in the St. Joseph area and their relatively low absorption rates are attributable primarily to the small scale and specific character of the projects and to the recent downturn in the economy rather than to inherent deficiencies in the St. Joseph location
or lack of potential demand for second homes in the St. Joseph area.
• A properly developed and managed up-scale, mixed use development with recreational amenities on the Edgewater site that provides for a mix of residential housing will attract a number of second home households as well as many households seeking primary residences.
• A high quality, mixed use development with an 18 hole golf course could potentially capture a maximum of 90 to 140 second homes annually once project development is well under way. A maximum annual capture potential of nearly 35 to 45 primary households is also possible. Prudent development programs would set much lower goals.
The projections do not assume any provision for a special economic development thrust oriented toward expanding the primary market. For example, an aggressive effort can be made to attract small to medium sized office headquarters, regional offices and R&D facilities to the site. If a quality office park is included in the project along with executive housing and attractive amenities, and if the community mounts a well organized economic development program using the site to attract such facilities, the primary home capture potential could be increased significantly.
Based on the market reconnaissance and discussions with the client group,
two alternative development programs were formulated. The first program
includes an 18-hole championship golf course; the second program has no golf course. Due to the lack of golf in competitive developments and reliance on the
Chicago second home market for the majority of residential unit absorption, the
project will be in a different category of customer appeal if it includes an 18
hole course in conjunction with deep water marina facilities capable of handling large Great Lakes sailing and motor yachts. The site quality and location are
compatible with maximizing penetration of the Chicago second home market if
these important amenities are present.
3.2.1 Development Program with Golf Course -
Maximum Market Penetration Strategy
The first development program alternative includes an 18-hole golf course as
well as two marinas of sufficient size to accommodate at least 150 slips,
including at least 30 slips for large yachts. Upon refinement of the program one of the marina basins was eliminated due to cost considerations.
Phase I Program Three Years Absorption
1995-97 Earliest Period
(slip count based on a 40 foot average slip length)
Phase II Program
Three Year Absorption
1998-2000 Earliest Period
Condo Garden Apartments
(Possible Mid-Rise) 140-180 DU
Conference Center 40,000-50,000 sf with
expansion potential to double
Hotel 150-200 Room Maximum
possibly suites product
or smaller resort inn
In addition to the 18 hole golf course which would be constructed during Phase I,
project amenities include four to six tennis courts at the club house, swimming
pool and normal Country Club amenities. The marina should also have a small
pool in conjunction with marina facilities which would include harbor master's
offices, storage space, large heads with showers for transients, a fuel dock, ship
store and chandlery, snack bar and a quality water oriented restaurant, and
provision for a few small shops (possibly in Phase II).
The residential mix would be approximately 30 per cent one bedroom/den
units; 40 per cent two bedroom/two bath units; 30 per cent three bedroom/two
bath units in the condo garden apartments. The golf course villas would be
semi-detached or clustered to efficiently use the land. All should have fairway
frontage.
Achievement of the office program assumes one prime tenant in the 80,000-
120,000 square foot range is preleased as a result of a new and aggressive Cornerstone Alliance national marketing program. This would be a small
corporate headquarters, regional office or R&D facility that would be attracted to
the site due to the quality of the overall environment, amenities and executive
life style which the project offers. Achievement of the higher end of the office range also assumes preleasing three to six secondary tenants in the 5,000 to
15,000 square foot range. The prime tenant would be in a signature building
which would anchor the commercial complex and pave the way for
conference/hotel facilities in the second phase.
The conference center/hotel is quite speculative at this point. If the maximum
market penetration strategy is followed, provisions should be made for this use
in the second development phase. Otherwise, the land area could be allocated to additional office or residential development depending upon site plan
considerations. All program elements would include appropriate support
parking with office/hotel development allowing shared parking. Residential
parking should attempt to achieve two spaces per unit throughout. Restaurant and marina parking requirements should use normal ratios.
When considering this maximum market penetration strategy, or any reduced
version of it, the pace of development on the site necessary to carry large site development costs must be carefully considered as it is extremely important, as
outlined in the Financial Analysis (Section 5.0). Even though a much less
aggressive development program may be desired, high toxic waste clean up
costs and other high site development costs such as a deep water marina, cutting new navigable channels, golf and country club amenities all must be
amortized with project revenues or subsidies. The alternative is subsidizing
capital gaps, or otherwise funding certain costs with non or low return capital.
The pace of development will largely determine financial feasibility rather than the nature of development undertaken. Consequently, absorption potentials are
likely to be more important to the project's financial feasibility than the mix of
uses or proposed densities.
3.2.2 Development Program without Golf Course -
Less Aggressive Development Strategy
The second development program alternative would not attempt to maximize site development potentials, and would not press for maximum market
penetration and the higher capture rates which the golf course community
alternative could achieve. The less aggressive alternative could be phased
differently and spread over a longer absorption schedule.
5-10 Year Absorption
Schedule 1995-2005 Period
Residential 150-200 Units (predominantly townhouse
and garden apartments with some single family homes)
Office Space 80,000-200,000 sf (no signature building - suburban office clusters)
Marina Facilities 80-150 Slips High and Dry Storage Launching Ramp and Parking Lot
This development program could be phased and scheduled a number of different ways depending upon developer desires, site improvement costs and a
market assessment update conducted toward the middle of this decade. This
smaller project would require less aggressive site development techniques and
costs. Marina slips would be smaller with the largest slips accommodating sailboats up to 40 feet in length, 12 foot in beam and five foot draft.
Other building program alternatives are possible depending upon development
strategy and financial feasibility. Client desires and toxic waste removal costs
may be the major determining factors in the ultimate decision on which program
approach to follow.
4.0 Land Development Alternatives
The development program derived from the market assessment includes 674 residential units, a 285,000 square foot office complex, 24,000 square feet of
retail space, a publicly funded conference center and a 1 SO room class A hotel
overlooking the waterfront. A golf course was viewed as a highly desirable
element, if feasible on the site. Using this development program, several alternative concepts for development of the Edgewater site were prepared.
The alternatives explored varying arrangements of residential products, from
single family detached units to higher density multi-family condominium
apartments. Strategies for providing maximum amenity for the residences were tested. The Development Opportunities Diagram (Exhibit 4) illustrates the
underlying design objectives from which the alternatives were developed.
These objectives were to:
• maximize the potential of the waterfront as a setting for marina-oriented
residential development
• create an amenity focus for the internal portions of the site (the former industrial parcels)
• provide sites for employment and commercial uses as well as an
appropriate variety of residential products
• respond to the onsite environmental constraints with appropriate land
uses
• integrate Jean Klock Park into the overall concept.
The optimum location for a marina was determined to be the area west of the Blossomland Bridge. Since development of a marina was given high priority as
an amenity focus for Edgewater, this element remained consistent in all of the
alternatives. The point west of the municipal marina was viewed as a high-viSibility opportunity site in all of the alternatives.
•
DEVELOPMENT
0 EDGEWATER
AREA
Sr. Joseph. Michlg.n
EXHIBIT 4
a major new inlet from the St. Joseph river extending deep into the site,
creating a waterfront amenity for the residential development sites, with a
navigable channel connecting the inlet with the Paw Paw River. Various
configurations for the inlet were considered.
a 9-hole golf course occupying a significant portion of the available land
between the railroad, Upton Drive, Klock Road and the Paw Paw River.
an "inland lake" as the amenity feature for residential development, with no connection to the St. Joseph River and minimal channel connections to the
Paw Paw River under M-63.
an 18-hole golf course extending off-site both to the east and to the
northwest. This alternative permits the introduction of a championship-
quality course which would be a significant amenity in the regional market,
particularly in combination with the waterfront amenities and access for
large recreational boats.
Of these elements, the 18-hole golf course was determined to be the most
viable, both from a cost/benefit and amenity perspective. Golf courseoriented
residential development is also accommodated.
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• 5.0 Edgewater Development Plan
Comparison of the advantages, disadvantages and feasibility of the various alternatives led to selection a preferred concept. After further refinement of the
concept, the Edgewater Development Plan (Exhibit 5) was completed. The
Development Plan includes a variety of luxury housing units, a conference
center/hotel, a marina, restaurants and retail uses in a country club setting with an 18-hole golf course, tennis complex and Lake Michigan beach access.
Adjacent to attractive downtown St. Joseph, the site has extensive deep water
frontage and direct access to Lake Michigan at the mouth of the St. Joseph
River. Highlights of the plan include:
• A 175 slip marina is proposed west of the Blossomland Bridge. This,
combined with the turning basin east of the bridge, provides the setting for
approximately 126 waterfront homes, marina-oriented retail and restaurant uses, waterfront parks and a prime Class A office building. This highly
visible setting provides excellent visual connections to downtown St.
Joseph and also is the waterfront gateway to the Twin Cities.
• An 18-hole championship golf course is proposed, with ten holes located within the Edgewater study area and the balance in Klock Park
and on the eastern side of the Paw Paw River. A clubhouse with
additional recreational amenities is centrally located to serve the
community. Single family detached residential development is arrayed around the golf course, with frontage on four
of the holes. The residences along the western edge of the study area are compatible with the existing
residential neighborhood.
• A new road off M-63 provides convenient access for the
proposed development.
• Generous landscaped buffers are provided to separate the
residential areas from the major road and rail corridors and the utility sub-station.
• Jean Klock Park provides excellent beachfront opportunities
for community-wide recreation.
• A conference center/hotel is proposed for the St. Joseph riverfront, taking advantage of its location near the golf course, waterfront
amenities and downtown.
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6.0 Financial Analysis
A financial model was constructed specifically for this project in order to determine a financially feasible development program. The model was run five
different times to determine two alternative development programs that pass
basic feasibility tests. One of these programs emphasizes residential development, while the other reduces the residential unit count and adds more
office development should that market strengthen during the post recession
period.
Several additional sensitivity runs of the Edgewater Financial Analysis model were conducted in early January, 1992 to test the impacts of changes in capital
costs and residential building program, the impact of not securing land in Jean
Klock Park for several golf holes and a significantly retarded residential
absorption schedule.
A brief summary of the financial analysis procedure, findings and
recommendations is provided in a separate memorandum. A complete
description of the process, technical documentation and the runs of the
model are available in the technical memoranda dated October 22, 1991 and January 28, 1992, submitted separately as Appendix Band C to this
document.
When residential and office markets strengthen as the nation and region moves
out of the current recession during the next few years, the sponsors of the Edgewater Project have the option to adjust the development program in the
direction of either larger residential or office components as policies and market
circumstances may dictate. The high amenity development with golf and
marina amenities constructed during the early stages of the project is recommended to maximize market penetration in both office and residential
markets. The plan described in Section 4.0 portrays a top-quality project which
permits projection of the relatively high land prices and the absorption schedule
necessary to achieve financial feasibility. The projections of residential unit absorption are considerably less aggressive that the potential indicated by the
market analysis, given the likely future strength of the Chicago second home
residential market.
7.0 Fiscal Impact Analysis
The purpose of the fiscal impact analysis is to estimate the present value of net direct and indirect tax flow increases to the City during the first 10 years of the
project if it is constructed and occupied as planned.
As described in previous sections of this report, the development program for
Edgewater includes 674 residential units, a 285,000 square foot office complex,
24,000 square feet of retail space, a publicly funded conference center and a 150
room waterfront hotel overlooking the St. Joseph River and a 175 slip marina.
With a market orientation toward the Chicago second home market and local
residents, the project anticipates phased development between 1995 and 2002
assuming normal recovery from the current economic recession.
The City of St. Joseph will benefit from the project in many ways. Economic development benefits include job generation and tax base expansion. Also
important will be the psychological benefit and increased confidence in the
local economy from having seen a derelict industrial property transformed into
an attractive resort community on a prominent and highly visible site at the community's waterfront entrance.
Full detail of the assumptions, calculations and conclusions of the Fiscal
Impact Analysis is available in the Technical Memorandum dated January
1992, submitted separately as Appendix 0 to this document; a summary is provided in the following paragraphs.
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Table 4.
Fiscal Impdct Summary fdgewdter Development 1992 ($000'5)
1995 1996 1997 1996 1999 2000 2001 2002 2003 20(
Real Property Values S5,224 S24,335 S51,929 S66,897 S125,437 S166,819 S221,696 S247,656 S309,992 S) 22,39
Personal Property V"lucs S653 S3,042 S6,4~1 S11,112 S15,660 S20,652 S27,737 S30,957 S38,749 540,2~
lotal Real & f'erwn,,1 Property V"lucs S5,077 S27,376 S5/1,421 S 100,t)()~ S141,117 S167,671 S24~,633 S276,613 S348,741 ~) G2,6~
Assessed Values S2,939 S13,668 S29,210 S50,005 S70,556 S93,836 S124,617 S139,306 S174,371 S181,3~
Estimated Property Tax Collections S500 S732 S1,562 S2,673 S3,772 S5,017 S6,673 S7,446 S9,323 S9,6~
Taxes Lost from Discontinued Land Uses (S240) (S250) (S260) (S270) (S281) (S292) (S304) (S316) (S329) (S34
Estimated Slate Tax Rebates S2 S4 S7 S12 S16 S20 S23 S25 S36 s:
Total DireLt Tax Rcvenues S261 S466 S1,309 S2,41.5 S3,507 S4,745 S6,392 S7,157 S9,030 ~9,J(
Indirect 1 ax Revenues S52 S194 HIl5 S1,932 S3,507 $5,694 $lJ,94~ S10,735 S13,545 514,01
folaf Direct & Indirect Tax Revenues S313 $660 S2,095 $4,347 S7,014 S10,436 $ 15,342 S17,892 S22,575 SZ},4i
Cumulative Tax Revenues S313 S994 S3,086 S7,435 $14,449 S24,667 S40,229 S58,122 S80,697 j 104, 1i
Present Value of Total Direct and IndireLt
Taxes @ 10')(, Discount Rate S45,694
Local governments in Michigan derive the vast majority of their tax revenues
associated with real estate development projects from real and personal property taxes. Increases in the resident population as a result of development
also result in increases in the percentage of tax rebates which Michigan
municipalities receive from the State. The primary source of these taxes are
sales, income and single business taxes.
Fiscal impact studies of new development in Michigan communities generally focus almost entirely on real and personal property taxes. In this analysis, tax flow increases to the City of St. Joseph from sales tax rebates have also been estimated. The impacts in the fiscal analysis section of the report pertain to the City of St. Joseph only. Tax revenues raised for other entities such as public schools and the County were disaggregated. Only those fiscal impacts directly affecting the City government were dealt with.
The analysis focuses on the first 10 years of the anticipated development cycle. During this time the project would be completely built out. Even if the development program is delayed, it is expected that the majority of development would occur during this period; otherwise, the project would be financially infeasible.
A calculation was also made of indirect fiscal benefits of all types. A major
development project in a depressed economy will have a significant impact in stimulating other development and triggering investments that have pent up due
to a lack of confidence in the local economy. In addition, investments will occur
in existing businesses in order to provide materials and services to this project
during its construction period and during operation. These investments will result in new businesses and expansions locally that will, in turn, produce
increased tax flows to the City of St. Joseph. However, these indirect benefits
are extremely difficult to estimate. A very conservative estimate of indirect
impacts was derived from a single rolling multiplier that increases as the project continues during the late 1990s and shortly after the turn of the century. The
multiplier used is well below thresholds employed in other studies.
Finally, the analysis included a calculation of the present value of the net revenue stream. Estimated tax increases and tax losses to the City of St. Joseph that will result from implementation of the Edgewater Development Plan during its first 10 years yielded a cumulative total tax yield for the project's first decade, and the present value of that revenue total was calculated.
Fiscal benefits to the City of St. Joseph will accrue mainly through personal
and real property tax increases, and state tax rebates. Net direct and indirect tax revenues received by the City of St. Joseph as a result of the Edgewater
development are expected to total $104 million during the decade between
1995 and 2004. The present value of this net revenue stream is approximately
$46 million. The fiscal impact summary is presented in Table 4.
Direct employment benefits are estimated from 570 to 935 construction related
jobs during a 10 year building program. This calculates to approximately 8,800
man years of employment during the next decade associated with all site
development and construction activities. Permanent on-site employment created by the project is estimated to be 1,470 jobs of which as many as 890
jobs could be oriented towards unskilled and semiskilled labor, service and
support jobs and the clerical and administrative categories.
Thus, the Edgewater development is presently worth $46 million to the City of St. Joseph as planned, plus the employment and confidence-building benefits.
Therefore, it would be fiscally responsible for the City of St. Joseph to invest up
to 546 million in this development in order to generate the employment which the project will provide. Net tax revenues will equal that figure, or "zero out" a $46
million front end investment.
The development plan requires public investments in toxic cleanup, road improvements and a conference center in order to realize the project as
planned. It is hoped that toxic cleanup and road improvements can be funded
with state monies. If necessary, the conference center could be funded with
local bond monies if other higher governmental sources are unavailable. Fortunately, that local public investment can be postponed for a number of
years - the conference center/hotel is not programmed to come on line until the
year 2000, thereby not requiring its capital investment until 1998. At that time
the project will have been underway for at least five years and the City can conduct a risk assessment and updated feasibility analysis of the conference
center/hotel element.
In addition to being financially feasible, this planning program suggests that the Edgewater development will be very important to the future of the City of St. Joseph. It is fiscally responsibly for the City to invest its capital along with that of the State of Michigan to insure that this important project proceeds rapidly into development in parallel with the anticipated economic recovery during 1992 and 1993. The benefits justify a sizeable public investment now, to get the project started and to position it for top priority consideration by national and international development companies.
8.0 Implementation Strategy
Edgewater provides a tremendous opportunity for the Twin Cities to develop a quality waterfront address. In order to realize this goal, the focused attention of
public and private leaders and the commitment of financial resources will be
required.
Implementation of the plan will call for coordinated and aggressive action by the
public and private sectors, recognizing the specific conditions of development
and understanding the long-term nature of Edgewater's revitalization. This section outlines the basic framework for plan implementation beginning now
and for the years ahead.
Complex real estate development projects are difficult to implement. In most cases, specific prerequisites or "conditions of development" are identified that
need to be resolved before a plan or a project can be implemented. While many
project-specific conditions might be identified, we believe that there are a few
primary conditions that must be met for the successful implementation of the Edgewater Area Plan. These include:
• Public and private leadership should agree on the Edgewater Area Plan,
and endorse its implementation in principle. Consensus should be
achieved on the basic principles underlying the Plan so that it can be used as a guide that is flexible and that will change and evolve over time.
• Public and private leadership must embrace the concept that Edgewater's
revitalization is really economic development that will have a positive
impact on the entire community.
• The Cornerstone Alliance should be designated as the entity with
primary responsibility for Plan implementation.
• Public and private leadership must be committed to identifying and securing
major new sources of public funds from state and federal sources as well as
through new local sources. These funds will be essential to offset the costs
associated with the clean-up of environmental hazards, infrastructure
improvements, and a publicly funded conference center.
• Public and private leadership should be committed to the future concentration of available public financial resources on agreed upon high priority development projects included in the Edgewater Area Plan.
• The acquisition of property for public purpose, where needed to achieve plan objectives, should be supported.
• Public and private leaders should recognize the long-term nature of the
Edgewater Plan and commit themselves to persistent, incremental
development of opportunities identified in the Plan.
• Public and private leadership should support a well organized marketing and promotion program, to be designed by the Cornerstone Alliance, that will foster increased awareness of Edgewater in order to attract residents, businesses and visitors.
Early and sustained action is essential to capture the opportunities inherent in
the Edgewater area. Priority actions include:
• Continue to promote the Edgewater Area Plan to both public and private sector leadership.
• Continue to monitor and actively participate in the site remediation
process with MDNR.
• Initiate a solicitation process to attract local, national and international
developers to participate in the development of Edgewater.
The funding strategy is predicated on the fact that public and private investments in Edgewater will strengthen the tax base, create jobs and stimulate other
economic development activities in the area. The Edgewater project has been
designed to stand on its own as a private real estate development exclusive of the toxic cleanup with State DNR funds; road improvements by the State
Highway Department; and shoreline stabilization
(bulkheading) with State DNR funds. Beyond this the project will be enhanced
by the use of traditional Federal, State and local funding sources in support of
the project. The City has effectively used general obligation and revenue
bonds, along with a wide variety of Federal and State funding sources. While
Federal funds have been in short supply in recent years, some funding
continues to be provided. Specific mechanisms that may be utilized in the
future include:
• Community Development Block Grants (CDBG) have provided funding for housing and public infrastructure in downtown in the past and could be used for public street and park improvements in the future.
• Industrial Revenue Bonds (lRB) can be used to provide low interest rate funding for projects ranging up to $10 million. Interest covering up to 100 percent of the project loan is provided at 65-70 percent below the prime interest rate.
• Tax Increment Financing (TIF) is a procedure whereby a municipality will issue bonds to provide infrastructure for private development projects. The incremental increase in tax revenues from the higher property base resulting from private development is pledged to the payment of municipal bonds. Under Michigan law this tool is of limited use.
• City Bonds (General Obligation or Revenue) can be issued for specific projects or to fund activities in a special interest.
• Tax Incentives and Abatement Programs often assist in the development of rehabilitation projects. In an abatement program,
property taxes can be reduced or eliminated for a number of years,
followed by gradual increases in taxes until a certain period, say 20
years. Such programs are locally mandated.
• Downtown Community Mortgage Pool could be created by the City and participating St. Joseph and Benton Harbor banks interested in financial spin-offs associated with a revitalized community. A number of such pools have been formed in other communities, often in
cooperation with the City government or an economic development entity. Such a pool could provide construction or permanent loans for smaller
commercial or residential projects, as well as for facade improvements
and renovation of existing properties.
• Special Grants and Appropriations from State and Federal agencies, the County, the business community, and private foundations, should be sought for special projects. In order to secure such funds, the City's leadership must creatively assert its political influence. This technique is used routinely by cities like St. Joseph that lack local resources for the planning and funding of major capital investments.
• State of Michigan Environmental Protection Bond Implementation Act could possibly provide a grant or loan for site clean-up. Although it is our understanding current policy prevents use of site reclamation funds since the project is already being funded under other state bond fund monies. Approximately $40,000,000 is available under the act and the Michigan Department of Commerce will be involved in reviewing applications and the economic benefits of proposed site redevelopment. The Edgewater area development plan, which does meet the objectives of the legislation could potentially qualify since it appears to meet many of the program's other requirements.
Edgewater has been the focus of attention for public and private leaders for the
past year. During the planning process that has resulted in a redevelopment strategy for the area, perceptions of Edgewater have sharpened to view it as
one of the most significant properties and redevelopment opportunities in the
Twin Cities.
There has been significant activity on other planning fronts such as the current
51. Joseph City Planning Process and the culmination of the Ship Canal
project in Benton Harbor. It is essential that the current enthusiasm and
momentum related to these projects be maintained especially as they relate to
the Edgewater Area.
The Edgewater Area Action Strategy that follows provides immediate and long-
term steps that can be taken to bring about implementation in a logical and
productive fashion. These actions include:
1. The Mayor's and City Council's of 51. Joseph and Benton Harbor should
accept the Edgewater Plan as the official policy guidance directive to be
used in making decisions on all new development and public investment.
2. The Cornerstone Alliance should continue to regularly monitor and assist in
guiding the remediation strategies of the MONR for the Auto Specialties property gaining maximum benefit for the both communities.
3. The Cornerstone Alliance should develop regular and continued dialogue
with the MOOT to discuss transportation issues that may influence Edgewater as suggested during an April 3, 1992 meeting between the
Cornerstone Alliance and MOOT.
4. The Cornerstone Alliance should explore a development organization
structure to establish a primary development authority, the Edgewater Redevelopment Authority (ERA) responsible for implementation of the
Master Plan elements. The Cornerstone Alliance, working cooperatively
with the City and the private sector, should assure that this authority is
adequately funded and staffed to carry out its essential mission.
5. Available professional and financial resources should concentrate on
selected high visibility and high impact projects that mutually benefit the Edgewater Area.
6. A unified development negotiation strategy, through the ERA, that openly involves both public and private sectors should be initiated. .
7. Perhaps the most significant impact on the Edgewater Area will be the
ability to successfully attract developers, including existing local developers,
with projects in predevelopment and development planning stages. Another important factor will be to effectively work out development negotiations that
will lead to development and will create an atmosphere of mutual trust and
respect that will enhance Edgewater as an important place for investment.