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BUCHANAN — The Buchanan City Commission has approved a 12-year obsolete property rehabilitation tax break for a new development project in downtown Buchanan. An investment group is planning a $3.5 million boutique hotel development on Days Avenue.

     The property is located at 206 Days Avenue in the downtown area and was the former site of a livery stable as well as other businesses over the years. Developer Michael Reed said after the meeting that they hope to be open in the spring of 2025 and have 10 units where people can stay as well as a bar and facilities for weddings and other events.

     Reed and Community Development Director Richard Murphy said that the project is in line to get a $1.2 million state grant to go toward the costs of rehabilitating and renovating the property. They said that 50 short term construction jobs are expected to be created and 20 long term jobs. The property currently has an assessed value of $3,300.

     City Commissioner Dan Vigansky questioned the assessed value of the building and moved that the city get an independent appraisal done before approving the tax break. That motion died for lack of a second. He later voted to approve the tax break.

City Commissioner Patrick Swem continued to abstain from votes related to the project, citing a “business interest.” He had also abstained last August when the city commission voted to establish an obsolete property rehabilitation district for that area. Reed said after the meeting that Swem is part of the investment group funding the project.

     Murphy only had good things to say about the project and what it means for the city. “I’m very, very excited to be before you for this critical step in the redevelopment of the property,” he said. “It never gets more exciting that this, when an old historical livery stable becomes a boutique hotel.”

     “It’s a boon for job creation and economic development,” he added. “We only have to look at what Journeyman did in Three Oaks. We’ve gotten the attention of the state and the Michigan Economic Development Corporation and have gotten over $1 million in grants lined up.”

     Murphy said the state is giving a revitalization and placemaking state grant which he called “the holy grail of grants.” “There’s just one piece of heavy lifting left with you approving the obsolete property rehabilitation tax exemption,” he said.

     The project also got endorsements from Zach Vaughn of Cornerstone Alliance, Arthur Havlicek of the Southwest Michigan Regional Chamber of Commerce and local businessman Michael Rowland. Rowland also took advantage of an obsolete property tax break to fund improvements on the former Hometown Video property he purchased at 101 Days Ave.

     Rowland noted that encouraging investments in lodging and hospitality has long been a goal of local community leaders and this project helps fill that need. “I hope you continue this precedent of government supporting local businesses,” he said.

     Also Tuesday, commissioners held a public hearing on the new 2024-25 budget for the fiscal year that starts July 1. City Manager Tim Lynch went through the city budgets and pointed out the many instances where costs have been cut and spending reduced.

     “I would note that I am quite pleased with the city’s budgets and finances,” Lynch said. “The city is in good shape. There are several areas where we are under budget and some department heads are asking for less money in the new budget. Each major fund has a surplus of revenue over expenditures.”

     The new 2024-25 general fund budget calls for $3,680,067 in revenue and $3,395,650 in expenditures. The major street, local street and the water/sewer funds are also projected to have surpluses in the new fiscal year.

     Lynch also went over the long term capital improvement budget which covers capital needs through 2033-34. That list includes $1.1 million to fix the Days Avenue/McCoy’s Creek sink hole, $350,000 to fix the Front Street retaining wall and $250,000 to demolish the Baroda Tire Center/Buchanan Feed Mill property.

     When asked by Vigansky, Lynch said he is meeting with engineers and is hoping to get work started right away with replacing the retaining wall on Front Street. He said a state permit has been submitted for the Days Avenue/McCoy’s Creek sink hole and he hopes that work will get started this summer.

     Lynch also commented on the upcoming Front Street infrastructure project that will start this fall. Most of the work on the $15.3 million project will be done between the spring of 2025 and August 2026. The city is looking to get low interest loans to help pay for the project.

     In other action Tuesday, commissioners approved the install and takedown calendar for the Buchanan Scarecrow Charities this fall. Scarecrows will be installed starting Aug. 25 and will be mostly taken down by Nov. 1.

     Commissioners also approved the annual microbusiness permit renewal for Walpole Enterprises on Carroll Street and a resolution authorizing the conveyance of the Ross-Sanders House at 107 West Front St. to the Michigan Gateway Community Foundation.

     Commissioners authorized city staff to add delinquent utility bills to the responsible parties’ summer taxes and approved the final budget amendments for the 2023-24 fiscal year that ends June 30.