Thursday, November 4, 2021

Bond sale to fund demolition of former hospital

The Northville Township Board of Trustees unanimously approved a $12 million bond sale to continue demolition of the former state psychiatric hospital buildings at Legacy Park. 

Board members voted on the resolution at a recent special meeting. 

“This action will bring over 96 percent of the property to a natural state,” said Township Supervisor Mark J. Abbo. “Once these buildings have been removed, we can begin implementing plans for public use of the land.” 

Eleven buildings and a series of tunnels still stand on the 332-acre site. When this demolition phase is complete, any remaining buildings will be clustered in a single 10-acre parcel, leaving the remaining 96 percent of the property for use as an active recreation site as outlined in the Township Master Plan. The demolition will begin as early as the summer of 2022. 

The township will repay the bonds with revenue collected by a Brownfield Tax Increment Financing (TIF) district created earlier. No money from the township general fund will be used. 

“The time for action is now,” added Township Treasurer Jason Rhines. “For reasons including, but not limited to, historically low interest rates and continually rising costs of demolition, this is an opportune time to proceed with this project, which has been identified as a priority by our residents.” 

Rhines said he believes that with increasing property values, the prospect of further development on the property adjacent to Legacy Park, and careful and resourceful use of available funds, Northville will be able to remove any remaining buildings within the next few years. 

Northville purchased the former hospital property from developer Schostak Brothers & Co. and their partner REI Investment Group Inc. (REIS). REIS still own the 82-acre development at the southwest corner of Seven Mile and Haggerty roads. 

Taxes generated from the REIS development provides the brownfield TIF revenue, which will be used to repay the bonds. This TIF district captures the taxes on the increased value of property within its boundaries. Revenue grows as development occurs, and the value of the property increases. Approximat-ely 30 acres of the corner remains available for development. Abbo said he expects new development to generate enough revenue to pay for any remaining demolition costs. 

“This financing method achieves an important Township goal without diverting resources from other important services that our residents expect,” Abbo said. “The future of this property will enhance the quality of life for future generations.” 

“This is an exciting time for our community,” concluded Trustee Mindy Herrmann. “For years we have wanted to provide our residents with the opportunity to utilize this property. By taking this action, we are one step closer to making that a reality.” 

The Township acquired the property in 2009 after a millage election. It included 20 buildings, a water tower, a power plant, and other infrastructure. The first buildings were demolished in 2012. The signature nine-story, 252,174-square-foot psychiatric hospital came down in 2018.