Councilmember Mary Waters.

Mr.

Chair, you have a form present.

Thank you so much.

That'll move us on to approval of the minutes.

And if the members of the committee have had a chance to review the minutes, uh entertain a motion to approve.

Motion.

Without any objections, the minister and approve.

That moves on to chair remarks.

I'll keep it very brief.

I hope folks are staying safe in this winter weather.

Uh, just for folks to know, um, I just want to reiterate that we do have for senior residents and folks who have disabilities our snow removal programs.

So if you have any questions about that, please give our office a call at 313-2242151.

And uh, we also have warming centers available for folks.

So just want to make sure folks stay safe out there.

Um, and that will wrap up my remarks.

Uh I will now call for public comment.

We will cut off public comment at 11.

Um with that, do we have any folks in uh person today for a public comment?

Seeing none, do we have folks on Zoom?

Yes, hi, Mr.

Chair.

We have five hands raised as of right now.

Okay.

Uh we'll go ahead and take folks from Zoom.

All right.

Our first caller is owner Papa.

Oh, sorry.

You uh will have two minutes for your public comment.

Thank you.

Go right ahead.

Caller, are you there?

Uh good afternoon through the chair.

Um, may I be heard?

Yes, you may.

Good afternoon.

Good afternoon.

I am actually calling about 6.4 this on the um agenda today for the DDA and annual report.

Uh is very disturbing to me.

It seems like there's missing information.

Um the expenditures seem like there's nothing um that really benefits the citizens.

I see Michigan Real.

I see they get a lot of funds from the library and um other areas.

So and and and the TIFF ends in 2051, is that is that correct?

25 years.

I don't we don't need the DDA to be around 25 years.

I think they're inserting themselves into you know this this entire um uh city population because the DDA has not resulted in what I think this the council previous council thought it would.

That's the reason why they're taking our property tax dollars and plugging uh the hole for those people, those businesses that were supposed to come to the city.

Um if if a public company uh uh lost millions of dollars the way this body has failed to be able to explain what happened to all of the money and also audit failures.

Um I heard Miss LeBoe say that um she didn't have uh income verifications on programs that require you know you to know their income.

Miss Lebo, uh she reported that to the council, and that seemed very strange to me that no one took her up on that.

And and if they if you would read the plant morant, that is one of the the the things that was that the city was dinged on was income verification proof.

Um this has been going on for uh uh a long time.

And I I I just I just believe that you a lot of this is fraudulent.

Let me let me just say that.

And and and and the government, it it appears that fraud is not punished the way it's punished in the in the public sector.

Um I what what I see on this report, someone needs to come down and explain that entire report and tell me why we don't know unbonded uh principal debt and and and principle and interest being paid.

Thank you.

Thank you so much.

And um, yes, we'll definitely have a discussion on 6.4.

Um moving on to the next call.

Our next caller is William M.

Davis.

Commissioner Davis, you have two minutes.

Good afternoon.

Two minutes.

Uh good afternoon too.

How can I be heard?

Yes, you may.

Hello, that you heard.

Yes, you may go right ahead.

Oh, okay.

I I also am in agreement about six point four.

I you know, I think in general, it should be an audit made of all the people, all the entities that got tax abatements and that are not really living up to their agreements.

And also, I find it very upsetting that you have people like uh Lil Caesar Arena that don't pay rent.

You know, why should I be paying more more for taxes and property and what have you than a lot of these major corporations?

And you know, my pension was cut and I have an annuity called back, and my cost of living was, you know, all this was done almost 13 years ago.

But yet, these entities, they can make plans, they could do this, they could do that, and they don't pay their fair share.

Um I'm a little older than some of y'all.

And I remember the Joe Lewis Arena.

The city used to get revenue from that, you know, be it from concessions, uh, marketing, and all sorts of stuff.

You know, it seems like as of late, most of these deals since the 2000s have been very poor for the city of Detroit residents.

You know, it benefits downtown people, it benefits some of these corporations, or most of their board of directors and don't even live in the city.

I think we should be auditing everything.

And if they're not living up to their original agreements, you know, some adjustments need to make.

You know, they call back my pension, my annuity, but it yeah, yeah, I only call back the little people.

See, y'all need to be doing more to make sure that there's a proper flow of you know, you know, to help retirees, the help seniors, to help young kids, you know, the to help more people than what's going on today.

Thank you.

Thank you, Commissioner.

Next caller.

Our next caller is phone number ending in 169.

Phone number ending in 169.

You may go ahead.

You have two minutes.

Um, hello.

Um, can you guys hear me?

Yes, we can.

Good afternoon.

Good afternoon.

Um, first off, this quote is by Sylvester Stallone.

There's a natural law of karma that indictive people who go out of their way to hurt others who will end up broke and alone.

Um, thank you for praying for Brother Cunningham.

Thank you for not being fake.

Um, I'm talking to you at home.

A lot of you are fake, either love him or hate him, but you can't not do both.

Some of you council members have millionaires and billionaires holding your puppet strings, forcing you to be evil to Cunningham to discard him and harm him.

Council members, be a free spirit, speak from the heart and be kind to him.

Thank you for my time.

Thank you.

Uh next call.

Our next caller is phone number ending in 039.

Phone number ending in 039.

You may go ahead.

Good afternoon.

You have two minutes.

Allow me to introduce myself.

My name is Ruben James Crowley Jr.

Now to the left of you, you have a TDM public official.

That's Latitia Johnson.

She represents District 40 District 4 as well as other districts.

And then to the right of you is Mary Waters, another TV and public official.

Um at large.

Now, Janet M.

Winfrey and Gina Avery Walker and Daniel Baxter are busted.

I should see valid fraud.

It's been going on for years and years and years and years and years in the city of Detroit.

So uh counselor, you're the head of the budget audit and finance committee now.

And what I'm about to expose and disclose to everybody is that the whole city of Detroit is corrupt and corrupted as F.

And I'm Mr.

Rue, and Nini want what you want.

Now, the former chairperson of this committee, uh Fred Joe Hall III.

I spoke with him over this past Friday uh at the London Top House, him and his wife.

We had a long conversation, and now he totally understands the complexity and the completeness of what I did during my investigation.

I told him everything.

So he has a different outlook and take on the murder, murder, Phoenix Coleman, DPD case 20-11 112.

Now, with the cover-up of the murders, I'm going to speak about the 11 precinct.

We got a Sergeant Greg Torville and the Lieutenant Carl Pesmark over there who is now today because the commander and captain were not there in charge of the 11th precinct.

There are they are all right, sir.

That's your time.

Thank you.

Yes, we have one more caller for public comment before you cut it off.

It is Jadante Smith.

Mr.

Smith, you have two minutes.

Good afternoon.

Good afternoon, may I be heard?

Yes, you may.

So I just want to start off DeDante Smith, Vice President of the Helen Street Block Club.

Just want to preface that.

I had an excellent meeting with one of your staff members, uh, Sherman McCampbell.

Uh I can't remember her name.

She gave me excellent advice, and I appreciate that.

I had a wonderful conversation with Conrad Mallet earlier where he told me he does not respect power of attorney over properties, even though they are not an active litigation.

So specifically speaking to 1940.

And uh it seems like Conrad Mallet has a personal vendetta against myself.

And I have the fact I have a deck of cars with evidence against him and Scott Benson and corruption and things of that nature.

And so I would definitely bring that stack of cars out whenever I need to.

Um to Miss Miller, I'm gonna be very nice to you, but I will tell you I have been coming down to city council for years advocating for district five, district one, district four, district three, district two, district seven, every single district for years and years and years.

And so I will not stop.

Nothing to do with me running for office, anything like that.

So I will come visit you today at day four.

Also, um Linda Bernard, who's a former uh Detroit Board of Police Commissioner, had a lawsuit against Lobus Williams in District 2 for Board of Police Commissioner, where she was cheated out of her seat, maybe because she decided to not play ball.

But I'm gonna join in with Ruben Crawley and uh Pastor Sewell and I'm also joining with Moan Jackson about election fraud.

It is definitely real, it is definitely happening.

And there's a 50-page lawsuit that I have read with my own two eyes to show that the election fraud is happening and that we are being being cheated out of our seats from it.

We've also seen what happened with what Commissioner Morris right now, how they he's been tried to be routed, but there's a 50 pay lawsuit against Lavish Williams, who changed his name, who's also a convicted felon about his election fraud and the fact that he take he took people's names and fraudulently signed them on the ballot.

There's a lady named Glenda in this lawsuit where he has a completely different signature versus the one that's on her mortgage application.

You also had a son sign for a mother, you had a husband sign for a wife.

Only have 303 signatures, and most of those signatures should have been struck out because they were fraudulent.

He should not have made the ballot and election fraud is actually happening.

Thank you, Mr.

Smith.

I believe that bring brings us to the end of public comment.

Um agenda, there is no unfinished business under new business.

We have 6.1, the financial report for the five months ended in November 30, 2025.

What that I'll entertain a motion to discuss line over 6.1.

Some move.

Without any objections, um, I believe we have uh Mr.

Donnie Johnson um from the CFO's office.

Good afternoon, Mr.

Chair and members of the committee.

My name is Donnie Johnson, and I am the acting deputy chief financial officer and budget director for the city.

Uh today, if I could be promoted to panelist and given sharing abilities, uh, we will be presenting the um financial report for the month of November of last year.

And um and the year up to that date.

Okay.

All right.

Uh so as I said, this report is through for the first five months ending November 30th, 2025.

Uh we're happy to um announce that uh Chief Financial Officer Tanya Sodemeyer has been reappointed by Mayor Sheffield as the city CFO, and the Office of the Chief Financial Officer has continued its work with the uh new administration to ensure a smooth and effective transition.

As you know, these appointments are before this honorable body and the body of the whole uh um the the body as a whole for approval.

Uh the city's February revenue estimating conference will be held on Friday, February 13th, 2026 at 1 p.m.

The conference is held to review the economic outlook and approve revised revenue estimates.

The city completed um its audit and filing requirements for the fiscal year 2025 single audit and annual comprehensive financial report or ACFER and associated information with the State Department of Treasury and the Municipal Securities Rulemaking Board before December 31st, 2025.

And we met all of our required deadlines, and these reports can be found on the OCFO financial reports webpage.

So that's DetroitMI.gov slash OCFO, and that will take you um to the reports.

All right, for the period and year to date report, revenues continue to overperform, particularly in wagering.

As we can see, we're 20 running 24 million over on wagering collections.

Other revenues are doing well.

Those are going to be things like interest earnings.

And income taxes continue to perform better than expected year to date.

But when we get to the projection slide, I will say we are still continuing to expect that to catch up and normalize to the lower amount that we've been projecting once we get into tax filing season for both individuals and corporates.

On the expenditure side, really the only outlier here is the operating supplies budget.

This was a question that Mr.

Corley and the LPD finance group asked us about in writing last night.

That's really attributed again to timing.

It's still timing.

We're seeing some of expenses that we thought would come later in the fiscal year come earlier in the fiscal year.

In one sense, it's good news.

It means we won't have lag when we try to close this current fiscal year.

But we had baked in a little bit of lag that we're not seeing, which is good news.

But it does mean that when I periodized the budget, it means that I expected those experiences later, those expenses later in the year, but we're getting them now.

On the whole year wide, we'll see in projections, we're still on track for budget.

This should not be in effect on the budget.

So as a whole, um, we end up 2 million to the good in expenditures, so underspending by 2 million year to date, um, overcollecting by 36.7 million in revenues for a total of a 38.7 operating surplus through November 30th.

For the annualized budget projections, um, you can see that uh not much has changed.

When we do the February revenue conference in a few weeks, that's when we will see the um any changes and adjustments to revenues that we expect based on the latest data from there.

But as of November, we're still continuing to project that $61 million shortfall on the revenues, an overcollection on wagering taxes, and um uh overcollection in property taxes and utility users.

Um, but we do expect to still fall a net 32.2 million short on uh revenues on expenditures.

Uh we do are on track right now for a 16 million surplus.

You're starting to see that we're showing some variances there.

We are once we get to November and December, we start to be able to have enough data to expect what our expenditure experience is going to be like.

And right now, we're running under salaries and wages, primarily attributed to vacancies across the city, um, uh operating services and other professional things.

Odds are these are it's just again timing where expenses we expected to happen in this fiscal year probably won't happen until next fiscal year.

So we're looking at a projected $16 million operating expense surplus with a $32.2 million revenue deficit.

That gets us to an operating deficit of $16.2 million.

But then at the bottom of this slide, as we discussed last time I presented this report, um, there is the corporate income tax reserve fund, and that is doing what it was planned to do.

It is absorbing that um uh deficit and leaving us with a surplus.

So with that reserve in place, um, thanks to the foresight of this honorable body and um the administration, we are able to rely on that to ensure that we end the fiscal year with around a 25 million dollar surplus.

And whatever's not used in that reserve fund will fall back to the general unassigned fund balance.

I will let my colleague introduce herself for the record.

Good afternoon, Valerie Goldie, acting deputy CFO and treasurer.

And I apologize for my tardiness.

I was watching on channel 10 and it didn't come on.

It's channel 10 is sometimes delayed based off the zoo instead of the Zoom.

Good afternoon.

Thank you for joining us.

Um the amended budget reconciliation.

Um, no major changes on this one.

We continue to spend down some of our continuing appropriations, but nothing really of note from last month's report on this slide.

This one's pretty status quo for this month.

Umployee count monitoring.

As you can see, um, I'll start at the bottom where you can see the overall change.

We did go down by 89 FTE month over month from October to November.

That is going to be heavily driven by the offloading of offboarding of seasonals for the season.

So November is when we start to hit the real shutdown for winter.

Um, and so you're gonna see an 87 head drop in the general services part-time employees, and that's our grounds maintenance employees rolling off for the winter season.

Um across the board, we do see a decrease in police.

Um, one of the questions from LPD was sort of, you know, what does that mean and and and what's being done?

Um police has over the last handful of months been bringing on more recruits.

So we are working on training more recruits to fill those vacancies as they arise.

FIRE, we were lucky.

We saw an increase, so we are seeing an um success in our retention and also hiring from the last class as well as you know recruiting folks into the department.

Other than that, some of these changes you see in housing and revitalization.

This is going to be transfer of people from one program from ARPA into the general fund.

And then the IT budget is the we brought on employees from the a contract we call the DCG contract.

It is a consulting group where we had a lot of very highly skilled computer and network individuals.

They have left that contract and have opted to join the city as employees of the city.

This it saves us quite a bit of money by not contracting for those services.

So you'll see that increase in do it.

We don't see a lot of changes in do it normally, which is why I'm noting it because that isn't one we normally see a lot of activity in.

Okay, I'll start with slide eight.

Um this shows our income tax collections year to date as of November 2025, and we show that in comparison to the same time last year.

Um we can see an increase in withholding.

Um individual has gone down slightly, or I'm sorry, compared to last year is a little less than um than it was a year ago.

We can see corporate is about six million less than at this time last year, and partnerships are slightly lower.

We did have some questions on this page from um LPD from Mr.

Corley, and he asked withholding income tax collections as of November 30 are about 12 million higher than the previous year, and the positive variance was almost 8 million as of October 31st.

Does Treasury still think the higher positive variance is due primarily to positive growth in total wages earned by Detroit residents and people working in the city?

Um we do believe that that is one component of why it would be higher.

We also do think that this might be a timing issue, and uh in December we we may not see such a great difference.

Um thinking is perhaps that some of the withholding was paid in November more than the prior year's November.

Um that is our response to that question.

And also the question was if lower profitability is still causing the lower cap corporate income tax collections as of November 30 compared to the prior year.

Um and here I know I've said we've talked about it before, we do believe there is a component of lower profitability, but we also think that this is the impact of the one big beautiful bill, which um many of the components of that became fully effective for fiscal year 26.

Um if if you look at the total collection net of refunds disbursements compared to last year, we are just under four million higher than the same point last year.

The next page looks at our cash position, and um we look for at general fund, other governmental funds, enterprise funds, fiduciary funds, component units.

The final column is where we show the variance compared to the same point a year ago.

Um, and I think I last time highlighted um ARPA due to ARPA spending.

Um those are some of the highlights in fiduciary funds.

There's the 38.4 million and other, and that is the payment of the B notes to the um as part of the bankruptcy for the final claimants.

Um so the total general ledger cash balance is 1.6 billion at the end of November 2025.

Um, and and this is this reflects cash in the bank.

This doesn't reflect any of our priorities or spending, it's just a um reflection of the cash that we have.

The next slide is operating cash activity.

Um, our cash flow is holding steady.

Um if we just look at there's really nothing remarkable here.

Um our ending common cash pool still uh remains at about 700 million.

Um and that's the the range we project 700 to 800 million for the next six months.

The final um slide is the accounts payable slide, and um we can look at the top accounts payable as of November 2025, total AP for October 25 was um 2025 was 42.1 million, and then the invoices processed of 139.5 million, um less than um payments made, uh negative 130.4 million with a total AP month end of 51.2 million.

Um we did have some questions on this slide, but I can I can go through just the other boxes.

The bottom um on the left hand side shows uh current how many um invoices are still ex um outstanding by dollar amount and by invoice count.

Um there's uh we show zero to 30 days, 31 to 60 days, and 61 plus days.

Um we had questions on this part of the slide.

Um I'm sorry, I'm trying to find the questions.

Um I think the the question was are all of the invoices um uh part of outstanding purchase orders, and the answer is yes, um that is the case, and then there was a question um about these uh invoices on hold in retainage um on why those would be on hold.

Uh reasons for that might be that they're on hold because of uh dispute with the contractor.

Um and I think that's primarily the reason.

Um then we show invoices on hold and not on validation hold on the top right hand corner, and we can see um the not on hold is greater than the on hold, and then the bottom right hand corner um supplier payment metrics, as you know, the city prefers um to pay through ACH versus checks, and we can see the city's doing well with that.

All right, so we're gonna turn it back over to you, Mr.

Chair and members of the committee, and um answer any questions yet.

Thank you so much.

Um before we go to members, um Mr.

Corley wanna bring you up if you had any additional questions there, uh Mr.

Chair Gethano.

Uh we greatly greatly appreciate getting responses in writing um from Mr.

Johnson and uh Miss Eddy, that'd be wonderful.

Because I also could ask questions about you know there seems to be higher growth in property tax revenue, which is a good sign.

Um, and then other additional questions on expenditures.

Uh they touched on it, you know, uh briefly, but we're like those responses in writing for the benefit of the committee.

I guess a general question is you know, this report is through November 2025, and as you indicated, there's a February um revenue estimating conference in a couple few weeks.

What level of collections are you looking at?

Is it through December or is it through January to help you um comprise of those February revenue estimates?

Um I'd have to double check.

Um I'm pretty sure that we go we use uh through December because we're starting, we kind of have to put in uh a stop uh pencils down, and and in January is when we're processing, we're meeting with you at the um end of the month or the beginning of February, but I I do want to confirm that with my team.

Okay, yeah, because obviously, Mr.

Chair, the more data that you have, you know, leading up into the revenue estimates, the better.

Right.

Um, because you know, looking at these reports, which are great, they good barometers of what could be happening with this deal, you know, kind of early in the fiscal year.

So the more data that um officer budget and treasury can work with with those February estimates, the better.

But thank you.

Thank you very much.

Thank you.

Thank you.

And then we'll go to questions from the committee starting with Vice Chair Johnson.

Thank you, Mr.

Chair.

Uh, thank you, Ms.

Goalie.

I believe you were addressing the questions that we sent over as it relates to the accounts payable on hold.

One of the one of the questions that I was really trying to understand is because we've had some outstanding invoices in Oracle, only because the vendor has not uploaded the invoice.

And so I'm really trying to understand how long does that sit on hold within the city system before it is forfeited, if that actually happens.

And if you are not able to answer that question, we've actually submitted the questions in writing.

The CFO.

Yeah, I I do need to find out.

I've had the situation where a vendor has had trouble uploading the invoice and OCP offers somebody and they actually called them to walk them through it.

So I think that would also be helpful for a vendor.

Yeah, we we've actually done that multiple times.

And I'm not so certain as to why.

Um every fiscal year, we're still accountable and responsible for that invoice.

Uh, and if it hits at the wrong time, then it could really be problematic.

And so I'm just wondering if it gets forfeited at at any point in time within the city.

Uh through the chair to Councilmember Johnson.

Um, we are actually joined um by our chief deputy CFO, Regina Greer.

Uh, Mr.

Chair, if you would allow her to approach and join us at the table, she can actually answer these questions on AP.

She comes from the AP background.

So she is our subject matter expert.

Thank you, Mr.

Johnson.

Good afternoon, Deputy CFO.

If you could just um introduce yourself for the record.

Good afternoon, Regina Greer, Chief Deputy CFO for the Office of the CFO.

Um through the chair, uh, just to further clarify um to your point, um, the invoices are technically never forfeited, right?

Our our ultimate goal is to pay um the vendors exactly what's old.

Uh the ODFS, the Office of Departmental Financial Services, is our responsibility, my team, to ensure that vendors are reviewed if they're if they're putting their invoices on hold.

We also work with the departments um on an annual basis at a minimum fiscal year end to ensure that the city accrues any liabilities for invoices that are on hold.

We work with the departments if you know of any vendors, um, and we contact vendors to ensure that we um to assist um in uploading vendor um invoices and getting those uh invoices paid.

Okay, thank you.

I think we'll be reaching out for some assistance just to make sure that we clear everything up that is directly specific to our office budget.

Please do.

Thank you.

Thank you.

Um, and through you, Mr.

Chair, um, I I really want to see if we can delve a little deeper into Mr.

Corley's question around property tax revenue and the year-to-date growth that we're seeing.

Can you share a little bit more about where that's coming from?

I can address that question.

Um I did notice um I saw the question, and the the way there could be reasons why our estimates are lower.

I'll just start with that.

And it could be because we uh underestimated the increase in taxable value, or for some reason there was a lot of uncapping um that we didn't assume for.

So those are um a couple of things on why it could come in lower than we forecast.

Um property taxes come in, you know, two times a year mostly when the um August summer, the summer property taxes are due in August, either August 15th.

If you pay, you can pay one half or August 31st, you could pay the full summer amount.

And then we sent out the winter property tax bills on December 1st, and those were due January 15th.

So when we do the estimates, we estimate the amount and then we show monthly, we base it, we basically prorate it on what percentage did we collect um in November last year.

So I would feel more comfortable waiting until the bigger the second half of the bigger collections come in before we say there are any differences in property tax that property tax revenues are increasing based on this, only because I'd I'd rather have that concrete data if possible.

But if it does increase, those would be the the two reasons why our estimates might have been lower.

Understood it, thank you.

Um do you see any increase in payment of property taxes?

Um in terms of let me let me ask you this as well.

Um would that be factored into this because or do you just um when you determine the estimate, it's based on properties, property values with the expectation that a hundred percent of the people who pay property taxes are going to or who receive who own a property will actually pay the tax bill.

Um through the chair, uh we do have an estimate for collection rate that we base on prior years history.

I don't have the amount, but I know it's roughly 85, 86 percent collection rate for current year property taxes.

Okay.

All right, thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Uh member Waters.

Thanks, thank you, Mr.

Chairman.

And my colleague from District 4, of course, brought up property taxes.

I just I just want to point this out before I ask you any questions on anything else.

Um the uncapping um is of grave concern for me.

You know, people just become devastated when they purchase a new property and all of a sudden it's not what they thought it should be.

Uh have you guys identified ways you're gonna be dealing with that um in the future?

Have you?

Um my understanding is I mean, that's uh um a result of proposal A 1994 when the voters authorized the change.

And I think now the people who are here now are the ones that unfortunately um are reaping the disadvantages of that.

Um I I don't know if the administration uh has any plans at this point to work with uh Lansing.

You know, but that's that's how that would have to be addressed.

Yeah, I I know I I know Lansing would have to do something and and it's hitting other communities hard as well.

So I I know it's not just this community, but I just wondered if you guys had had thought about a way to deal with it uh other than Lansing.

I guess we need to go to Lansing because it is hurting us big time.

I think uh through the chair, if I might, I think uh to Councilmember Waters.

I think one thing that we can all work on is you know, no um education and notification, letting letting first-time homebuyers especially know as part of their experience of learning about the home buying process that this happens, this is what happens in the state, and and help people prepare for that reality.

Because I do I do know as a person who was at one time a home first time home buyer in Michigan as well, um, that you know it is jarring if someone hasn't sat you down and said, So here's the deal.

You're not just doing a down payment on the house.

There's this other thing that's gonna happen, and it is a big financial hit.

Add that into your planning.

And I think that's something we can all work on, um, both UCFO and this this committee and and the council as a whole is working on programs that would allow us to really increase that education for folks when they when they're dipping their toes into that that space, especially for the first time, unless you know a realtor is being a really good partner in that process, they may not sit that person down and go, hey, you know, I'm gonna sell you that get you this house, but at the same time, here's this other thing we've got to talk about.

So it's just really increasing that education.

They they don't tell them you it's all so we will participate in educational piece.

I mean, basically it's been you know, one on one, depending on who come to us with the concern, but I think it should be a broader educational piece, as we also notify Lansing and let them know how this affects us.

I know we're not the only community they get very if we if they can get various communities writing to them and and and calling them, I think maybe they'll try and figure something out.

It's my favorite way to tackle a problem multiple time multiple ways at once.

Right.

Let's tackle it different ways.

And then there we go.

We'll see what we can do.

Okay.

So I want to ask you the vacance uh this is uh regarding vacancies and budgets.

So when positions um stay vacant for a long period of time, uh, does that create savings um that can be used elsewhere, or does it create challenges um that ultimately will cost us more in other ways?

Um through the chair, uh that is a really excellent question.

Um so generally on the surface, yes, um, vacancies save us money.

Um we're not paying a payroll for something, and so we are accruing a bit of a surplus in that department.

Often that money does get used as we move through the year if our non-personnel expenses, things like contracts or you know, think of a department like general services or construction and demolition where they do facilities repairs and sort of things like that where you can have unexpected expenses, those vacancy savings often help us absorb those things.

It's just sort of part of the ordinary churn of a budget.

But to get deeper into your question, yes, per long time long time persistent vacancies can harm us in other ways.

So a good example is the facilities division and its work.

I started my career at the city at General Services way back in a day.

Um some years ago at hair at the time, if that puts some time on it.

Um, and um, you know, one of the things we always had a problem with was skilled trades, you know, getting um licensed electricians, licensed plumbers, HVAC, and mechanical tax, a lot of those positions are vacant a lot.

And it think, well, you know, we'll make do.

But what that means is we have to go to vendors to do that work for us.

We have to, you know, outsource that work, and that often costs us more in the long run to do that.

And so we're always trying to find that balance.

So when we prepare the city's budget, for example, we sit down with a department, we say, hey, you've had this number of persistent vacancies, we still need to provide this service or this function.

How how can we do this?

When the most effect efficient and effective way for the city as a government and the city as a body of residents that need services, but also is sensible from a financial standpoint, and we balance all of those things and we try to determine what to do.

So often when we bring a budget to this honorable body, we have often taken vacancies or use the vacancies in a way to say, hey, we did this analysis and we determined over all the departments we don't need this many, we can make do with fewer positions and those resources can be freed up to go to other priority things.

All right, listen up, people.

Budget time is in March.

It is it is it is rapidly you don't gotta tell me it is rapidly approaching.

See, it's it's my Christmas time.

So that's my Christmas.

So are there departments whose spending patterns are significantly um different from last year at the same point, either higher or lower?

No.

Through the chair, uh not really.

You know, I know um uh Ms.

Greer and I are kind of looking at each other.

We spend a lot of time, she and I spend a lot of time together going through actuals and expenses and things.

And um, I don't think so.

I don't think we're really seeing any particularly uh notable spikes.

I think you know, a lot of departments continue to struggle, especially the uh departments that rely on inputs of consumables, materials, um, you know, those continue to be expensive, things like lumber and cement and the sorts of things we use those inputs and and departments are definitely trying to balance those higher expenses.

Um, but so far, no major outliers.

Okay.

Well, just a quick question back again to the to the property taxes.

Are we on par with collections as it relates to other major cities?

Um I don't know about compared to other cities.

I I do know that under the state of Michigan revised municipal finance act, there are certain criteria when you file what's called a qualified statement, and one of those criteria, and this gives you the ability to issue debt without getting prior approval from the Michigan Department of Treasury.

And I know when I started with the city in 2018, I think 2019 was the first year that we were able to get that qualified status, and one of the things that was holding us back was that our property, current property tax collections, were not over, I think it might be 85%.

And so I I do think that our property tax collections current um at least are reasonable and you know, from from that state perspective demonstrates that we know what we're doing, and you know, we've got a reasonable collections rate.

That's a good thing.

I'm glad.

Um so then um just one other question, Mr.

Chairman.

Um you talked about people working from home.

Um I think I heard somebody say that.

So here's what I would understand.

People who officially work from home, they never come in.

And I'm just talking about those who don't have to say pay city taxes.

So how many of those do we have and uh and how is that affecting our budget?

A revenue stream because if you have a hundred people or five hundred people working from home at all times, they don't ever have to come in here and they don't have to be on the on our income tax payment role, then that's a collection problem.

I mean, that's a problem for us because now we don't have that income tax.

So can you can somebody speak to that, please?

I'd have to look into that question.

Um, you know, I know we do uh when we estimate do our revenue estimating, we do consider you know, an increase of um working on site and remote, but uh but your question is about people who live outside of the city of Detroit.

Yes, um, but their company is located in Detroit, but they spend no time doing physical work in Detroit.

Well, well, absolutely, and I know that that has to affect us in some way.

Of course, you know, you know, we all might have employees that that are here sometimes, or they don't work remote, so I'm not talking about those because those people are paying, those employees are paying income tax.

But for those who never have to come in, and the people that you just cited, um, I think we have to take a look at that.

Yeah, I I um through the chair, I did I will talk to our team about it and whether that's anything we can um estimate the impact of, but I I do know that unless and I hate I keep referring to state statute, but unless the state city income tax act is changed, um having that information and being able to do something about it.

Well, you can do something about it, you can not let them work from home, get somebody else that can come in and do the same job and pay income tax.

Now that we can do.

I mean, we're not gonna try to tell people, you know, hey, we can't force them, right?

Right.

But we can certainly change the way we do it.

At the city, you mean the city?

Yes, we can control that.

Yes, yes.

So that's what I'm talking about.

I understand now.

I'm sorry, I thought you meant outside of the city.

Um, no, I'm talking about city employees.

Yeah.

Okay.

Yeah, we yeah, we can do that.

Okay, I will talk to the team and we'll try to get a uh an understanding of what the impact is of that.

Okay.

And through through you, Mr.

Chairman, um, LP, did you have any idea at all?

Mr.

Chair, regarding um Member Waters, the question you just raised about people living outside the city.

Yes, working for a company that's located in the city, but they don't come in the city to work.

Um, so there's a there's an estimate that's part of the revenue development estimate for income tax revenue.

And so maybe what we can do is to try to um decipher out of that analysis that's performed to make it clear for council members to understand that it is estimated.

Now, the number of people, I don't think they can come up with that, but there's there's a trend that they look at and they do their best to try to estimate it.

And and and the estimate is become fairly uh consistent.

And so I think they feel pretty comfortable that these amount of dollars are not going to be collected because these individuals, you know, work or I'm sorry, live outside the city, but to come up with the actual number, I don't know if that can be be done.

But that's that's we'll keep that in mind when we are working with um Office of Treasurer and budget uh uh in a few weeks.

All right, I might come back with some additional questions as it relates to that whole thing, but I I wanted to bring that up.

Thank you, Mr.

Chairman.

Thank you, Member Morris.

Um thank you, Mr.

Chair.

Um, so I want to maybe clarify the question.

I thought what I heard member waters asking about was city employees um for, and this is to Mr.

Corley.

Um, so we should be able to identify specifically how many people um work for the city but work for the city of Detroit remotely, and their remote location is not in the city of Detroit.

But and I think that's where the challenge is because then they would pay half of the income taxes that those of us who live and work in the city pay.

But they do indeed work for the city of Detroit, work for the government, but they may live, and I've seen this, and it I yeah, I think it's a bit controversial, quite honestly, for individuals that live in other states, but work for the city of Detroit.

We've talked in previous committees about the talent pool that's here in the city of Detroit, certainly within the county that we can tap.

But they live outside of the state of Michigan.

I know we talked about the inability of us to require that city employees live in the city, which I think we eliminated a large portion of the city's middle income earners at that time, which impacts the city negatively in so many different ways.

That needs to be addressed.

But Mr.

Quirley, I just wanted to hone in on what the question was as it relates to identifying specifically the number of employees that work for the city that live elsewhere and work remotely.

And go ahead, because I was gonna ask another question and through you, Mr.

Chairman, and you're exactly right, because I know that there are some employees who work for the city, but they live in some other city, Boomfield, Farmerton, wherever they might live.

And so, and they do this full-time from home, so they're not paying any city income taxes.

I'm trying to find out who those, I don't have to know who they are, but I want to know the impact that it has on this city on our on our uh budget.

And I think those numbers would be easy enough to identify, I think.

So member Johnson, thank you for bringing it back because it just and and there might be some other folks in the category that he that he mentioned as well.

But but I wanted to start with those who actually work for the city.

Before we go back to Vice Chair Johnson, just so so we could um both for the CFO's office and LPD if we can get that information on the folks that are outside the city.

And I think so, um I'll have a question.

I'll go to my question, but I'll go back to Vice Chair Johnson.

Oh, you're you're good.

Thank you, Mr.

Chair.

Um, I just wanted to make another point as it relates to property taxes.

So some of you may have seen on one of our local news uh stations there was a family that moved to Detroit from Florida, I think it was Tallahassee.

Uh they purchased a property in Midtown for 450,000.

The prior owner was paying about $3,500 in property taxes.

Their tax bill was just shy of $20,000 per year.

Um there are properties in District 4's.

Their property tax bills are insane, and it always amazes me, surprises me that surprises me that people actually purchase the properties and they pay those property tax bills.

Now I'm always wondering what do they do for a living to be able to afford not only a mortgage but property taxes that are that astronomical.

Um, and so I know we've we hopefully will have within the next few weeks a discussion about the study that Citizens Research Council just completed on the local option sales tax because as we talk about property taxes, and we know that the state of Michigan only allows us to create certain taxes and thereby um only allows us to generate tax revenue via property taxes and the sales taxes in the the revenue sharing that we receive from the sales taxes.

That is what the real problem is.

The real problem is because we are looking to generate revenue for us to be able to provide city services, and then others, the county, the schools, the libraries.

And then others, the county, the schools, the libraries.

The only tax that we're allowed to create is a property tax, or it it gets added on to our property taxes.

So it's not just the city's millage, it's the counties, the libraries, the schools that get put on to our property tax bill.

Granted, we know all of those things need funding in order for them to operate.

But the local option, sales tax study, like it, love it or hate it, is really just trying to come up with some ideas and ways that we can start to reduce the property millage rate, but still be able to generate revenue to provide city services.

When we have that conversation, I have some thoughts on things that we can do that may be slightly different from what was originally proposed just based on the how challenging and difficult it may be to actually move forward with a local option.

Because the at the end of the day, we were trying to figure out how do we increase tax revenue that we generate for the city without it being on the backs of the residents in the city of Detroit.

And it was really meant to mimic a tourist tax.

We understand with the study the challenges around getting to that.

Um but I think it's important for us to recognize how we are hindered by state law and really to advocate for some additional ways that we can generate revenue without the state slapping our hand and saying that we cannot do that because we know I've been hearing from residents because the snow is falling, and we know what the policy is for the city as it relates to when we start to clean the streets.

So how do we continue to grow our general fund to be able to provide additional resources?

And I will lastly say that the we have to be careful about conversations around the uncapping, because if we do something that upsets the system, I want to make sure the Detroiters, folks in the state of Michigan who have owned their properties for decades, don't get penalized because now we are looking at the uncapping.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

And I just have a few questions on this, and I will say I agree.

I think this when we talked about the five-month uh report, and then in October, as we talked about revenue sharing and the decrease in revenue share, and as we're talking about uh property taxes now and the ways that we can get revenue um uh as folks who are listening in the role that the state of Michigan plays in this is large, and uh we'll remind folks that you do have representatives on the state level.

So if you are um concerned about this as well, uh they need to hear from you.

Uh when you when you've done.

Okay.

Um so on this, I just have a few questions on the as you talked about the December uh withhold and and the profitability may be a reason for the corporate um um tax and as well as the big beautiful bill.

Will you be able to once we get through the months be able to really, or is it more up to what we hear from corporations on what actually is going on there?

Because I also think that helps us to inform our congressional delegation as well, how do how these bills are and laws are impacting city governments like Detroit.

So are are you asking, will we be able to know like how much did the one big beautiful bill cost us?

Yes, yes.

I don't think so because we'd have to know what different decisions corporations made actually made, um, given the change in federal tax law versus what they were going to do before.

So unfortunately, I I don't think that's um something we'll be able to do.

But you but we know that it is a factor and yes.

We we do know that it is a factor.

Um and you know, we do talk to our partners that do revenue estimating at the state level.

Now they have a different set of sit, you know, different situation, but in terms of um the economy and those kinds of changes, um we we do uh can make some estimated guesses, but I don't think on the one big beautiful bill, federal tax change.

Oh yeah, got it, thank you.

And then also I know you on when you talked about the cash that we have on hand and the um 460 million difference being mostly from ARPA.

Is that is are there any other factors there or is that mostly from the ARPA dollars?

Um I think let me just uh yeah, we had ARPA um about 214 million um compared to the same time last year.

Another big variance um was capital projects, and so that was primarily spending of bond proceeds um on capital projects.

Um the retiree protection fund about 53 million, and that's um because we started using that to to pay um towards retirement.

So those are the the biggest ones um general accounts sixty-four million.

I'd have to look at my notes to see.

Um that's primarily due to legacy pension payments.

Um and um that's that's primarily what's happening there.

Yeah, thank you.

And uh excuse me.

Just on another question that I had here.

We talked a little bit about um vacancies, and you you touched on it in that.

And I'll I'll just if it's not a question, but if there is anything, or I I guess the question I do have as we're continuing on with the transition into the new administration.

Um are there any uh projects or um plans that you all have to really amp up um reaching out to folks who want to hire and I know we talked about the discrepancy and and pay sometimes, but uh as you talked about in general services and and um other departments that are really forward facing and we hear those calls from folks.

Um uh just trying to make sure that we do get more folks in the door, but make uh but just want to see if there's any plans on that.

Um so I would say that the administration is very committed to um ensuring that the city is a competitive employer and that we are seeking the best talent that we can.

I know the administration is is definitely planning to double down on a lot of efforts in that regard with recruitment and and enhancements that make us a competitive workplace.

Um Director Starr, the of the HR department um is probably gonna be able to would be able to speak to that a lot more uh uh better than I can.

Um but I can say that you know, as far as you know, I've been made aware, like we, you know, this administration is very committed to making sure that we are a good workplace, a place that people want to come and be.

Um, and it's it's it is a great um it is a great philosophy to have um that to have someone to have a mayor is excited about local government and public service um is very exciting, and so I think we're all very hopeful.

For sure.

And if again, if there's anything that we can do to help with that, I know we have the skill trades task force as well.

Um that uh I'm sure we'll talk about that.

I mean, I just think about the contract that we had yesterday for tree trimming, right?

And that comes out to $2,000 per tree, right?

And and having that to actually pay folks folks in forestry, having them be city employees would make a big difference, and and the benefits of being a city employee there.

So just wanted to bring that up.

Um those are in the if uh for my question about no member Wardus had additional.

All right, so uh uh one thing I wanted to let you know, Mr.

Chairman.

I I do recall requesting an analysis and the fiscal impact of the big beautiful ugly bill.

I cannot say that I received that information, uh, frankly, but I did send it via memo.

Um I don't know, a few months ago.

Did did you receive it?

Yeah, I I I know that I that I did request it.

Uh and so it looks like Mr.

Mr.

Portland.

Thank you, Mr.

Chair.

Um Member Waters.

So um we have a team in the LPD.

That's trying to address that question.

There's a lot, this wings of information that has been you know reviewed from federal perspective, primarily from a federal perspective, but also state.

And so give us about another month.

Oh, but you did you did request that it's just taking us longer than unfortunately that we wanted because it's it's a it's a lot of research involved.

And but we are we'll do our best to get out in the month.

I understand, Mr.

Corley.

Thank you through the chairman.

Thank you.

Um the chair, may I also respond?

Go ahead, Mr.

Um, in determining the estimated amount needed for the corporate income tax reserve.

We did do uh an analysis on the impact of the one big beautiful bill.

Again, I don't know, you know, just based on the information that we had.

I don't think we'll be able to test that it was right, but we estimated that to be about 16 million dollars for fiscal year 26.

Okay.

All right, so um, I want us to not give up on the um entertain possibility of the entertainment um tax fees, you know, and tickets and so forth, and I know that it has to be authorized by Lansing.

That's another charge that we all have is council members to try to get such a thing uh passed there uh with them because we need it, you know.

Uh we need that revenue here um in this city, and so to you, Mr.

Chairman.

I want to ask um Mr.

Corley if um I know each year uh member calloway has offered up uh just uh the a little bit on the um on the meals one meal here, two meals there.

So what's what's the impact of that?

Uh uh are residents seeing um the difference is it is it helpful?

Is it is it I mean, what's the impact?

Both ways, residential and and city, and how much more can we do of that in the future without it causing too much of a fiscal impact uh here?

Mr.

Corley.

Yeah, just maybe two or three years ago the debt millage was about nine meals, and now it's down to four.

Um, and this current year's budget is based on the four meals, you know, in the on the debt serve for debt service.

So um, yes, that that is benefiting citizens, you know, with lower property taxes.

Did anybody say it benefited them?

Any citizen say it?

Do they did do can they really tell the difference?

I just want to know.

I think you can tell the difference.

It's not a huge, you know, let's be honest, it's not as well.

One meal is about a hundred and something a hundred uh some odd dollars.

I think the savings uh Mr.

Chair, you know, for the average citizen is about 150, 200 a year.

Yeah, okay.

One meal drop.

Okay.

All right.

Just want to understand.

So thank you so much, Mr.

Chairman.

I promise thank you, Mr.

Warder.

Um, thank you, member Waters.

Sorry about that.

Uh what I will uh also say as you talked about the impact of the big beautiful bill uh was 60 million.

I know there's also it's in the stages that it comes in, there might be some more negative impact.

So I know that's something to watch as we continue on and and thinking about budgeting throughout um the next couple of years.

So um thank you so much, uh Miss Greer, uh Mr.

Goalie, Mr.

Johnson, thank you so much.

And um there are no further questions.

I'll entertain a motion to receive and follow this report.

Motion without any objections, um, the report of the um months ending in November 30th, 2025 will be received and filed.

Thank you so much.

Thank you, Mr.

Chair, members of the committee.

With that, one second, I apologize.

With that, that will bring us to line item 6.2, which is a neighborhood enterprise zone certificate application for the rehabilitation of a vacant apartment located at 2681 Lakewood Avenue for 18 rental units in the lower far east side neighborhood enterprise zone area.

Uh, with that I'll entertain a motion to discuss line item 6.2.

So move.

With that, thank you.

We have um Mr.

Gulag on afternoon, Mr.

Chair, Chris Gulach, CPC staff.

Good afternoon.

All right, if you want to go ahead, I believe you have slides for 6.2.

Uh it's Mr.

Chair, and the developer may be in the uh Zoom audience.

His name is Yuri Y U R I and last name is Logvin.

Oh, here he is.

He's raising his hand, so uh thank you, Mr.

Chair.

Uh I can start.

Thank you.

Thank you, Mr.

Chair.

Can you see my slides okay?

Yes, we can.

Thank you.

And uh there's two NEZ certificates uh before the council today.

The first one is on Lakewood, it's on the lower east side.

This shows a map, it's on the south southwest corner of Charlotte Boy in Lakewood.

Zooming in closer, here's a it's at the corner.

It's an old vacant apartment building.

Here's looking uh southwesterly at the building.

You can see it's I believe it has three levels.

Uh the lower one is half below grade, I believe.

Uh uh students submitted a report and a resolution for your consideration.

This is in the lower far east side NEZ, which is a substantial NEZ uh created in this area for by council in 2003.

Uh the petitioner is Lakewood LLC, but that's represented by Yuri Logvin, who is on the screen now.

Um he's the managing member.

Uh he indicates he's completed several residential rehab projects in the greater Detroit area, including a similar multifamily redevelopment in on the city's east side.

Um that one is currently rented out to several veteran groups or veteran renters.

So providing background on this building, it was built in 1923.

It's over 100 years old.

It has three levels.

Uh city records show which Mr.

Logman might be able to update, but it was sold in in September 2025 for 180,000.

The assessed value is um about 242,000.

Which means the market value is double that, so about 500,000.

But the assessed value is 242,000.

The taxable value is 235,000.

So Mr.

Logvin is proposing the comprehensive rehab of the entire building with 18 unit rental units.

He proposes to spend about 30,000 per unit for a total investment of over about 540,000.

The structure is currently gutted and requires full restoration.

He's proposing new electrical, new plumbing, new HVAC, uh interior build-outs of all the units with kitchens and new bathrooms.

Mr.

Logan provided a table of all the different units, and they're shown in the report.

Uh so he's proposing to spend about 27,000 per unit.

All the units currently have one bedroom.

The rents he's proposing is $900 per month.

So regarding the rent levels, uh, Mr.

Logman indicates this is about 55 to 60% of the area median income.

So the target rents are as we stated, 900 per month for the one bedroom units.

Um he hopes to use about 50% of the units um to be leaves to low-income veterans in a partnership with the volunteers of America or similar organizations.

Uh, regarding parking, this is an older non-conformity building, so there's no parking lot next to it, but uh the petitioner is hoping to work with the land bank to acquire some adjacent land or nearby land for parking uh before the project is open, and and the parking would be included as part of the rent.

And there are some um there are some uh parcels to the northwest and the northeast that are owned by the land bank that he could attempt to purchase.

Regarding accessibility, it's an older building built in 1923, and the petitioner indicates uh they're unable to add an elevator or uh ramps to the front.

Um so they would uh there'd be no ADA designated units.

And this shows the building here.

You can see the front, it does have a doorway here off of uh Lakewood.

See the side of the building, there's no entrance ways, but there's a breezeway connecting the two different buildings.

And then I'll also on the on the west end of the building.

You can see there is a door back there as well.

So that concludes my overview on our report.

It isn't in any zone Z zone, so staff was recommending approval, and um a resolution's been submitted for your consideration.

Thank you, Mr.

Chair.

That concludes my overview.

I'm not sure if Mr.

Logman has any additional information.

Thank you.

Thank you, Mr.

Gulag, Mr.

No, everything was correct.

Say that one more time.

Yeah.

Everything which was stated was factually correct.

Oh, for the most part.

All right.

Well, move on to questions from if uh any of my fellow committee members have questions.

Start with Vice Chair Johnson.

Thank you, Mr.

Chair.

Thank you, Mr.

Gulag, for the presentation.

Um, you did answer most of my questions, but I am wondering if you can share um the boundaries for the NEZ zone that was created in 2003.

Uh the chair I don't have it right in front of you, but my my general recollection is that's most of the lower east side.

I I think it's generally uh Jefferson on the south, uh Alta on the east, Charlotte on the north, and it goes as far west as maybe uh let's see.

Maybe uh Lennox, but I can get back to you.

I think it's over 400 acres.

It's that lower east side, and the city created that, and and then they tried to sell a lot of that land as part of the lower east side project, which did not move forward.

Okay, all right, thank you.

I assume that was the project that created the NEZ, but just wanted to um have a better understanding of the boundaries.

Um I do also want to know if you know Mr.

Gulag, the reduction, how much of a reduction you you share the taxable value.

How much of a reduction would the owner receive as a result of the NEZ?

Uh through the chair, I haven't calculated the there wouldn't be a reduction per se uh the the the building has an assessed value at um 242,000.

So that would be frozen moving forward, and so say he pours in the extra 500,000 and the value of the building goes up, the assessed value will be frozen as part of the NEZ uh moving forward, so it won't see a spike in his property tax.

So in that case, hopefully he could uh make the project more affordable for him to develop and then not have high rents for the renters.

All right, thank you, Mr.

Logvin.

Um can you share with us?

I appreciate you offering um units, um, prioritizing veterans, um, and at the rate that has been provided to us, but when I calculate the numbers, the numbers don't even add up for you to be able to pay the taxes.

Um so can you share how you are able to afford to do the project and retain the low rents?

I'm not sure what you mean that you know that the amount of units and um the rent is not gonna cover the um the taxes.

I mean, everything is within the uh the limits to do the project.

So you will be able to afford to pay the taxes by because what I have here in front of me, um, it says an estimated rental price of 900 per month.

There are 18 units.

Yeah.

Feel free to correct me.

No, no, I'm following.

Yep.

Go ahead.

So there are 18 units all at 900 per month.

Do you anticipate any being more expensive than 900?

No, they they similar, so average that's gonna be so maybe they're gonna fluctuate a little, but uh my experience with the um veterans, you know, sometimes they have a lower water vouchers, and I have to kind of deal with that, but average is that's what expected.

So are you anticipating some form of a subsidy?

No, not really.

I mean, you know, the um I I do like to work with the that's um demographic um volunteers of America was good.

Okay, all right, thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Member Waters.

All right, so I'm sorry, my headphone died.

Um yeah, you know, in general, there is no um subsidy needed for this, so it's gonna be self-sufficient.

Thank you, Mr.

Logman.

Um, we're gonna move on to um member John uh Member Waters, please.

Oh okay, thank thank you, Mr.

Chairman.

So hmm, self-sufficient.

Okay, so that's that's not low income, then that's gonna be basically moderate income um tenants is what you're going after.

Um so what is plan B if the if the parking um with the um you don't get the land from from the uh the the land bank what happens?

Um so what is plan B if the if the parking um with the um if you don't get the land from from the uh the the land bank what happens you have a plan B and then maybe you can tell me if you know if you should have some parking lots, how they're gonna be maintained, Mr.

Logman.

Thank he's frozen.

Oh, something's wrong.

Mr.

Logman frozen was home.

Are you still there, Mr.

Logan?

The air from something I see.

Okay.

Can you hear us?

They can't hear us.

Okay.

So we will end it.

Yeah, let's go ahead and too.

We can get Mr.

Logman back.

Let's if we could um have a motion to table six point.

Um Mr.

Chair, you want to postpone it until the end of the meeting.

Yes, I don't parliamentarian.

Yes, uh, if we could have a motion to postpone this uh line item to the end of the meeting.

Some move without any objections this line will be postponed.

Um let's go on to the next line item.

This is a one second.

All right.

So this will bring us uh to line item six point three.

This is a um neighborhood enterprise zone certificate application for the rehabilitation of a residential building at 250 Elliott Street into six rental units in the crosswinds uh neighborhood enterprise zone area.

With that, I would entertain a motion to the um discuss line item 6.3.

No, sir.

Without any objections, we'll bring that up.

Mr.

Gulag, um, do you want to go ahead?

Chair Chris Gulag, CPC staff, and we're also joined by the property owner, Mr.

Craig Jenkins, who's who can be seen on the Zoom call as well.

Um I'll give a quick overview and then uh turn it over, Mr.

Jenkins, if you uh agree.

And uh this is in the brush park, it's on the south side of Elliott, just south of Mac between John R.

and Brush.

It's shown here as the red dot.

Zooming in closer, it's it's one of those big old uh residential structures in Brush Park that needs rehab work.

And here's the front um looking southward at the front of the facade.

And um this is in the crosswitten's Woodward Place NE Z established in 1996.

It covers most of Brush Park.

Um the petitioner is Craig Jenkins, who's on the screen.

Um Mr.

Jenkins' family has owned the property for about 30 years, and then Mr.

Jenkins, uh we spoke on the phone.

He indicated I believe he's in Georgia.

Uh but he he said he inherited the property about four years ago.

So his father used to own it.

Um city records show in the past in the 60s, I think it's 70s probably it was a rooming house, we believe.

Um but Mr.

Jenkins indicated in the past there was about 12 apartments.

And he said around 2005 there was a fire in the building.

It's been vacant since then.

So it's been vacant for about 20 years.

Uh city record shows the assessed value is about 495,000.

So that means the the true cash value, what it would sell for the market value is about is about um a million dollars.

But the taxable value is really low.

It's 75,000, and that's part because it's been in his family for so long.

So it's been capped, you know, based on inflation for the last uh 25 years.

Um if he ever goes to sell it, it would be uncapped, as you know.

Um but this NEZ would freeze his property um property taxes at that 75,000.

Um so it wouldn't skyrocket if he keeps the building and renovates it and uh and rents it out.

Um so Mr.

Jenkins indicates he already spent about 150,000 to clean up the building, gut it out because of the fire and stabilize the building.

And now he's proposing to renovate the building to make six residential rental apartments.

So there'd be he's proposing three units on the first floor and three units on the second floor, and each would have one bedroom and about uh one thousand one hundred square feet.

Uh so he's proposing to spend an additional in addition to 150,000, he was proposing to put about a million dollars into the property.

So it'd be about 191,000 per unit he's investing.

Uh he says the building he's he would like to charge market rates for that brush park area.

There'd be anywhere between 2500 and 3500 be still working out those details.

Um so regarding parking, uh Mr.

Jenkins indicates there is room for about four parking spaces at the rear of the building.

The alley is open there and and and paved.

So he he said he could put four spaces.

Uh there's also on street parking along Elliott, which as council knows there's a there's a residential parking permit uh program in Brush Park, I believe.

Um street, I believe, is the building owned by the Detroit um health department.

Um so there is some on street parking, it appears, but it's limited.

Uh regarding accessibility, this is this is an older building.

I assume it was built in the 1800s.

I couldn't find the exact date.

Uh, but you can see there's a door on the right here left here and a door on the right, and there's steps going up to that.

So and at the rear of the building, there's steps.

So it's because it's an older historic building.

Uh Mr.

Jenkins says he has no plans to make it uh ADA accessible.

So uh staff submitted report and resolution.

It's confirmed as being in that crosswinds, any of the staff was recommended approval.

But a resolution has been submitted for your consideration.

Thank you, Mr.

Chair.

Thank you, Mr.

Gulag.

Um Mr.

Jenkins, do you have anything to add?

Good afternoon.

Oh, you're muted, Mr.

Jenkins.

I'm sorry, I was on mute.

Uh no, Mr.

Gulak uh presented it uh exactly as I would have.

Um those are my plans, and um it's been a family a long time.

I just want to rehab it and um and possibly rent it out um as a rental unit down there.

Thank you.

Thank you.

All right, sorry.

Move us on to questions from the committee.

Uh Vice Chair Johnson.

Thank you, Mr.

Chair.

Um, good afternoon.

Thank you for the presentation.

Mr.

Jenkins, I'm wondering if you know the square footage of the building.

Uh I'm sorry, ma'am.

I don't know the exact square footage, but it's around uh five thousand square feet, I think.

Five to six thousand, but uh I haven't had that uh calculated.

So you essentially anticipate each unit will be about a thousand square feet?

Yes, ma'am.

And but your your proposed rents have a spree.

How do you account for the higher rent?

Um based on the market value.

Um, I had a realtor uh give me an assessment, and she stated that that would be uh appropriate appropriate rent for that area of around 3,500 a month.

All right.

Thank you, Mr.

Jenkins.

Yes, ma'am.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson member Waters.

We are on the um next in easy for on Elliott Street.

And I can come back to you.

Did I get 3500 a month?

Yes, ma'am.

Is it because he's on Elliott in Midtown?

I mean, I'm trying to understand.

You know, we don't have people that can afford these homes.

These places we don't.

Well, you know, I just would buy a market analysis.

I mean, if it wouldn't support that, then of course I would lower it.

That's why I gave the range of 25 to 3500.

Um, I know that that's a very popular area, and you know, she looked at rents in that area, and that's how I came up with those figures.

But of course, you know, whatever the market would support, I would uh meet that.

Any other questions or whatever?

Yeah, just uh Mr.

Jenkins.

I I have a few questions here.

Uh was what's your estimated total rehabilitation rehabilitation cost for the project?

Uh it would probably be about a million dollars is uh my estimate right now.

Okay.

And uh were and I understand the area and the and the marker rate.

Were there any considerations that gone into um any affordability considerations going into a sudden rent?

Um yeah, um, I talked to Mr.

Golak about that.

Uh you know, since it's gonna be limited to six units.

Um I was thinking one unit maybe at uh 80% of the average uh rental um income from the other units.

Um, but you know, I I haven't looked in depth at that yet, but yeah, I would definitely be willing to do that.

Okay.

And and I understand this is historic district and around the ADA accommodations.

Um consider even for the first floor.

Uh were there any other were there any considerations or even for a ramp there for folks to get into the uh front or back of the building?

Um, you know, my initial plans I hadn't, but I would definitely be willing to put probably a ramp in the back.

Um since it's a historic area, I didn't want to change the architecture at all in the front, but in the back, I would definitely consider that putting in a ramp.

Okay.

And another on the on the thought around reducing it to six units, um, seeing that it is that would make it around a thousand square feet.

Uh yes this units would still be one bedroom.

Has there been any thought around increasing the amount of bedrooms as you're increasing the square footage here?

Um, yeah, possibly.

I did have some architectural plans drawn up uh by a local firm, and um they recommended one bedroom based on a square footage to make it into time kind of a premium type property, you know, to have a kitchen, uh living area and a bedroom, but if it would accommodate that, yes, I would consider putting in another bedroom.

Okay.

And another thing, another question is the um do you have plans on uh property management as we um as you're in Georgia or where you have folks locally uh manage the property or will you handle that?

What are those plans?

No, yes, sir.

I would have uh local property management because I'm in the Atlanta area, just retired down here, but I would um I would definitely have a property management uh up there in Detroit.

All right.

Those are the end of my questions.

Um we'll go to member waters on the vice chair jump.

Hey, so if you if people don't pay this rent, what are you gonna do?

Because then we would have given you NEZ and and so forth.

So there's a very strong possibility that nobody is gonna rent these places.

Well um no, I understand what you're saying, ma'am.

The um I'm going basically on what uh realtor told me, a local realtor with the medical center being there, she seemed to think that there's um there's enough people that would be interested in living in that area that could afford that rent.

I guess there's a lot of uh professionals, doctors, and uh I don't I don't know everyone at the medical center that might be interested, but if if that rent wasn't supported, well I would uh definitely lower it.

Um but she seemed to think that that that rent would work in that in that area of uh Midtown.

Oh yeah, I it just you know, I it just seemed to me that you don't you don't even quite understand what the market rates are here and so forth, you're just kinda listening to what folks are telling you.

It just doesn't something just is not adding up with this project, not for me anyway.

Okay, um, I understand your concerns and what you're saying.

If you know I have to go by whatever the market prevailing market rates are, and that's what I would use, but um you know, I won't know until the project is complete, and I see what or rent for.

She seems to think that that's uh reasonable rent.

Thank you, uh Mr.

Duncan.

Thank you, Member.

And one thing I could add, ma'am, also if it if it didn't work, I would consider using it like as possibly an Airbnb or some other avenue.

Um to use utilize the the um apartments because it is real close to the um I know you to the uh stadiums downtown, the Red Wings, the Lions, and the downtown area, and I think for for big events that you know I'd be able to Airbnb it, and I might keep one or two units just for that also.

But um, I think there's various methods of uh you know utilizing the units even if I don't rent it out.

Thank you, Mr.

Jenkins, Vice Chair Johnson for yes, sir.

Thank you, Mr.

Chair.

Um Mr.

Jenkins, I am going to encourage you to maybe um I'm not sure if you have family members that live here in the city of Detroit to perhaps maybe get a little closer to them to understand what's happening in the city of Detroit.

Um I will say that I would love to understand the capital stack, how you plan to pull all of this together and provide the units in the city when I run the numbers, it actually is on your side to support the NEZ, but I want to be sure that you understand what's happening in the city of Detroit in that particular area.

Um, and would really like to get an understanding of how the building was used prior to you taking possession of it, recognizing that it was still in your family's possession, um and why you are planning to change how the building was used previously.

So if you can maybe walk us through since you're your father, I understand owned the building prior to you taking possession of it.

Do you have a sense of how it was maintained, how it was financed, what the rent was then?

Yes, ma'am, I sure do.

I um well, I grew up in Detroit over on Santa Barbara near Livinois and Seven Mile, and we still have that home.

My um parents have since passed, and I was in the Air Force and settled here in Atlanta.

But I was real familiar with uh the operation, uh the rents, you know, there were 12 units.

My father was charging approximately two to three hundred a month, and this is back in the 70s and uh 80s, and um it was um, you know, basically I wouldn't say low-income family because I guess I don't know if that was medium rent back then, but yeah, each unit was always full of people.

It was kind of like a community, everybody knew each other.

We had a problem with one tenant on the top floor using a space heater that caused the fire that pretty much gutted the place.

And so my brother, um, he had some friends refurbish it, but they didn't do a very well good job.

And this is back in um the late 90s, and uh my brother's since passed, so I had um a uh company go in and um secure the place, you know, the uh strengthen walls and the foundation and stuff, and they gutted out all the uh waste and stuff, and now it's pretty much like an empty building.

It does need some work on the roof that I'm gonna complete.

But um that area since that time is the value of properties is you know gone up tremendously from what I remember um when my father first purchased it, and that's why um that's how I kind of came up with the rents and and kind of an idea for what I wanted to do with it.

Um, you know, I wanted to have an investment in Detroit because I I really do, you know, love and consider myself still Detroiter, even though I'm living here in Atlanta, and I just you know want to see it, you know, reach its full potential, the building, and you know, and have it rented out and um, you know, have it be an addition to Detroit, you know, not an eyesore or a vacant building, but I'd like to see it um, you know, provide a home for people, even though they may be uh upper income people.

I I think that um it would be a nice addition to that area.

Thank you for that um information.

Are you planning to finance the rehabilitation work?

Uh yes, I would that finance, you know, I put up some of my own money, some retirement money, and then uh finance the rest of the local bank.

Okay, thank you.

Um I I would encourage you to maybe break down the numbers.

Um although maybe there are some people that can't afford $2,500 a month.

I will just say that income for Detroiters has been stagnant for decades.

Um so our incomes don't go up as much as one might think they do, just because property value and rental rates have skyrocketed over the more recent years.

So just be mindful of that.

So it to me, it would appear that you're targeting a new Detroiter who has a different type of job that maybe pays them half a million dollars a year.

Um, but I think it's a lot of money.

However, when I look at how much you would be paying in taxes, and to finance the million dollars, it makes sense.

Yes, I would like to see though a breakdown in the numbers from you to help justify this NEZ and for us to support it, recognizing the conditions that we face with Detroiters and housing, the cost of housing, and what our incomes are.

Yes, sir.

All right, thank you.

Thank you, Mr.

Chair.

Anything further?

All right, thank you.

Thank you, Vice Chair Johnson.

So with that further breakdown, I is that uh do we have a motion on the floor?

If there is uh if there are no additional questions, um Mr.

Chair, I would like to make a motion to bring this item back in two weeks to give Mr.

Jenkins the opportunity to provide us with that breakdown so we can have more information to make a a better decision on how to move forward.

There's a motion to bring this line item back in two weeks uh with further information on the uh breakdown of the numbers and this NEZ certificate with no objections.

Um we'll bring us back in two weeks.

Thank you.

Thank you.

Did we get Mr.

Logan back?

Mr.

Chair, yes, we did.

Okay.

Um so let's go ahead and I know we postponed to the in the minute, so let's go ahead and bring up the uh the next line item around uh DDA, and then we'll go back to this uh six point.

So we'll go back to we'll go back to 6.2 at the end, but let's go to 6.4.

Um a fiscal year ending 2025 and your reports for the city of Detroit Downtown Development Authority and the City of Detroit 8 Mile What We're Corridor Improvement Authority.

Uh, with that, I'll entertain a motion to discuss line item 6.4.

Some move.

All right.

And from for this line item, we have uh Jennifer Conelos.

If I forgive me if I pronounced it wrong, the vice president of Board Administration and Government Affairs for the Detroit Economic Growth Corporation.

Good afternoon.

Uh good afternoon, Chairman Campbell and honorable community members uh Johnson and Waters.

My name is Jennifer Canalos, close.

Um yeah, I'm vice president of Detroit Economic Growth Corporation of Board Administration, I should say.

Um so that's our public authorities or our downtown development authority or Brownfield Authority or Corridor Improvement Authority.

And what you have um what we have before you today are the fiscal year and um 2025 annual reports for tax revenue received for tax year 2024.

So you know we receive the tax revenues a year later um for the downtown Detroit Detroit Downtown Development Authority, the eight mile Woodward Corridor Improvement Authority and these reports are for receipt and file.

Public Act 57 of 2018 um recodified all the TIFF enabling statutes save for the Brownfield Act, um, including DDA and corridor improvement authorities under one statute.

A requirement of public activity seven is at the TIFF authorities capturing revenue, submit the annual reports to the Michigan Department of Treasury, along with copies sent to the governments of taxing authorities.

Um at this point, um, I can answer questions about the reports.

I also have a few slides.

I'm you know, looking at the time and am certainly happy to proceed with um what this honorable committee would like.

Thank you.

Thank you so much.

Yes, we we can go ahead with the slides and okay, of course.

May I share my screen okay?

Okay.

Are you able to see my screen, Mr.

Chair?

Yes, I am.

Thank you.

Okay.

All right.

So I first would like to start off with what tax remit financing is.

We hear TIFF a lot.

I want to make sure that uh those watching uh this uh committee meeting as well as um those in the audience understand what TIF is.

The tax agreement financing at its base is basic works like this.

Um when properties put into uh tax remit financing plan, uh the value of all the property within that tax remit financing plan.

When properties put into a tax permit financing plan, the value of all the property within that tax remit financing plan, the that valuation is called base value.

You'll also hear it called initial taxable value.

Everything above that taxable value, the levies applied to it, most of them, and it really depends on the TIFF statute, can be captured and used for certain economic development initiatives.

Again, depending on the statute, but it's a whole host of costs.

You can you can there's environmental remediation, infrastructure improvement, business and development retention programs, um historic renovations, construction of new buildings, was very broad and it really gets more detailed depending on on the statute.

And it's also allowed to be used to finance that through the issuance of bonds.

Okay, let me try to do that earlier and it wasn't cooperating.

How's that?

Mr.

Chair.

Better, yep.

It's a little bit better.

Yeah.

Okay.

I'm I'm apologizing.

It's I the reports the way that they are, I have to do them on a portrait.

That makes it a little difficult with the um with the PowerPoint.

Um any questions on tax permit financing, Mr.

Chair?

Or shall I proceed?

You may proceed.

Thank you.

Okay.

Um, so what you have before you is the map of the downtown development authority.

And so this is all around the blue is the the boundaries of the DDA.

However, the development and tax improvement financing plan.

Um, you see this yellow hashed mark, it goes all the way up here and around, and then down to this side.

All the property in there is subject to tax agreement financing capture with some with some rules and um, you know, if there are other brownfield projects in the DDA.

Mr.

Chair.

Um, Johnson.

Um, if I if I can maybe help maybe guide and direct where you can expand your screen in the lower right-hand corner, you'll see where you can do a presentation, but you also see this bar where you can scroll.

You should be able to make it larger so that it's a bit more legible.

There you go.

How's that?

Does that work uh through the chair?

Yes.

Council member just now it's back to where it and can you still see it now because I went to the full screen.

Can you still see it?

It goes back to that.

So I would say I would go back to that previous screen and um and just make it zoomed in and just.

Okay, yes, I know.

Thank you, Mr.

Chair.

Thank you.

So this is that the map of the DDA boundary.

And so this is the full DDA outlined in blue.

And then the properties that are subject to tax agreement finance and capture are denoted by this this yellow hash mark, which actually goes up here and around and then down around through here.

So all the property within here is subject to tax agreement um capture, you know, with some exceptions, projects that are brown fields.

Um and have an agreement are able to capture within the DDA.

And so moving along, this is the report for the DDA.

Scroll up a bit.

There's three major parts to it.

Um, are you able to see the report on your screen?

The numbers are a bit small.

The words are a bit small for us on the screen.

Um, I will make sure.

And for the folks who are also viewing and for the public, this uh is linked.

The report is linked on the agenda.

Okay, great.

Thank you.

So shall I proceed, Mr.

Chair?

Yes, you can proceed.

Okay, great.

Thank you.

So the top part of the report um provides the details regarding the plan.

And then you'll see a section down here.

So tax increment revenue received, it is broken out by millage.

You scroll over here, you can see the millage is captured, and then the revenue that was captured for tax year 2024 by millage.

And then further down, um, more interest regarding um or more information regarding bond debt.

And then the bottom portion of the report is the breakout by property category of the tax agreement financing capture.

I do want to point out that this form is a very it's a static form and doesn't allow for flexibility or adjustments that might be made within the DDA.

So while the amount down here says 63877, um, we actually received the amount up here of 56,985710.

And then again, that is due to things such as delinquencies.

Um, as I mentioned earlier, there are brownfield plans that are located in the DDA and they may be capturing that revenue.

So even though that amount down at the bottom of the report says it should be 63 is actually 56 million that was captured.

Are there any questions or would you like me to proceed for 8 Mile Woodward Corridor Improvement Authority, Mr.

Chair?

How would you would you like to stop and review DDA first?

Let's go ahead and if you want to go through eight mile and then we'll have questions for both.

Certainly, Mr.

Chair, thank you.

And so I wanted to quickly show the map of 8 Mile Woodward Corridor Improvement Authority.

And so this is 8 Mile and Woodward.

This is the gateway shops, the Meyer, there's a K and Gashion Store, a Marshalls.

I know there's a Starbucks, a PETCO, I believe.

So it's a it's a it's a it's a shopping center.

And so the tax agreement financing plan for the My Woodward Corridor Improvement Authority is specifically for this project.

So moving along, the eight mile recorder improvement.

So here is this report, and I wanted to start at the top with the information, Mr.

Chair.

And so this is the information and tax improvement financing plan when it was approved.

I did want to point out this area year school tax capture is scheduled to expire until full reimbursement.

And that is how the TIFF plan is written.

But I I did some calculations this morning.

And I it is my thinking, and of course, this is dependent on future taxable values, that we're looking at 11 to 13 years until full reimbursement for this project.

And so this is a part of the list the TIFF received for tax year 2024.

Again, broken out by millages.

The reimbursement to the developers, the expenditure.

And then again, down below, this is the breakout of the property categories against the millages to come up with the amount.

Again, this amount doesn't perfectly match what is what we actually received, but there are like I said, there are adjustments that are made that this form just doesn't factor for.

So with that, I'm happy to answer any questions.

Thank you.

Thank you.

Thank you, Mr.

Chair.

Well, I'm trying to pull up all of the questions that I have.

Um, I do have one question that just came to mind, and I'm not sure if you are able to answer in detail or give at least some idea of how the captured taxes have been utilized.

Um through the chair, uh council member um Johnson, are you talking with respect to the DDA or the eight mile woodward recorder?

The DDA?

Yes, certainly.

Let me make this a little larger so that we can okay.

Can everyone see the breakout here of the expenditures?

Are you able to see that on your screen, Mr.

Chair?

Yes.

Okay.

Thank you.

And so within the the expenditures, you see the line items.

The line items are broke broken out by an approved tax increment financing and development plan.

Um, so right off the top, um, you have the bond debt um service um principal and then the interest and bond issue cost and trustee fees.

The bonds were refinanced in at the end of June of 2024.

Um, so for campus Marshus Lower Woodward, um, there was there were funds spent on um so the United States Artist Building or 150 Bagley um funding for that project.

And um another um project, I guess we call it more infrastructure improvement, um, was preparation for the NFL draft in Detroit.

The convention facilities and public improvements, um, that is for holiday lighting and enhanced lighting for safety.

Uh, we uh have an agreement with the downtown Detroit partnership, and so we provide 200,000 annually to them for that.

Um, the land assemblage program, um, funding for the uh 1332 Broadway project uh right there in Paradise Valley that is currently under construction.

And I know that it has deep affordability, and I was going to look that up and did not uh uh slip my mind, but I know that I believe it has 60 AMI of a few apartments, and that I can certainly get that information to you.

Um so the housing office and retail um is more funding um for uh 311 East Grand River Um and as well as um other initiatives for economic development um such as parking subsidies for companies to move downtown.

Uh the M1 rail is 900,000 for the Q line special areas maintenance.

Um again, some NFL draft um funds expended there.

Um another uh initiative that uh was used as a special areas maintenance is um the DDP or downtown trade partnership received um funds from the uh state of Michigan.

They're called RAP or revitalization and placemaking.

And so the DDA provided funds so that work could be done on Capitol Park, Campus Marshall's Park.

Um there's ongoing work at um Grand Circus Park as well as uh parks in Paradise Valley, and the stadium repair funds are funds that go, you know, that that are that are put in annually for any repairs that the stadiums need.

Uh the bond revenue stabilization fund is extra funds that we have above what we paid, and so it stays there, and we can't apply any more of them than 10 million a year to the the repayment of the bonds.

Um, but after 10 years, we'll be able to open this back up and and restructure it so perhaps we could add more funds to the principal.

And then the transfers to the general fund, the 750,000 is is funds to the DDA for operating.

All right, thank thank you for that.

So you indicated that um there was bond debt that was refinanced in 2024.

Was that to benefit from lower interest rates?

Yes, and and so there was an early retirement retiring of remaining bonds, other than the little CZU's bonds.

Um we restructure the remaining 198 million um to allow for and to allow for additional payments, 10 million annually um without penalty.

Um, and so the DDA implemented these cost saving measures, you know, as a way to um you know save on interest and also be able to pay down the debt.

Uh the maturity date for the bonds is is 2048.

Um, if revenues stay where they are, though, it could be 2042 or even earlier, but this is really contingent on future taxable values.

Thank you for that.

So I'm my mind is taking me back to PED last year, and I thought the um bond debt had been paid down so that um we would have them paid off by 2038.

Is that not correct?

It's it's not, and I'm wondering, I'm Glenn Long, CFO and the executive vice president of DEGC, I believe is watching and might be hopping on to join me because I feel like he's in a better position to answer those questions.

Anyone see Glenn on, Mr.

Chair?

Do we see Mr.

Long?

Glenn Long.

Glenn Long is in and I've promoted him.

Thank you.

Thank you.

Uh Mr.

Long, if you can state your million for the record.

Certainly.

Gwen Long, uh, Chief Financial Officer of Detroit Economic Growth Corporation.

Um, the bonds were refinanced in 2024.

Um, you're right that we we anticipate that they'll be paid off probably in 2038.

The um the official maturity date is 48.

We have a we we restructured it so that we could pay up to 100 million dollars off, 10 million dollars a year each year for the next 10 years.

We successfully did that last year.

Um, and we anticipate that we'll be able to do it for the for the next nine years as well.

That would bring the maturity date down to 2042.

However, with the revenues at the current level that they are and our ability to put money into the revenue stabilization fund, we anticipate that the true payoff date will be 38.

So we will have uh we will have pushed it forward um for 11 years.

All right, thank you.

All right, thank you, Mr.

Chair.

Thank you, Vice Chair Church.

Member Waters.

Uh thank you.

Thank you, Mr.

Chairman.

So going back to the bonds.

Uh so who approved when was that approved for the refinancing of the bond?

Uh may miss go ahead, John.

Go ahead.

Uh if it may, uh Mr.

Chair, the bonds were approved, the refinance was approved by the downtown development authority board.

When to May of 2024, when is that correct?

I don't know the month, but it would have been 2024.

Yeah, it was 2024.

Yeah, it's 2024.

All right.

So you say that you have a long-term plan for servicing the debt that you have.

Um, how does that impact um our ability to fund new infrastructure projects?

Well, if I may, Mr.

Chair.

Uh currently the DDA uh funds, uh, the DDA funds are encumbered the next four years.

Um, but but projects may fall off, line items might fall off.

So if there is specific um infrastructure that you're thinking of, you know, certainly feel free to reach out to us and we can begin those discussions.

Okay.

Um it comes to the arena owners, you know, paying for their state union repairs and so forth.

What what are we getting in return?

Through the chair.

I'm not sure I fully understand the question, but um there's a there's a stadium repair fund that both the DDA and the um franchise owners pay into uh for both Cumerica Park and Little Caesars Arena, and repairs are made out of that out of that fund.

Um so both are contributing to it.

That's the way the uh the deal was established.

So I mean it's not uh a give and take type thing.

Is that a deal that we can we can change and so that we can do something else with those dollars ourselves?

No, that I mean because we don't get we don't we don't get any money on ticket sales and that kind of thing.

So I I just don't don't get why we're paying for for the repayers while we're even contributing to that.

We don't own it.

If I may if I may through the chair, this is this isn't DDA to plan, it would take and if I'm not mistaken, it would take a uh DDA to plan amendment and and um so currently that's that's that's how those funds are being spent well and and it's in the it's in the document, it's in the the concession management agreement.

We we can't that that's not anything we could renegotiate with the TIFF plan amendment.

That's this is this is a contribution that we have to make each year and that they make and they match, and um you know the the DEA is the owner of the uh of the little Caesars Arena, and so we have an interest in keeping it.

Okay, uh on the MRI uh M1 rail, um the report indicates an expenditure of about 900,000 for the M1 rail.

So is this a recurring uh annual um obligation?

And so what is that yeah, so if I may I'm sorry, I'm sorry, Councilmember Waters.

So I just want to understand the the long uh long-term financial commitment to the Q line operations that that we have.

Um if it may through the chair.

So this is an annual commitment.

I do not have that information on how long the annual commitment is.

I can certainly get that information to you though through the through the chair through the chairs through 2039.

Okay, 2039.

All right, let's take a look at the um the school tax capture with the DDA school uh tax capture scheduled through what 2051.

Can we provide a detailed briefing on how these capture funds are directly benefiting the educational infrastructure or local workforce development within these districts?

Well, you know, you know people are screaming how about that the school uh uh tax captures all the time.

So I just kind of want to know uh a bit more information about it.

Um, if it may through the chair, um as as we were speaking earlier, uh if there if you know bonds bonds that is um paid down earlier, you know, it may not be till 2051.

Um it is also uh we know that the state of Michigan uh makes these schools full for the for the school operating uh for the school operating mill.

So the funds that the that are being captured by the DDA will be you know the state will replenish those funds.

So the the state makes the cities full when it comes to tax event financing capture of school capture.

So in other words, and I'm I want to clarify this for for the community as well.

So in other words, these captured funds uh do not directly benefit the educational infrastructure or our local workforce development through the chair.

I don't know that there's a specific program for that and uh any funds for that um trying to if I may to the chair, I'm trying to even think of any schools that are located within the DDA.

Um so not not to my knowledge, but I can certainly follow up and and see if there are any funds for that.

So since that map is pretty difficult to read, and I don't know how many people are watching online, could you just verbally state the boundaries of the DDA?

It is roughly on the same Mr.

Chair.

So, you know, the southern boundary, the river down by the river, it goes uh the DDA boundary itself um jogs a little west of the lodge or the tax remit financing plan is is everything um from the uh uh from I think this is the river, river terrace apartments are the the condominiums there up through I believe it is first streets, and then the area around the extended area around Little City's arena comes down through Woodward and then jogs across coming down through Graschett, and then down to where you know down jogs down south for a few streets.

I don't exactly have those names right in front of me, and then a little off to the east um around uh where the Renaissance Center is.

Okay.

Thank you, Mr.

Chairman.

Thank you, Mm-Well Waters.

Um to expand on that court the question on the boundaries and the schools with the um I know Lil Caesar's is the expanded area.

Does that include Cast?

Uh if I may through the chair, CasTech is located within that area.

Okay.

And and I can't see, I know you might not have the streets offhand, but how far north is that um north of the Little Caesars Arena?

I may, Mr.

Chair, I think.

I Mr.

Chair, I want to say it's Charlotte, but I cannot confirm.

Okay.

I am looking at this right up here.

I believe it's Charlotte.

Um I can certainly uh check and get that information to you.

Okay.

I think that's right south of that.

If I may, Mr.

Chair, yeah, it's confirmed it is Charlotte.

Okay.

So it might be right south of DSA as well.

Uh so I have a few questions on both of these items for the DDA and eight mile.

Um looking at for the DDA.

We covered the touch capture.

So we in your words just to you feel confident about the at least the oh the maturity of the 2048 and um paying down the debt.

Right.

Okay.

And I know you mention the encumbered funds and went through the is there anything outside of what you talked about that is within the 131 million uh with the encumber funds that you didn't talk about.

Or is that all captured there?

Uh Mr.

Chair, are you referring to the encumbered fund balance down in below?

Yes.

Uh Mr.

Chair, if uh if I may um ask uh Mr.

Long to address this question So the um the amounts are scheduled out that and they were um they are scheduled for for various different projects and they are all that that amount is all encumbered now that may not all be spent, and if not, then it gets programmed back into the plan.

But as of now, that's that's all um encumbered for for DDA projects as set out within the TIFF plan.

Okay.

And you mentioned the so the consession concession management plan of the the stadium repair fund is just a one-to-one match between um the DDA and the uh team owners or the franchise owners.

That's correct.

There is a uh there are little unique things like adjustments for inflation and thing like things like that, but it's basically a one and one to one match.

Okay.

And then thinking about if we go on to the eight mile.

If you what's the name of the if you have it on hand that the developer does receive in the reimbursement?

Yeah, uh excuse me, Mr.

Chair, I didn't I didn't hear that question for for the eight mile um uh what is the name of the developer getting the reimbursement if you have the on it?

Uh oh yes, Mr.

Chair, I do.

Um it's um uh DP Detroit Gateway Park of Michigan that's your tenant LLC.

Okay.

All right.

And if I know uh you may have mentioned this, and sorry if I mentioned uh missed it uh for the for reimbursement.

Can you just restate when we expect um that to be reached on the eight mile?

Certainly, Mr.

Chair, if I may.

So the uh developer was approved for 12.1 million dollars in tax remote revenue reimbursement.

We are halfway there, and this morning I did some calculations, and you know, this is really contingent on future catcher capturable value and captures.

Um, but on um I projected somewhere in the neighborhood between 11 and 13 years for full reimbursement.

All right, got it.

Thank you.

I just wanted to talk about the M1 rail for just a second.

So if we are on TAP for 900k as an annual into 2039, a couple of questions there.

Is this what goes into is this covers their free fare on M1 rail?

Do we can do we think is that gonna continue um with this uh allocation to it?

Or how what goes into that?

Uh through the chair, I don't know specifically what uh you know I know that we fund it.

I don't have the details on exactly what those funds go to.

Um certainly I can look that up and get that to you though.

Through the chair, yeah.

Um we wouldn't give more information, but it's uh it's a subsidy and it allows them uh to do maintenance and repairs on it and on the portion that's within the sit the DDA district, because of course that's where our money has to be spent, and um I you know, as would they'll have to speak to if they plan to keep fares uh you know at a free level, I believe that they do, but I'm I can't we can't speak for them.

Oh yeah, thank you.

I also bring that up as I know public transportation continues to be a conversation and a need in the city.

So as we are um contributing to that in the subsidy into 2039, whether it's around free fares or whether it's around expanding, um, where and I know within the DDA the funding here has to stay within DDA, but just thinking about that and the options that we have for folks when it comes to public transportation and and the belief or the thought or the initial plans for the M1 rail to go further than it did.

So I just want to uh make that note and we can we can follow up with the folks over there to get um better picture of their overall budget.

Um but with that I don't have any further questions, and I'll just go back uh Vice Chair Johnson.

Thank you, Mr.

Chair.

Um so I was just going to ask a question.

Um Mr.

Long, you technically have already answered the question.

You just answered it.

Um I was going to ask what are the parameters around the DDA's ability to provide funding support for programs or buildings outside of your boundaries.

Zero.

We the the money from the DDA has to be spent in the DDA, the money from the the TIFF capture has to be spent within the TIFF district.

And so Mr.

Chair, just um in talking about the M1 rail, also um just kind of spoke to the challenges or concerns that residents articulate relative to DDA.

Would you be able to provide some level of support for DDA considering there are coaches that run through your boundaries?

I couldn't opine to that.

I don't know specifically.

I I would have my doubts about it, but we would have to see some kind of a written proposal and we would consider it.

And if it passed the legalities, we could have the board um consider it.

Okay, perhaps maybe and the Rosa Parks Transit Center is also within the DDA's boundaries as well.

So we'll we can have some conversation about that offline um just to see if there are any creative ways for us to do things that provide greater support um to residents.

Um the only other question that I had was relative to the other um TIFF Woodward and Eight Mile.

Can you speak to how that ended up within the DDAs?

Um that's not within the DDA, so you all are just providing a report on that particular TIFF.

What's the connection?

If I may to the chair, um the the two TIFF authorities that we have that fall under public act 57 of 2018 are the DDA and the Eight Malwood Recorder Improvement Authority.

So I submit the reports to this honorable body under one under one letter.

Um it used to be when we had the local development finance authority, it used to be three reports.

Now we are no longer capturing um for that, so now it is down to two.

And so I'm sorry, go ahead.

So it's I and through the chair, so it's not it's not meant to be a part of the DDA, it's just was submitted along with the DDA.

Thank you.

So do you act as an administrator for that other TIFF?

Uh if I through the chair, yes.

Okay.

All right, thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair.

Uh member Wars, did you have anything additional?

No.

That's agreed.

All right.

What um thank you so much.

Uh and with that, we I would entertain a motion to receive and file this uh report relative to the fiscal year and then 2025 annual reports for the city of Detroit's downtown development authority and the city of Detroit email what we're corridor improvement authority.

Motion to receive and file.

Uh without any objections, this would be received and file.

Thank you so much.

Thank you.

Thank you.

With that, we will go back up to line item 6.2.

A neighborhood enterprise zone certificate related to 2681 Lakewood.

Um Mr.

Logman, are you there?

Thank you, Mr.

Logman, for your patience.

I know technology was not in our favor earlier on, um, but I did want to bring this up because I uh folks had additional questions when we were in the middle, I believe.

Vice Chair Johnson, uh, but I think um we can go to Vice Chair Johnson now.

Thank you, Mr.

Chair.

Um, essentially, I believe I was asking about the finances for the project.

Um, just based on just a quick calculation.

Um, and I believe that's when Mr.

Logvin um was frozen on our end.

So I'm I'm just wanting to ensure that the estimated rental rates that are being offered will be sustained.

Um and rental rates won't increase drastically because now we calculated and see that it is not financially feasible to do so.

Um I mean it's it's definitely financial feasible project.

Um so basically the total rent is gonna be close to 200 per year, and then if you subtract the expenses, um we're looking at uh 120 left for the for the depth on the property.

So um there is no issues in that regards.

That includes uh the property taxes.

Uh yes, that is.

Okay.

I'm calculating I'm calculating the expenses based on the current uh tax bill.

Okay.

All right, and we have requested from the assessor's office uh the taxes for this particular property.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson member waters.

Um did you say that the the rent would increase by 200 every year?

Did you say that?

No.

No, I I no that's not the plan.

Not at all.

Okay.

Okay.

All right.

I just wanted to clarify that.

So but I I was asking you before you froze.

Um what is the plan for the parking lot if you can't get the the properties from the land bank?

I mean, everything around me is land bank, so there is a lot um to choose from.

I'm trying targeting one behind, uh, so it's gonna be a close walk.

Uh but um that is going through the approval process at the moment.

Um, but there is a couple more across the streets um on each end, and um I can see that there is a couple also private proper you know private lots, which I can uh go for, but I don't see a reason why that should be an issue with the lending back.

And and how are you gonna maintain the parking lots?

Uh what do you mean?

How will they be maintained?

Is it is it gonna be you or no?

I mean it's it's gonna be the company like um who have you annual maintenance plus the yeah, plus um, you know, the company to come over and do the snow cleanup and that kind of stuff, you know, the uh yard maintenance all together, yes.

I just want to make sure because you know I was also I I'll tell you this.

I was concerned about the fact that you said there would be nothing there for ADA.

I mean, you know, like that's that's uh restoring type project.

So ADA was not part of the original building, so I'm I'm keeping the way it was.

So even if they visit um I mean I'm maintaining what what the building was originally, so I'm just um uh you know my plan is to repair the building.

Thank you, Mr.

Chairman.

Thank you, uh member waters.

I will Vice Chair Johnson, go ahead.

Thank you, Mr.

Chair.

Just um an additional question.

Mr.

Logan, how many uh multi-unit complexes do you currently own in the city of Detroit?

One.

And that's on the west side.

No, it's uh just a few blocks away.

Can you share the address?

Uh 1396 Cadillac.

Okay.

Cadillac.

Yes.

And how long have you owned that building and this one?

Uh this is new, and that one is um since 2019.

2019.

All right, thank you.

Sure.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Um Mr.

Logvin, you mentioned for the 1396 Calic that this is in a similar way that you um provide housing to veterans there.

Uh yes, it's 50-50, it's 50% uh market and 50% uh section eight veterans.

Okay.

And have you in how you've uh I would assume that you're applying the type of same type of process with this property.

Have you seen a need to increase rents there based on your um budget and finance supply?

Uh no, I mean it's been rented for nearly three years, and we I'm consider you know, I'm keeping the rent steady, so I'm just um aligning with uh more or less market rates, but again, as I mentioned, uh when you deal with the section eight, it's a little um you know a little bit of art that you know the the rents might be higher, maybe lower, and um then you can kind of balance it out, but that's that's kind of uh also an average number on that property.

And I want to echo the questions around ADA from uh member waters, um especially since you are um elevate this for uh uh veterans who may also have I mean every community has folks with disabilities, but one of particularly is we if we're thinking about targeting this for veterans, um even on the first floor, there's been no thought around even a ramp at the back or front door just for folks to be able to get into the building.

If needed, that's not a big deal to add it, to be honest with you, but so far um the the idea is just to keep as it was.

But it's it's definitely not an issue to throw in, not at all.

I would definitely highly recommend uh that um especially in the conversation with the volunteers of America and and on that point.

Um you have do you have an agreement with VOA or any type of um like partnership and writing on these or no?

We work more like uh case-to-case basis.

Okay.

And uh I think that is the end of my questions here.

was it's it's definitely not an issue to throw in not at all I would definitely highly recommend uh that um especially in the conversation with the volunteers of america and and on that point um you have do you have an agreement with voa yeah or any type of um like partnership and writing on these or no we work more like uh case to case basis okay and uh i think that is the end of my questions here um and i'll entertain a motion on the uh and on this project if folks have all right thank you mr chair um move to send line item six point two formal with recommendation to approve any objections to move this to send us to formal recommendation to approve objection there's an objection uh we will move to uh roll call vote on six point two oh we don't have to do that oh you don't oh okay uh passes it oh okay all right okay um six point two will be sent to formal with a recommendation to approve all right thank you thank you thank you mr logman thank you mr gulog all right that will move us down to I believe the end of the agenda for member reports we will start with vice chair johnson thank you mr chair just want to remind district four residents that we are hosting our first monthly community meeting on Monday January 26th at 530 p.m at hope community church located at 14456 east jefferson that is the Jefferson and Chalmers corridor area um it is a hybrid meeting so if you're not able to join us in person please reach out to the office to obtain the link to join us virtually we will have the Department of Public Works share information about complete streets and to let the community know everything that they are doing to ensure that our streets are safe for everyone whether you are walking biking driving a vehicle in a wheelchair or what have you so please join us for that conversation additionally we have invited the assessor's office to join us and talk about principal residence exemptions there have been some information on social media where individuals talked about losing their principal residence exemption and as a result their property taxes skyrocketing um and so we would like for the assessor's office to address that issue if it has happened to residents um and how we rectify that if it has happened again that is Monday January 26th at 530 p.m at Hope Community Church located at 14456 East Jefferson we hope to see you there.

Thank you Mr Chair thank you vice chair uh member waters uh thank you mr chairman and I'm glad you guys are looking at that to the uh through you miss Mr.

Chairman the PRE you know a lot of people don't even know that they should have a PRE so that's another educational piece that we all have to do um for all of our homeowners so I'm glad that my colleague from district four uh is addressing that and every opportunity that that we have um just as we are doing um the uh default protection on January 31st that is a a joint um town hall between um my colleague from district two Andrew Whitfield Callaway and that is going to be January 31st at the Northwest activity center and it is going to be from 10 a.m until noon that is January 31st from 10 a.m to noon at the Northwest activity center and it's so very important uh because listen people are just uh just stealing your homes we've had a number of people and and uh and I know that both in in in district four and seven there have been some thefts uh when it comes to this deed fraud and a lot of people don't know is that when you when you take it to the register of deeds they have to file it is it's not like they can do anything to protect you so those are some things that we're gonna have to work through uh both here uh and in Lansing as a matter of fact so uh there there's work to be done and I'll be working with my my colleagues and in the various districts uh when we go there all right so thank you thank you so much Mr.

Chairman thank you member waters and I would just one last thing um just to remind folks that we have our district seven's community swearing in ceremony and vision the session um on Wednesday January 28th from 530 to 7 at the St.

Susan Cody Rouge Community Resource Center and that's 19321 West Chicago we'll have refreshments and and really invite residents to come out and really put forward for shared vision of what we want district seven to go and with that um if there's no further business before this committee um this committee stands adjourned thank you all right send me a fly

And with that, um, if there's no further business before this committee, um, this committee stands adjourned.

Thank you.

All right, send me a fly.