Many people keep asking, what is Water Street and why does the City of Ypsilanti owe over $30 million on a land speculation deal gone horribly wrong. It is story about why City government should never get into the land speculation business and how consultants, planners, bond attorneys, and a very young and inexperienced city planning staff joined forces with a Mayor and City Council who wanted to transform a small town in Michigan. The result is a college town of just over 18,000 saddled with a crushing debt, threatening to lay off the police and fire department, unless voters agree to a 30% increase in taxes to pay for the Water Street fiasco.
The story is fascinating and it isn’t over. The city paid over $750,000 an acre for the 38 acre contaminated brownfield site next to City Hall along the Huron River and Michigan Avenue.
Today, a new Council led by a Mayor largely hand-picked by the previous mayor that got us so deeply mired in Water Street is now pushing to give 8 to 10 acres of the land to the County to build a Recreation Center. They want to site the Rec Center on the very best part of the commercial property right along the river and busy Michigan Avenue. That land giveaway will cost the citizens of Ypsilanti, over $7 million to build a rec center that won’t generate a single dollar in taxes.
The promise of bringing in new jobs and a new developer as a result of this Rec Center is also unproven. No where can the City point to a single project in Michigan where building a community center has led to the redevelopment of the neighboring property that resulted in $100 million of new development.
That City says in order to pay back the money owed on the property, they need a developer to come in and build $138 million dollars in new buildings. Just how unrealistic is their scheme you may ask?
Today, if you add up the value of every building, home, apartment, and business. Add that all up, and the total value of all the property in Ypsilanti is just over $300 million.
The City in order to pay off the crushing debt, needs a developer to come in and build $138 million in new buildings.
Prospects for selling the rest of the property seem grim as numerous developers over the years have come to City Hall with plans for redevelopment, from shopping malls to large- scale retailers to fast food restaurants, grocery store, student housing, senior housing, car dealership and more. All of them rejected or never pursued because the Mayor and Council had this vision of 892 closely packed in 1,000 S.F. condos selling at a starting price of $99,000. (See an ad from 2001 for Water Street)
When politicians that got us into this mess tell you this 30% tax increase has nothing to do with Water Street they simply don’t understand the problem. It has everything to do with Water Street.
And the very same former elected officials, every single one of them that got us into this mess, are on the committee campaigning to increase your taxes. They are working hard to convince you to bail them out of this mess with a new City Income Tax and crushing new property taxes that by 2017 will mean a 30% increase in taxes everyone pays in Ypsilanti.
If only someone would have stood up earlier and said something. They did.
In 2003 nine Ypsilanti residents wrote an open letter to the City of Ypsilanti and their elected officials asking questions about the project. The citizens pegged the project at the time at $5 to $7 million. The City was telling citizens only $3 million and promised that No Taxpayer money was being used for this project. That turned out to be a lie.
The City dismissed the letter saying they didn’t have their facts straight. That is true. By 2005, the city hadn’t spent $7 million as the citizens had estimated, the City had already spent $10 million and was planning to spend $13 million more.
The Devastating Doyle Memo
In 2005, nationally known planner and architect and Ypsilanti resident Bob Doyle penned the Water Street Memo to then Mayor Cheryl Farmer. Doyle, who was a signator of the 2003 letter, took the city to task for its unrealistic plans, financing scheme, and unwillingness to listen to other voices in the community. Doyle’s memo and the history of Water Street is devastating.
Even in 2005, had the City just stopped spending money, it would have saved the citizens over $20 million. Yet the City kept driving on. One City Council member famously said, “We can’t stop, we have spent too much money already.”
Today, the property remains undeveloped, the taxpayers of Ypsilanti are facing the prospect of having the highest property taxes in the entire State plus a new City Income Tax. All to pay for what 6 people did on City council, spending other peoples money, in one of the great taxpayer financed land deals gone wrong in S.E. Michigan
More Stories and Links on Water Street
Ypsilanti Planning Director forced out March 22, 2008
Water Street developer bails on project December 8, 2006
Grocery store coming to Water Street
Video: Water Street Update Ypsilanti City Council September 18, 2008
Video: Ypsilanti City Council Water Street Update Dec 15, 2008
Copper thieves strip Water Street buildings
More doom and gloom from Council over City Income tax and Water Street May 26, 2007 with video
Water Street disappear from City’s Website January 1, 2007
Is there a glut of condos in SE Michigan?December 30, 2006