Three years after ceasing operations on June 1, 2020, the Diesel Plant, located on South Harbor Drive near the YMCA, sits idle. The plant was constructed in 1929 and operated by the Grand Haven Board of Light and Power (BLP). After 70 years of operations, it was no longer economical or efficient to keep online. Today the property is owned by a developer who has asked the city to declare the property obsolete in the hopes of getting tax breaks. Here is an overview of what has taken place since the Diesel Plant ceased operations.
In October 2020, four months after the diesel plant stopped operating, the BLP obtained four proposals from developers interested in the property.
The BLP was in favor of selling the property to Capstone Real Estate, a local company with a vested interest in the community, who had also made the highest offer for the property. In February 2021, the BLP formally recommended proceeding with Capstone Real Estate, but the city council was not convinced. At that time, the city council sent a survey out to community members to obtain their perspective on the property.
Once the survey was completed, the city rejected the BLP recommendation to proceed with Capstone Real Estate developing the Diesel Plant property. Instead, in June 2021, the city requested new proposals that would ensure the preservation of the exterior of the building. They received three proposals and elected to proceed forward with CL/Lakewood (current joint venture with Grand Power Works, LLC).
Three citizens who gave public comment during the June 20, 2023, city council meeting referred to the 2021 survey. The first citizen expressed concern that the survey did not contain any financial information.
“A few years back, the city asked us by way of a survey included in our water bill, if we wanted to preserve the BLP Diesel Plant on Harbor Drive. 43% said yes, save the building. What we weren’t asked was, by how much are we willing to discount the property to save the building. Here’s the survey. If you would like to look at it, you will find that there are no financials. []
We residents weren’t asked if we were willing to discount the price of the property by $1 million, but that’s what happened. Grand Power Works LLC bought this site for $1 million less than what another developer was willing to pay. That’s a big give!”
A second citizen noted that the survey was not an accurate representation of the desires of the community.
“By selecting this project over another proposed project, city leaders have already foregone at least $6,109,000 over a period of 10 years; $1,125,000 on the original purchase; $3,864,000 construction, economic impact, $1,120,000 in real estate taxes. Now they are back. [developer] They want another $1 million bucks, and I think that that is wrong. 43% by the way, of that 43%, that was only of 7% of the City of Grand Haven, it wasn’t even a valid response.”
A third citizen noted the simplicity of the survey.
“This [financials] was not explained at all when the survey was sent out. In fact, it [the survey] had six pictures and asked people to just check a box.”
On July 19, 2021, the city noted that it was risky, but voted to proceed with the CL/Lakewood proposal, because they felt that was what the community wanted.
In November of 2021, the city council was again having second thoughts. At that time, they postponed the finalization of the purchase agreement several times and decided it was time to authorize an independent appraisal of the property. Just one month later, in December 2021, the city council voted to send a letter conveying their intent to work exclusively with CL/Lakewood and proceeded forward with the project.
In April 2022, the city and CL/Lakewood discussed the vision and broad concept options for the project, including parking challenges and preservation of the historic building. They also discussed what would be included in the redeveloped facility; a restaurant, office space, and/or condos? Again, the project slowly proceeded forward as purchase agreements to complete the sale were prepared.
In April 2023, requests were made for changes to the right-of-way in the vicinity of the Diesel Plant and to provide 19 parking spaces to Grand Power Works, LLC, (joint venture with CL/Lakewood) for the Diesel Plant development.
In May 2023, the sale was officially finalized and just recently, in June 2023, a request was made by the Grand Haven Chamber of Commerce on behalf of the developer, Grand Power Works LLC, to have the Diesel Plant declared obsolete. This declaration could lead to up to 12 years of tax breaks. Several members of the community were opposed to this request and voiced their opinions during public comment at the June 20, 2023, Grand Haven City Council meeting.
“This ask is coming at a very bad time. The city needs money to clean up Harbor Island and fund a pension. The Grand Haven Area Public Schools are asking for more money too. Oh, and did I mention, we just got a tax increase of .5 mil?”
Another citizen commented:
“Tonight, you are being asked to vote on declaring the old Diesel Plant an obsolete property rehabilitation district for the purpose of allowing Grand Power Works LLC to apply for a tax freeze of up to 12 years. Vote NO! Don’t put the ball in motion for another sweetheart deal.
We the taxpayers are being faced with unprecedented costs including approximately $30 million in unfunded pension liabilities, $40-$60 million in Harbor Island clean-up, not to mention an additional .5 mil of property tax, and the likely possibility of an additional 1 mil, especially if we’re going to have to pick up the tab for a business that now says it won’t be able to fund a project. []
A new business on the river should not need to be subsidized by the city. [] Remember the city has real future costs. If there is a tax freeze, the other tax payers including our main street businesses will be forced to help close the gap and we will all pay higher taxes with the exception of the sweetheart beneficiary. “
Although it is good for elected officials to take public opinion into account, they are expected to exercise discernment in making decisions for the people they represent. Public officials are not bound to make their voting decisions based on results of a survey completed by only a small percentage of the citizenry, especially when some citizens feel that the survey lacks sufficient details and background information.
It is the responsibility of government to provide clear direction so that the entities they manage can operate smoothly and their citizens can benefit. Next time you go to the voting booth, make sure you have enough facts to make an informed decision.