Sable Homes, state and local entities officially welcome pilot program home development in Newaygo

Sable Homes, in cooperation with Fishbeck, the City of Newaygo, Newaygo County, and the Michigan Land Bank Authority, kicked off phase two of the River Hills neighborhood in Newaygo this morning with a ribbon cutting ceremony. The celebration marked the official welcoming of a pilot program designed to increase Michigan’s housing stock and help alleviate the region’s housing crisis.

Speakers at the ribbon cutting included those who have been working on the project for the past two years, including: John Bitely, president of Sable Homes; Jon Schneider, Newaygo City manager; Emily Doerr of the State Land Bank Authority; and Susan Wenzlick of Fishbeck.

“When we took over this project in 2017, we had no idea what we were up against in terms of labor and material costs, creating an exorbitant price range for these homes – which was the opposite of what we wanted to do here in Newaygo,” Bitely said. “We knew we had to come up with a creative way to make this a viable neighborhood without breaking the bank. And through our conversations with the state Home Builders Association, city and county officials in Newaygo, the Michigan Land Bank Authority, The Right Place and Fishbeck, a Grand Rapids environmental and engineering company, everyone came together to make it happen.”

Prior to Sable Homes taking over the River Hills Estates in Newaygo in 2017, it had sat unfinished for nearly 15 years after the original developer pulled out with only four homes completed. Within two years, Sable Homes built on and sold homes on the remaining 27 lots. In order to complete the final phase of the neighborhood with 16 new home sites, Sable Homes, the City of Newaygo, Michigan Land Bank Authority, Newaygo County and its Brownfield Redevelopment Authority, The Right Place, and Fishbeck came together to seek brownfield incentives to help pay for infrastructure and site preparation and environmental costs to bring needed housing stock to the region. Those incentives were approved by the Newaygo County Brown Field Authority in 2020, allowing the project to move forward using tax increment financing (TIF), an old incentive applied in a new way to close a construction funding gap.

“Once Newaygo County’s Brownfield Redevelopment Authority, Newaygo City and Sable Homes had agreed to the project concept, we developed the Act 381 brownfield TIF plan, which authorizes the brownfield authority to offer TIF as an incentive to developers for projects that the authority determines are in the public good, like new housing to help meet local needs,” said Wenzlick. “This now allows Sable Homes to be reimbursed over 12 years for site preparation and infrastructure funding gap, plus interest and the cost of developing the brownfield plan.”

Doerr of the State Land Bank Authority shared: “This approach had never before been used for housing, but state and local government stakeholders were all on board,” Doerr said. “We held on to the property from fall 2020 to early 2021. During that time, the property taxes were reset to zero, slightly increasing the amount of tax revenues that could be used to repay Sable Homes for its eligible expenses. We will be reimbursed from tax revenues for participating in the project, and the county will keep some of the tax increment revenues for a county brownfield revolving fund after Sable Homes is reimbursed. It’s a win-win.”

“We have a great community here in the city of Newaygo with residents who enjoy living and working here. But for many of our residents, it’s hard to find new housing that’s affordable,” said Schneider, Newaygo city manager. “We are grateful that John Bitely understood the housing need here and worked with state and local officials to find a way to bring affordable new homes to our area. We hope what we’ve done here will gain some notoriety and help close the housing gap in other areas of the state.”

New homes in River Hills Estate will start at $260,000.