Commission moves forward with plan to transfer apartments to housing commission; members press for resident protections

The City Commission reviewed resolutions and an ordinance that would allow the Benton Harbor Housing Commission to take ownership of two apartment projects and to exercise expanded powers under city code.

Staff said the transfers are intended to enable a Rental Assistance Demonstration (RAD) structure that requires the housing commission or its subsidiary LLC to hold title so private developers can participate and tax-credit financing can be used. Under the proposed arrangement the city would receive a payment in lieu of taxes (PILOT) of approximately $50,000 a year; staff projected this could amount to about $750,000 over a 15-year PILOT period, and said the housing commission would have a right of first refusal to purchase the property at the end of that period for a time-limited window.

Commissioners pressed staff for specifics. Several asked who would sit on the LLC board, whether appointed seats could be filled by residents of the projects, and how many seats would represent private investors. One commissioner said an LLC board of five with two seats held by the housing commission and three appointed seats could leave residents without a voting majority. Commissioners demanded assurances that current residents would be protected during rehabilitation and asked for a relocation plan explaining whether rehabs would be done building-by-building or require temporary relocation.

The commission also highlighted enforcement of Section 3 requirements (local hiring and contracting preferences) and requested that the housing commission provide quarterly reports to the city commission so elected officials could track contractor hiring, resident outcomes and compliance. Staff noted that some of the detailed operational decisions, including relocation logistics, had not yet been finalized.

Both the PILOT ordinance and the transfer were set up for additional consideration and a first reading; staff said the matters would return on the 15th to allow answers to raised questions and to give commissioners time to review the documents.