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Monday, February 9, 2015

FIFTY SHADES OF GREY HAIR: From The School House...To The Big House?

DID BAY CITY BUILDING BUYING BINGE BRING DOWN CHARTER "POSTER CHILD" FOR BAD MANAGEMENT?
 
With the start of Steven Ingersoll's federal fraud trial less than 24 hours away, Miss Fortune takes a look back at Steven Ingersoll's abortive Bay City-based Front Porch Renaissance program as a possible catalyst for his current criminal charges.

Beginning in the mid-2000s, Steven Ingersoll was telling anyone who'd listen about his ideas for Bay City's revival. 

Ingersoll's ambitious plans revolved around what he called "repositioning architecture," converting multiple family dwellings to single family and attracting a new class of resident workers to those areas of the city.

The self-described "optometrist-entrepreneur" (who'd split his time between Traverse City and Bay City since the early 1990s, even serving on the Bay City Planning Commission) began putting his ideas in action on 18+ residences and at least six commercial buildings (projects Ingersoll estimated in his Brownfield Redevelopment application to cost in excess of $8 million). 

The Bay City Commission unanimously approved Brownfield Redevelopment plans that helped pave the way for Ingersoll in 2010 to receive State of Michigan Obsolete Property Rehabilitation Exemption tax credits to clean up five of the properties he owned in Bay City. 

The properties, and Ingersoll's "estimated investment amounts" follow: 

108 Linn Street: $700,000
1900 Broadway: $750,000
606 N. Grant Street: $190,000
400 N. Madison Avenue: $3,000,000
114 N. Jackson Avenue: $3,000,000 

Ingersoll was denied a tax break on only one property—615 N. Grant Street.

At the Madison Avenue and Jackson properties—home to the Bay City Academy—Ingersoll planned to invest millions of dollars to create a cultural hub for the Bay City area. 


He had big plans to establish a church, charter school, an optical clinic, a performing arts theater, a culinary center and a gallery and loft for artists. 

Ingersoll was hailed as a visionary by city fathers
—and even some mothers!

Spinning like a striped top, Ingersoll proposed to turn Bay City's former Wolverine Knitting Mills building at 114 N. Jackson into a specialty guild where unemployed residents would be trained to make a variety of products, like optical lenses and dentistry tools.

Ingersoll envisioned the building serving as a marketplace for handmade crafts such as wine, art, paintings and quilts. He also planned to host artist space in the building and turn nearby homes he owns into cottages for artists.

“It will come in steps,” he said in late 2009. “We’ll be attacking the restoration of that building in the springtime.”


But the restoration was never completed, and the building sits vacant.

At one point, Ingersoll claimed that his Front Porch Renaissance employed 32 full time staff to carry out his vision.

And where did the money come from?

The primary funds for the redevelopment projects came from the Front Porch operating budget, which Ingersoll claimed he'd personally funded. 

The idea was to develop revenue generating projects and grant funds to allow Front Porch Renaissance to "leverage its resources and continue reinvesting into the development of the city". As properties were purchased and rehabilitated, they were supposed to begin generating revenue that would then purchase new properties in a process of continuous investment and reinvestment.

Although Ingersoll's projects received contributing funding from sources include the U.S. Department of Agriculture, the Michigan State Housing Development Authority office of Community Development, Historic Preservation tax credits, the National Trust for Historic Preservation Main Street Program, the U.S. Environmental Protection Agency and the Michigan Economic Development Corporation, the redevelopment wave hit a big snag.


Even though Ingersoll's Bay City buying binge continued well into 2012 (in addition to snapping up the 4,750 square foot Webster House Bed & Breakfast at 900 Fifth Street, Ingersoll purchased a 7,000 square foot home on Center Avenue he planned to convert into a B&B), he just stopped paying his Bay City property taxes after January 2012. 

Ingersoll now owes Bay City nearly $200,000 in property taxes.

On April 15, 2013, Ingersoll stood in front of the Bay City Commission (which was considering repealing his tax breaks) and explained that he had fallen behind by $29,081.02 in delinquent taxes on eight properties that had been receiving both Bay City and other tax breaks in order to "concentrate funds" both on the proposed bed and breakfast he called the Perry House, and the Bay City Academy's Farragut School campus near the corners of 9th, 10th and Grant streets. 

Ingersoll claimed both buildings would open during the summer of 2013. While the Farragut campus did open, the Perry House still sits vacant.

Ingersoll received OPRA tax breaks and Bay City leaders were considering repealing the commission-approved status on eight properties whose taxes were in default.

The OPRA designation allowed Ingersoll to pay 40 percent, rather than 100 percent, of the millage rate taxed on any improvements made at the buildings. 


At the meeting, Ingersoll said he wouldn't challenge the Bay City Commission repealing tax breaks on eight properties.

“Although I don’t like it, I understand it,” Ingersoll said of the planned repeal vote.

He said, despite the delinquent taxes, he hadn’t abandoned any redevelopment plans.

“Ok, so I haven’t directed my resources how I originally planned,” Ingersoll said. “I’m putting my resources where I know best. These buildings will get done.”


Ingersoll claimed that in the three previous years (2009-2012), his developments had led to 70 new jobs which paid an average of $30,000-per-person in wages, although he offered no proof.

Ingersoll said he’d paid $118,000 in property taxes and $109,000 in utility fees during that time period, again providing no documentation to back his claims.

The developer’s financial priorities were challenged by Bay City Commissioner Jim Irving at one point.

“It sounds like you may have overextended,” Irving said. “Our priority is the taxes.”

Ingersoll's response?

“That’s my decision. It’s not your place to tell me how to spend my dollar. If you want to make a penalty ... I guess you can do that, but I wonder about the wisdom of laying out an atmosphere that treats a guy like me with that attitude."


Other, less skeptical members of the commission expressed gratitude, and engaged in an egregious ass-kissing interlude for Ingersoll’s "development efforts".

“We’re behind you,” Mayor Chris Shannon said. “It's just, we're forced to make a decision.”

Commissioner Lynn Stamiris told Ingersoll he should have been more communicative with city officials regarding his properties’ tax problems.

Ingersoll suggested he stayed low on the radar, in part, to avoid media coverage. (Because you know that's how he got into trouble--it was the damned media!)


“This circus that ends up in our media is really not good for our city,” Ingersoll said at the time.

Cue the calliope!




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