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PROGRESS 2022: MAHLER: Last year was a good year, despite headwinds

Last year at this time, I was asked to write a column sharing my thoughts on what 2022 was going to look like in terms of development activity.

This year, I was asked to write a follow-up article on how the year went compared to those predictions.

The year 2022 was an interesting year.

There were many economic development headwinds that we faced as the year developed. The Federal Reserve board began to aggressively raise interest rates to slow down a strong (overheated) economy. Inflation is higher than we have seen in decades. Material prices, fuel, food, and most everything we touch became more expensive. Supply chain issues only added to the problem. The scarcity of raw materials and commodities drove those prices up and, in the end, the cost of living rose dramatically for all of us.

On the surface, one might expect this to be a recipe for a real slowdown in economic development activity.

As it turned out, 2022 was a much stronger year, given the economic environment. There is more to celebrate than mourn in terms of development activity in 2022.

As the year began, the Starbucks and WellNow Urgent Care projects began vertical construction on M-32. Those two projects were too far along to be disrupted by the economic dynamics. By mid-summer, they were both open and the windshield assessment today is that things are good for both entities, as there is no shortage of vehicles in the parking lots.

We were successful in securing a Michigan Economic Development Corp. grant to support the development of the former Habitat ReStore property on Chisholm Street. The mixed-use development will add five retail spaces and 15 market-rate apartments from one- to three-bedroom. The grant is nearly $5 million. We were fortunate to receive those funds. Three grants were awarded north of M-55, including one in Marquette and one in Traverse City. Of the three grants awarded in northern Michigan, ours was the largest by far.

In 2022, we learned that the Alpena Combat Readiness Training Center secured funding to build a $23 million hangar to house and service the latest military aircraft. That will now make the CRTC a viable training location for the units flying, supporting, and maintaining those aircraft. We also learned the runway needed significant repair. Between the county, the Department of Defense, and the Air National Guard, funding was secured for this $52 million runway rebuild project. With so much taking place at the airport, it was decided the timing was right to also upgrade the air traffic control tower. That project is another $3 million. In 2022, funding was secured, and now $75 million will be spent locally next year between those three projects.

During the year, a housing task force was formed. Led by the city, the county, and Alpena Township, there are many stakeholders involved. The need is critical for us to address if we want to bring people to the area. A housing needs assessment has been ordered. That report will be the main tool we will use to get the attention of developers. The housing needs assessment will take a broad look across all spectrums of housing, from rental to ownership, from condos to free-standing. It will also identify the gaps in senior, workforce, and market-rate housing. I was encouraged late in the year that I had several inquiries from developers looking to explore various housing projects. While nothing solid has taken place, I am encouraged by the elevated interest in such projects locally.

The Aldi’s project on M-32 stalled when the developer and the Alpena school system could not come to an agreement on the new bus garage. The developer is still looking to bring an Aldi to our community and is evaluating an alternative site. Aldi is the sixth-largest grocer in the world and is very selective in the markets they enter. They have very specific metrics they use for location choices. Our hope is the alternative site will meet these requirements.

Late in the year, we received word that a Hampton Inn was coming to the area on M-32, just west of Home Depot. The Alpena Township Planning Commission approved the site plan in November and the developer plans to break ground this spring.

A little farther to the north, Rogers City was awarded a Main Street designation by the MEDC, which is a big deal. In addition, they also became a Redevelopment Ready Community. Both projects require a great deal of effort to achieve, so congratulations to them. Rogers City is now poised and positioned to attract capital investment. I am aware of several projects in the works or being evaluated there, not counting the Tractor Supply that was announced there this late spring. It is great to see those achievements for our neighbors to the north.

In 2022, there were setbacks as well. The community lost the Fairfield Marriot hotel project downtown on the river. It was a huge disappointment, given that a year was spent working to find a way to bring that project to life. The rising interest rates and rising costs of construction were enough to make that project no longer financially viable. The developer indicated that they may have been able to deal with one of those issues and keep the project going, but both made the financial chasm too wide to span.

Lastly, the city has sold their first parcel of the land they own at the north end of town. It has been for sale for 20 years. The sale of 4 acres closed in the fall. They also have four purchase agreements in place for three other sites on that property. We hope another closing will occur and a second project will take form in 2023 on that land.

From where I sit, 2022 was a very good year, despite the economic conditions. There were far more positives than negatives, in terms of development activity in 2022.

As we look to the start of 2023, things look promising.

The planned activity at the CRTC and Alpena County Regional Airport, Marshalls opening their doors, the start of the Hampton project, and, hopefully, the development on the former Habitat ReStore site beginning. Finally, it looks like the Sanctuary Cinema will be opening sometime in 2023. The restoration of the exterior of the building is a huge win for our downtown.

All in, I would say 2022 was a very good year, and the momentum will continue into 2023.

My hope is that, next year, if asked, I can write another positive column on development activity in and around the area.

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