OWOSSO — City officials have asked the new owner of the Matthews Building, 300 W. Main St., to “show substantial progress on securing the building within 30 days,” and owner Hager Development has agreed.
The structure — which is targeted for redevelopment — currently is in such dilapidated condition that part of the roof is caving in, windows are missing and doors are unsecured, creating a potentially dangerous situation.
Owosso City Manager Nathan Henne said Tuesday during a regular Owosso City Council meeting that he has asked the Royal Oak-based developer to fix the roof, replace missing windows, secure doors and take other steps to secure the building within 30 days. The clock started Tuesday.
“So, hopefully the community will start seeing them working on that,” Mayor Pro Tem Sue Osika said, adding she has heard a number of residents complain about the structure’s condition.
Nemer Haddad, Hager’s co-owner, said Wednesday that his company has agreed to take steps to “do necessary things” to make the structure safe.
“It’s best to clean it up, but minimally, so it doesn’t affect the capital stack (of financing elements),” Haddad said. “Then, hopefully we will develop a new gem in Owosso.”
Henne said Hager previously resisted making repairs because of concerns doing so would hurt the company’s plan to seek local government tax abatements and state-sponsored financing packages to assist in rehabilitating the building.
The packages and abatements require that no rehabilitation begin until the financing is approved. However, the city manager said, there is a difference between securing the building and doing rehabilitation work.
Securing the building is a health and safety issue, Henne said.
“(Hager owners) were worried that the work we are requiring them to do to secure the building … would jeopardize any chance they have to apply for local tax abatements to assist in the rehabilitation of the building,” Henne said in a memo to council. “They were assured that this would not be the case and that securing the building needs to happen concurrently with any efforts to secure an MEDC (Michigan Economic Development Corporation)-sponsored financial incentive package to complete the redevelopment.
“In other words, they are expected to correct major issues with the building even before the rehabilitation is set to begin. They understand.”
Henne said he and the city building official met with Haddad last week to discuss the repairs. He said he sent the developer the “entirety of the property’s building code file” Tuesday, along with the request for repairs.
In response to a question from council member Lori Bailey about demolishing the Matthews Building, Henne said Hager wants to pursue financing packages first, because he hopes to rehabilitate the building.
Haddad said Wednesday his company originally wanted to demolish the building and rebuild, but after finding out about grants and other forms of financing available to rehabilitate a historical building, Hager decided to pursue rehabilitation.
After recent state funding cuts to the MEDC, Hager’s owners reconsidered demolition and do not rule it out completely, Haddad said. For now, however, the company is pursuing multiple sources of grants and loans, including the Michigan Community Revitalization Program.
“But we are weighing all of our options at this point,” Haddad said.
Hager Development purchased the Matthews Building last fall after Haddad’s NX Meds LLC won one of the four marijuana retail center licenses in a lottery conducted by the city June 13, 2019.
Haddad said he is in talks with several possible other tenants, local and national.
“We’re very excited to be in the Owosso market,” Haddad said, “and make a mark on the city.”