HOUGHTON — The Houghton City Council went back to the drawing board Wednesday night after the announcement that the Veridea Group was withdrawing its proposal for a $40 million development on the big parking deck area along Lakeshore Drive.

In a letter to the city, Veridea CEO Bob Mahaney said based on the December 16 council meeting, the city “has no defined process in place that can move the project forward at this time.” At that meeting, the council retracted a motion to move forward in defining the property and obtaining an appraisal after objections from some council members that the city needed to explore more options and seek more input from the public.

“Further, it seems clear that the council may decide to create another community input process that will potentially change critical development parameters for the site,” Mahaney said in the letter, which City Manager Eric Waara read to the council Wednesday. “This is disappointing, especially in light of the fact that we have invested several hundred thousand dollars to date. With no clear path or word, we have no choice but to withdraw from the project at this time.”

Mahaney said Veridea would be willing to reconsider if the city created a formal process and was willing to reopen talks.

Waara took partial blame for the level of public opposition the project had attracted. He said he wished more people had come to meetings in the early stage of the project, such as when the master plan was being developed, and council, Planning Commission and Downtown Development Authority meetings.

“Some nights … it was one or two people in the audience,” he said. “And it’s a bigger shame that I didn’t appreciate that lack of information leading to such a level of distrust out there, once things started to actually happen.”

With the Veridea project off the table, Waara gave a presentation on the costs of maintaining the 42-year-old parking deck, and what would be needed for further upkeep.

Major maintenance and improvement of the deck would cost about $250,000 annually, Waara said. Tearing the deck down would cost about $1 million, while a replacement could cost the city $8.5 million over 30 years ($400,000 per year). He outlined several routes for generating that money, such as a millage that would cost owners of an average-value home $166 to $670 extra per year, or an additional $2,400 to $3,800 per year for a downtown business with an average-size lot.

“We just spent a lot of taxpayer money to buy us some time to work on a long-term solution for this thing, because this has got an incredible legacy cost to it,” Waara said. “We knew that through the years, it’s just that bill is coming due here sooner rather than later. We have a duty to find a solution that does not place the burden of this on the downtown businesses or the average taxpayer.”

Grants were not available for maintenance work during the last large-scale work on the deck in 2012-2014, and the grant climate is less hospitable now, Waara said.

Some council members and residents welcomed the opportunity for a fresh start. New council member Joan Suits — who along with Jan Cole and Brian Irizarry, ran last year on a platform of seeking more public feedback – suggested getting residents’ input into small businesses that could add to the city’s tax base.

“I think we want the next 40 years of whatever we create, to benefit the city and what the city can do financially,” Cole said. “And also be just a star of what this city looks like and feels like for its residents and its businesses and the people that come here. And I think that we are all very capable of bringing that to the table.”

Like Cole, Irizarry suggested bringing in outside consultants.

“I don’t think it hurts to add another member of the team that has expert teams on this second added to the city managers and the rest of the city’s expertise,” he said.

“The previous city council did that a year-and-a-half ago, but here we are,” Waara said.

Resident Norma Veurink said the first she had heard of the project was at the public meeting to select a developer.

“At no point in time were the citizens of this community asked what they would like to see done with it,” she said. And I think any solution needs to take that into consideration, needs to start out with community input — and not just the city residents, but the whole area.”

Councilor Dan Salo said he was 100% in favor of moving forward with the deck project.

“I hope we have not passed up a great opportunity without a realistic plan in sight,” he said. “I don’t want to be kicking this around for another year-and-a-half to two years with a bunch of ideas that aren’t feasible or there’s no financing.”

Mayor Pro Term Robert Megowen said it was only a matter of years before the city would have to close the deck.

“We have about a year to get something done … it’s really going to hurt our downtown businesses if we don’t have something going forward,” he said.

Frank Fiala, owner of 5th & Elm, called for another study to pinpoint the end of the useful life of the deck; while Megowen had put the remaining useful life at two years, the city’s project to extend the life of the deck 10 years had ended in 2014. He also questioned the Walker Consultants study of downtown parking, saying that a February trip to Houghton might have given them a skewed impression of the parking demand.

Options could also include a mix of responses, such as higher parking fees, he said.

“It’s real easy to sit there and say ‘Let’s take the deck down,'” he said. “But you’ve got about 13 or 14 businesses that are dependent upon that deck for their livelihood. And I am quite confident that if that deck goes away, most of those businesses will suffer tremendously.”

While most residents who spoke or submitted letters supported restart, some supported Veridea. William Kennedy expressed dismay at any potential delay, calling the Veridea proposal a “legitimate attempt to solve the crumbling deck problem by balancing the needs of existing users with the business interests of potential investors.”

Jon Julien of Julien Properties suggested an alternate plan for the site that he said would require less land to be transferred to private ownership. Julien Properties was one of the three companies that responded to the city’s original request for qualifications in 2019. The property would have a smaller footprint, more green space and amenities such as a public skating rink, he said.

Julien Properties has several other recent projects in the downtown, including The Vault, a boutique hotel; the Franklin Square Inn, which is being remodeled as a Marriott; and another proposed hotel near the City Center.

“The (Tax Increment Financing) benefits from these projects that we’re already working on can limit the amount of deck property that would need to be sold and developed to private property in order to pay for the improvements to the parking and create additional public spaces for people to gather downtown,” he said.