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Water Street in Ypsilanti

(File photo)

As Ypsilanti moves forward with a $1.2 million Family Dollar project that will become the first development on the long-vacant Water Street site, officials are still working to secure more interest in the property.

According to City Planner Teresa Gillotti, the city has received inquiries regarding the 38-acre site. The city began began assembling the site in 1999 with a vision to turn it into a premier waterfront residential and retail hub.

"There has been interest," Gillotti said. "There's been some general interest particularly around housing."

Gillotti did not provide additional details on who the interested parties may be, but a Water Street update presentation is on Tuesday's city council agenda.

Gillotti said she will do the bulk of the presentation, but CBRE representative Arthur Itkis will be on hand to provide information as well.

The city hired CBRE, a real-estate firm based in Southfield, to help market the project nationwide in June 2008. CBRE is marketing the property for an undisclosed price as a mixed-use development project. A marketing flyer states that riverfront property is available.

Development has been slow to happen over the years at the site, but Family Dollar and the city signed a development agreement earlier this year that allowed the company to purchase nearly one acre of land for $210,000.

The City Council will decide Tuesday night whether to approve the company's site plan and Planned Unit Development rezoning, which will push the project closer to construction.

The planning commission approved the site plan and PUD in September.

The store is slated to be constructed at 216 E. Michigan Ave., at the southwest corner of E. Michigan Ave. and Park Street. The project also calls for the construction of Lincoln Street.

A public hearing and first reading will be held on Oct. 15 and the second reading, as well as a resolution for approval of a PUD agreement, will be held at the council's Nov. 5 meeting.

Officials have estimated that Family Dollar will pay about $30,000 in taxes annually that would go toward paying down the debt incurred thus far for the property.

Updated numbers provided by Ypsilanti's Fiscal Director Marilou Uy show that as of May 3, the city owes $24,764,695 on the Water Street debt, a decrease from 2006 when the city owed close to $30 million. This number includes the interest and principal amounts.

The next payment, $435,070, is due Nov. 1.

The Washtenaw County Parks and Recreation Commission has also expressed interest in constructing a nearly 60,000-square-foot recreation center on the property.

The city council recently granted the WCPRC six additional months to complete plans. Eight acres of the property have been taken off the market, after the city signed a letter of intent with the WCPRC.

The city is continuing to work with the WCPRC to move that project forward.

Katrease Stafford covers Ypsilanti for The Ann Arbor News. Reach her at KatreaseStafford@mlive.com or 734-623-2548 and follow her on Twitter.