The staggering cost of hooking up to Oxford Township’s water and sewer systems has one Waterstone developer crying foul.
‘I am going to have a tough time getting this development off the ground because of that,? said Paul Aragona, developer of the yet-to-be-built 86,747-square-foot shopping center known as ‘The Promenade at Waterstone, south of Meijer, on M-24’s east side.
The combined capital cost of hooking up two of the center’s proposed restaurants, one of which is a Chili’s Bar & Grill, to the township’s water and sewer systems is $578,555.
‘Tenants will just not be able to pay these kind of fees,? Aragona said. ‘We will not be able to attract restaurant uses in our shopping center and as a result, our shopping center’s unbalanced.?
‘Without the component that food and entertainment provide, we cannot build a so-called lifestyle center. I think the whole project would be in peril if we couldn’t add that element into our shopping center mix,? the developer explained.
Aragona went to the township’s Water and Sewer Committee last week seeking some sort of ‘relief? from these ‘substantial charges.?
‘From a practical standpoint, it’s a number that just can’t work for restaurants,? he told officials. ‘Restaurant uses in this community, if they could afford to pay these kind of numbers, would be at a competitive disadvantage to all others previously in the area.?
His request was unanimously denied.
‘I want restaurants to come in here, but we’re here for fairness,? said township Supervisor Bill Dunn. ‘We have to do everything the same. We can’t treat you any different.?
Dunn said if the township gives Aragona a break on the hookup fees, ‘I’m going to have every resident in this community come to me and go, ‘Bill, these are tough economic times, please take a look at this.??
‘I’m not going to set a precedent,? the supervisor said.
Currently, it costs $6,075 per Residential Equivalent Unit (REU) to tap into the township water system and $2,500 per REU to hook up to the sewer system.
An REU is a way to equate high volume users to single family homes, which are used as the standard. One REU is equivalent to 250 gallons per day or 7,500 gallons per month.
One single family home is equal to 1 REU whereas a conventional restaurant is equal to 0.13 REU per seat.
The township previously raised its tap fee for the water system to $6,075 per REU in order to help pay off the $17.7 million in bond debt the municipality incurred to improve the system and meet federal standards, which Dunn described as ‘unfunded mandates? that ‘we had to comply? with.
‘That charge is not going to change as far as I’m concerned,? Dunn said. ‘It’s set in stone. It’s set in stone by the township board to pay off our bond debt. It’s not even negotiable.?
Kallie Roesner, a member of the Water and Sewer Committee, noted the charge is based on ‘legitimate research? and actual costs of the additional infrastructure for the water system such as a new 1-million gallon water tower and two treatment plants.
‘That is what it is going to cost each and every REU that comes in to supply that amount of water and that capacity for sewer? she said. ‘So if we discount for somebody, the other person has to pick it up. The pipe costs money.?
In other words, in order to give Aragona the relief he’s seeking to bring in restaurants to his development, homeowners would have to be made to pay more to retire the water bond debt.
‘I will not ask our residents to pay an increase in anything. They’re paying enough,? said township Trustee Doleen Behnke, also a member of the Water and Sewer Committee.
Although he and the committee were not willing to negotiate the dollar amount charged per REU, Dunn said he was willing to look at the number of REUs assigned to each restaurant when this issue was first brought up by the developer.
As it stands right now, the Chili’s was assigned a value of 28.47 REUs based on its 219 seats multiplied by 0.13 REU per seat. The total water/sewer hookup fee worked out to be $244,130 based on $8,575 per REU.
Because of this high cost Chili’s is ‘vacillating,? according to Aragona, whether or not to open a restaurant in Waterstone.
‘They got the amount and they’re choking on it,? Aragona told this reporter following the meeting. ‘They’re reviewing the situation. They have not waved off for us to start the construction of that building.?
‘Hopefully, they stay in the game otherwise this project’s done for a while,? Aragona added.
The other restaurant, which Aragona said was going to be a pizza place, had an estimated REU total of 39 based on its 300 seat multiplied by 0.13 REU per seat. The total water/sewer hookup fee was calculated to be $334,425.
Aragona said the owner of this pizza restaurant, which has a ‘successful? location in Macomb Township, told him he cannot add that much to his costs and open in Oxford.
‘With this kind of number, he tells me he absolutely cannot, it totally turns his economics upside down,? he said. ‘It’s a number that really breaks the camel’s back.?
In Macomb, Aragona said this owner paid $33,000 to hook up his 7,000-square-foot restaurant to the water and sewer systems. He was able to ‘absorb? that cost and make ‘a successful go of it.?
‘I think it’s unfortunate that he can’t do it here in this community,? Aragona said.
Dunn reiterated the township is only concerned with how many REUs the restaurants are assigned and whether it’s the proper number, not the cost per REU, which again he emphasized was not negotiable.
The township had engineer Jim Sharpe, of Giffels-Webster Engineers, look at the number of REUs assigned to restaurants in other communities.
In Lyon Township, a Chili’s was assigned 22.1 REUs and paid $171,348 for just sewer hookup in July 2003. In the same township, an Applebee’s was assigned 19.6 REUs and paid $151,965 for again just sewer in July 2003.
Closer to home, based on actual water usage, Sharpe determined Red Knapp’s American Grill, with its estimated 170 seats used the equivalent of 27.3 REUs per month on average this year. It’s hooked up to the village’s water system, which is separate from the township’s.
Kalloway’s Restaurant and Pub, located in the township, but hooked up to village water, has used the equivalent of 20 REUs per month on average this year. It has 360 seats
‘When you do the math, you know it’s really not that far off,? said Dunn, referring to the REUs.
‘We have data from six other municipalities over here that show the REU calculation is in the ballpark,? said Oxford TownshipPlanning Commissioner Todd Bell, who sat on the Water and Sewer Committee meeting as an alternate for an absent trustee.
Because the Chili’s was assigned 28.47 REUs for 219 seats while Red Knapp’s actually used 27.3 REUs per month for an estimated 170 seats, Bell said this ‘tells me we’re (the township) behind, we’re actually low.?
Bell noted that the City of Fenton charges a combined $8,000 per REU for water and sewer hookups.
Aragona told the committee he intends to look into installing a private water/sewer system for his development.
‘The only way we can reasonably use our property is to put a private system down so that we can use it as zoned, as we bought it for, as we contemplated,? he said.
But officials told Aragona that’s not an option.
‘We all know that’s futile,? Behnke said.
Dunn said the township ordinance clearly states if municipal water and sewer services are available to a property, new development must hookup to them.
In order to obtain a variance for a private water/sewer system, Roesner said Aragona would have to show that he ‘can’t get ? those services from the township or they’re ‘not available? from the municipality.
This is ‘unlikely? given all the improvements the township is making to its system’s infrastructure, she said.
Dunn noted if Aragona’s request for a private system was granted, the township would have to ‘allow everybody who comes in front of this board to plunk wells down and put in their own septic.?
‘If we do it for you, we’re going to have Gary (Lepak) over at Kalloway’s saying I don’t like the price of the sewer and I don’t like the price the village is charging me for water,? the supervisor said. ‘I don’t think that’s going to happen.?
A private water system would also not be possible given there’s a contaminated industrial site within a half-mile of the Promenade, according to officials.