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muskegon michigan economic feasibility - Domicology

muskegon , michigan deconstruction economic cluster feasibility study michigan State University Center for Community and economic Development West michigan Shoreline Regional Development Commission 2017. Executive Summary Purpose: Funded in part by the Department of Commerce economic Development Administration, the muskegon Deconstruction feasibility study was designed to examine the feasibility of deconstruction as an alternative solution to the economic , social, and environmental problem of structural abandonment. Focusing on Midwest legacy cities with high concentrations of structural abandonment, this study tests the economic feasibility of using deconstruction practices rather than demolition as a way to reduce blight. Additionally, the study explores the feasibility of establishing a deconstruction based, repurposing sector economy in muskegon , michigan . Taking advantage of the under-utilized Port of muskegon , a cluster economy would receive salvaged building materials from deconstruction activities in surrounding great Lakes port cities, then process and sell those materials through repurposing centers.

2 transportation was feasible. This is partially a result of the inability to util ize container shipping for transporting salvaged building materials, as well as a primitive Great Lakes

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Transcription of muskegon michigan economic feasibility - Domicology

1 muskegon , michigan deconstruction economic cluster feasibility study michigan State University Center for Community and economic Development West michigan Shoreline Regional Development Commission 2017. Executive Summary Purpose: Funded in part by the Department of Commerce economic Development Administration, the muskegon Deconstruction feasibility study was designed to examine the feasibility of deconstruction as an alternative solution to the economic , social, and environmental problem of structural abandonment. Focusing on Midwest legacy cities with high concentrations of structural abandonment, this study tests the economic feasibility of using deconstruction practices rather than demolition as a way to reduce blight. Additionally, the study explores the feasibility of establishing a deconstruction based, repurposing sector economy in muskegon , michigan . Taking advantage of the under-utilized Port of muskegon , a cluster economy would receive salvaged building materials from deconstruction activities in surrounding great Lakes port cities, then process and sell those materials through repurposing centers.

2 This cluster economy would require a skilled labor force, supplied by job training programs in an area that has suffered from high unemployment rates. Process: With the advice and guidance of a local and regional advisory committee, the MSU team gathered secondary and primary data. The catchment area of cities targeted by this study was selected with specific criteria, including cities with high concentrations of structural abandonment, an active port to transport deconstructed materials to muskegon , and a land bank to facilitate the acquisition of abandoned houses eligible for deconstruction. All cities in the catchment area for this study are in close proximity to a deep water port. Several data collection methods were necessary, including communication with land banks in the catchment area in order to gather data on the amount of abandoned properties held by individual land banks, current practices for eliminating blighted structures, number of properties sold or demolished annually, the types and volume of material generated in structural demolition, possible reuses of this material, the identification of industries that may reuse this material and transportation costs associated with shipping this material to the Port of muskegon , and primary sources of funding for blight removal.

3 Research was gathered through phone and in person interviews, as well as through online questionnaires. Findings: At the conclusion of this study, several findings are presented that can influence the feasibility of increased deconstruction practices in the Midwest. Additionally, a strategic economic development plan outlines the steps necessary to establish a deconstruction based economic sector in muskegon . Relevant to both deconstruction practices and the deconstruction cluster economy, the study concluded that there is a sustainable supply of salvaged materials available in the designated catchment area that can be sourced from abandoned vacant properties, renovations, or new construction. With respect to the feasibility of increased deconstruction practices as an alternative to demolition, the study found that while a deconstruction enterprise can probably earn a small net profit, wood and brick materials were shown to have the most immediate promise for repurposing values.

4 While shipping was examined, the findings of this study concluded that truck transport was the favored mode of transportation in 9 out of 10 designated cities, with the exception of Milwaukee where barge 1. transportation was feasible. This is partially a result of the inability to utilize container shipping for transporting salvaged building materials, as well as a primitive great Lakes deconstruction industry supply chain. More developed supply chains in Europe, California, and the East Coast allow deconstruction practices to be more competitive against demolition and disposal. A successful supply chain is defined by the ease with which deconstruction firms can acquire abandoned homes from land banks, access a skilled deconstruction labor force, and use low cost modes of transportation to move salvaged materials to processing facilities. This study found that - considering the existing supply of salvageable building materials in the catchment area, the presence of existing domestic and international firms involved in repurposing salvaged building materials, and the sufficient capacity and infrastructure of the Port of muskegon - a deconstruction based economic cluster in muskegon is feasible.

5 In order to develop an economic sector beyond this feasibility study, steps would need to be taken by both public and private partnerships in West michigan to develop a supply chain for salvaged building materials in the great Lakes. To promote the development of this new economic sector, West michigan leaders would need to market muskegon to industries with the capacity to repurpose salvaged building materials. In addition to soliciting business ventures, financing from private and public ventures is necessary to assist business formation and expansion, as well as developing an extensive workforce training support. Recommendations: Based on the findings presented in the study, several recommendations have been developed in order to increase the feasibility of deconstruction practices and establishing a deconstruction based economy in muskegon . Demolition is favored by land banks as the primary solution to eliminating blight because it is both inexpensive and can be done quickly.

6 The additional cost of deconstruction when compared to demolition can be reduced if: net cost is considered, firms prioritize salvaged materials that have high resale value when compared to time spent salvaging, and firms purchase groups of abandoned structures that are in close proximity. With respect to policy, federal funds used for blight elimination including Hardest Hit Funds and CDBG. grants often require funding be used within a short time frame. Loosening time restrictions would allow land banks to contract deconstruction firms to remove abandoned structures at a more reasonable pace. Additionally, state legislation to increase tipping fees for dumping C&D materials in landfills would increase the cost of demolition, and allow deconstruction firms to compete more competitively. Local ordinances mandating all demolition activities must repurpose or reuse at least a portion of C&D materials directly would also increase the demand for deconstruction practices.

7 2. Table of Contents Executive 1. 7. Principal Authors .. 7. Introduction to the MSU Center for Community and economic Development .. 7. Introduction to the West michigan Shoreline Regional Development Commission .. 8. Erasmus 8. Funding from EDA .. 8. CHAPTER 1: Scale of Abandonment .. 10. What is Structural Abandonment in the United States? .. 10. What are the Causes of Abandonment? .. 10. What are the Impacts of Abandonment? .. 11. Environmental Impacts .. 11. Social Impacts .. 17. Health Impacts .. 17. economic Impacts .. 18. Reuse and Repurposing Options .. 20. 20. How was data collected? Surveys used, major data points .. 20. How was data analyzed?.. 21. CHAPTER 2: Current Method of Removing Abandoned Structures .. 23. Scale and Scope of Abandonment in and the 23. Number of Abandoned Structures .. 24. Scale and Causes of Abandonment by Land Use .. 24. Industrial Abandonment .. 24. Commercial Abandonment .. 24. Residential Abandonment .. 25. Material Recovery Process: The Three Skim Paradigm.

8 27. First Skim: Removal of metal items .. 27. Second Skim: Items of architectural value .. 27. Third skim: Everything that's left .. 28. Typology of abandoned houses .. 29. 3. Condition of abandoned houses .. 30. Types of material in abandoned houses .. 31. Current Practice of Demolition of Residential Structures Public Funding .. 33. Community Development Block Grant Program HUD .. 34. Neighborhood Stabilization Program (NSP) HUD .. 34. Hardest Hit Fund Dept. of Treasury .. 34. economic Impacts of Deconstruction vs. Demolition .. 35. Limited Use of Deconstruction .. 36. National and Global trends that may affect the economic feasibility of this sector .. 37. Oil Costs .. 37. Construction Industry and Materials 38. International Trade Laws and Regulations .. 39. CHAPTER 3: MATERIAL REUSE, REPURPOSING, AND RECYCLING .. 41. Salvaged Material Reuse .. 41. Salvaged Material Repurposing .. 41. Non-Construction Reuse of Salvaged Materials .. 41. Recycling Possibilities for Raw Materials.

9 42. Drywall and Gypsum .. 44. Siding and Vinyl .. 44. Framing wood/exterior painting wood .. 44. Asphalt Shingles .. 45. Concrete .. 46. Workforce opportunities in deconstruction/material reuse .. 46. Job creation opportunity .. 46. Necessary Industrial Infrastructure .. 49. Status of Markets for Materials .. 51. International .. 51. Local and Regional .. 62. The michigan Context .. 65. Wood Pellet 65. Composite/Engineered Wood Products .. 65. Torrefied Wood .. 66. Transmaterial .. 66. 4. CHAPTER 4: COLLECTING AND TRANSPORTING SALVAGED MATERIALS .. 69. Analysis of On-Site and Off-Site Treatment & Processing .. 69. The Potential for Local Separation of Materials .. 69. great Lakes shipping Potential .. 70. Potential of Transporting Salvaged Material to a Central Processing Facility .. 70. Current Volume and Capacity of great Lakes shipping .. 71. Transportation of CDW to muskegon : shipping versus Trucks .. 74. Analysis Conclusions .. 79. Port Capacity of the great Lakes.

10 80. Outlier Ports .. 82. Potential Upstream Obstacles .. 83. CHAPTER 5: FINDINGS AND RECOMMENDATIONS .. 85. Policy recommendations .. 85. Local .. 85. State .. 86. National .. 86. Summary table .. 87. feasibility of Deconstruction Cluster .. 88. Summary .. 89. Potential for reuse/repurposing and impediments .. 89. APPENDIX A: RESOURCES AND OUTREACH EFFORTS .. 91. Advisory committee .. 91. great Lakes Land Banks and Related Entities .. 92. State or National Level 93. Outreach 94. Stakeholder Interviews .. 94. Outreach Events .. 95. APPENDIX B: SURVEY OF TARGET CITIES (CASE STUDY DATA) .. 97. Appendix C: Possible Funding Sources .. 102. Financing .. 102. Venture Capital Firms .. 102. Public .. 103. Private Financing .. 104. 5. 105. Foundations .. 106. Incubation Capacity .. 108. Appendix D: References .. 109. 6. Acknowledgements Principal Authors This feasibility study was coordinated by Adrianna Jordan, AICP, and Dr. Rex LaMore, and is the result of the hard work of such talented individuals as Jacob Hite, Hafsa Khan, Lauren Ross, and Noah Strayer, as well as the guidance and expertise provided by the muskegon Advisory Committee (see Appendix A).


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