Lead to Succeed - Anne Giroux, Director of Development and Investment Services at Build U.P., and Kyle Aho, Partner at AV Rental Company

In this episode of Lead to Succeed, host Steve Arwood sits down with Anne Giroux, Director of Development and Investment Services at Build U.P., and Kyle Aho, Partner at AV Housing Solutions. The conversation explores how new tools like brownfield redevelopment, land bank partnerships, and targeted grant programs are helping drive housing projects forward in communities like Marquette. Learn how collaboration between developers, local governments, and economic development organizations is addressing one of the region’s biggest challenges – housing – and how these strategies can be expanded across the Upper Peninsula.

Learn more about InvestUP at https://www.investupmi.com. Connect with us on social media at https://www.linkedin.com/company/invest-up-mi/.

Transcript

Steve Arwood   10:41
 Welcome to Lead to Succeed, our ongoing series sponsored by InvestUP, where we talk to people who are doing great things in the up, new ideas, new projects, new plans.
 Today, a couple of people are with us. One is a new introduction to the audience, and then we're going to talk to a developer who's embarking on a new project in downtown Marquette. But first, let me welcome Anne Giroux. Anne is the newest edition of the InvestUP/Build U.P. staff. She comes to us as Director of Development and Investment Services, and you previously were the assistant administrator at Marquette County. Welcome in.

 Anne Giroux   11:30
 Thank you. Glad to be here.

 Steve Arwood   11:32
 So Anne. Explain a bit about what the vision for your new role here is with InvestUP.

 Anne Giroux   11:43
 Sure. So I think that really the focus is on providing capacity to communities that are struggling with development challenges, right? And so that can be anything from Brownfield development, properties owned by land bank authorities, and certainly I would throw housing into the challenging pile in that it's really hard to put housing deals together for a variety of reasons. And so really the focus of this new, what I'll call a service being offered through Build U.P./InvestUP is to provide that capacity to Upper Peninsula communities that want to see development happen. And that really kind of comes from my background in Brownfield and land bank work, even though my real job for 25 years has been local development finance.
 And through my role as County Treasurer, I spent about 15 years building up the Marquette County brownfield and land bank authorities and hoping to use that experience to help other communities in the UP.

 Steve Arwood   12:56
 Great, Kyle Aho, partner of AV rental. You've got an exciting new project breaking ground on Baraga Street in downtown Marquette. Tell us a little bit about it.

 Kyle Aho   13:10
 Yes, thank you for having me. I'm excited to be here with both of you. It is a new beginning for us. We've been in project renovation since 2011. Since the inception of our organization. So this is very exciting and this would not have been possible without the connections, specifically with the connections of the land bank. This was a conversation that began, I believe, in June of 2023, when Anne and her assistant Antonio brought up why hadn't we built on these two vacant multi-family lots sitting in downtown Marquette, and for a whole host.

 Steve Arwood   13:41
 And those lots were already in a land bank, right?.

 Kyle Aho   13:46
 They were privately owned. I'm sorry. Yes. Yeah, those were privately owned, and I should have shared that part. So we had purchased this three-parcel portfolio in downtown Marquette, two of them being vacant parcels. The land bank recognized the opportunity there because the zoning was ideal in the lot was ideal, and then we had an experience in rental property management. And so it came together. So we just broke ground yesterday, very excited.

 Steve Arwood   14:14
 So Anne, kind of walk us through how you worked with Kyle on this because it sounds to me like some of this is using some of the new tools of you know the land bank and combined with some Brownfield activity, a lot of it's new to people, especially the developers. So maybe you give us a little, you know, history on how this deal got put together.

 Anne Giroux   14:38
 Yeah. So this particular project, as Kyle mentioned, was already owned by them privately.
 They didn't have, I would say. I guess I would go out on a limb, Kyle, to say that, as you mentioned, most of your work was on rehab. Not really new construction. So my neighborhood is a new program being offered by the Michigan State Housing Development Authority right now, and there are opportunities to apply for grant funding to support new construction.
 The way that the program is structured is that you can access certain dollar amounts based on your experience with grants. Well, most of our small emerging developers don't have a ton of experience with grants, but the land bank has a ton of experience with grants. So by partnering with AV, the land bank actually applied for the funding and AV will be doing all the development, a joint development agreement was established to basically access that higher level of funding for their project, and I think the key point in this, and I want to give credit where credit is due, Marquette County is in a really unique position through a grant with the Office of Rural Prosperity that we were able. To fund a housing specialist. So that capacity to do this work. And make these connections and apply for this. Funding was created through that housing specialist position, which is Antonio Adon in our office. Without that capacity, I'm not sure that these stars could have aligned to make this project happen, and I think that's kind of the key point and what we're trying to create throughout the rest of the UP is through my position providing that capacity to developers, banks, and communities to be able to do these kinds of projects.

 Steve Arwood   16:35
 Thanks. So I've seen the renderings. Tell us a little bit about your duplexes. I mean, they're very attractive. They're pointed at a price point. Give us a little flavor of what you're doing because it is a little unique downtown.

 Kyle Aho   16:56
 There were a couple factors that we had to measure and that was the lot size, specifically how close it was, especially the 412 Baraga lot sits with an adjacent single-family home that we own and operate as a rental property. So this may sound a little naive. We looked for the most simplistic design that would provide quality, and it would fit in downtown as a modern approach. But the most simplistic design that would fit the lot size, the lot size and the parking requirements of the city were more of the challenge than the build itself,  I would sa.y I know we're just embarking on it. But the number that really mattered to us was how could we keep this as affordable as possible? What was our price to build, and what was that price per square foot, trying to keep our design simplistic? Trying to keep it within our wheelhouse of understanding and I think we've achieved all of those pieces.

 Steve Arwood   17:47
 Great. So how did you find out about the land bank?I mean how did you connect on this because one of the things is obviously a success story with Anne on board now with InvestUP,  to build when we find developers who are interested in doing these types of things, we now have Anne as a great asset where we can get together and say, OK.
 How do we use all these different tools? But did she find you? You found her?
 How did that happen?

 Anne Giroux   18:19
 Do you remember? I don't remember.

 Kyle Aho   18:21
 I do.

 Anne Giroux   18:21
 OK, good.

 Kyle Aho   18:21
 I do, because I think this is a funny part of the story. So Anne and I had loosely known each other. We had similar I guess similar acquaintances, especially in the accounting space.
 We had been told that we need to meet each other because of our work, probably parallel to each other. Quite a few different times. AV Rental company, specifically AV Housing Solutions, had redeveloped about 30 places per year of vacant spaces across the county for the last. Five years and so this introduction happens where Anne says, hey, we have this new guy to help. Basically helps as a catalyst to the housing developmen,t and in my mind, I'm thinking like a lot of people inside of their businesses. I don't know that I have time to meet with this person and I don't know how this could move us forward. It sounds so naive, but I recall Ann calling this meeting and this was now two years ago, two years ago in June, thinking where could I go? This possibly goes because we're up to our necks in project sites. So the meeting went very well. It took quite a while before we were before we began to discuss the new build component. Most of the conversation revolved around how can we increase our capacity to redevelop vacant housing. That's been our Forte. That's kind of been our MO as we fix the worst property on the block. And Antonio brought up the idea of, hey, why don't we go after these vacant lots? And he had done the homework himself and identifying quite a few of the vacant, if not every vacant lot, that was buildable inside Marquette city. So it was a very interesting introduction, and it went well from there.

 Steve Arwood   19:58
 Great. So, Anne, as you look at your new role? And now you're a 15 county resource, not just Marquette County. Marquette County's doing some great things. We have other communities that are, you know, as you mentioned, you know they have capacity issues. You know there's one or maybe no one who is doing kinda like the day economic development tries to coordinate all this. These are complicated programs. You gotta start early. You know there's several paths you can end up going down. How do you see if a local Edo from one of our counties or one of our other cities says, you know, we really need help thinking this through because we want to create something like what Kyle has done or we want a Kyle to come and create something for us. How do you see that communication, that discussion taking place from your seat.

 Anne Giroux   21:05
 Well, I mean, for starters, they should call me. You know, one of the things that we're really trying to do here initially that I'm trying to do is reach out to as many people as I can within the various EDOs,local government, I’m meeting up with the UP city managers later this month.
 The UP County commissioners this week, hoping to get together with the UP county treasurers.
 There's a bunch of different groups I'm hoping to reach out to. Kind of find out who's craving this? This assistance, and that's where we'll start. So frankly, the phone calls are going to force that conversation to happen. But also just, you know, as developers are coming into their offices and they have these ideas and these visions and things and they just don't want to, they just don't know how to. Get started. Those are, I think the most powerful and best conversations to be having, and sometimes it takes four or five of those conversations to really get to the point where brownfield clicks and clicks in your head and makes a lot of sense.
 But you know, to your point, Steve, the tools are complicated. They're changing all the time.
 It's a lot for whether you're an EDO professional or a county treasurer or a municipal manager or supervisor, or a developer. They all have jobs that they're 100% focused on and just don't have a lot of extra time to keep up on this stuff.

 Steve Arwood   22:42
 Yeah.

 Anne Giroux   22:43
 And that's really where we're hoping to kind of fill that void. I can keep up on that stuff and know what's going on and bring those tools to them and see what fits and makes the most sense.

 Steve Arwood   22:55
 Yeah, I mean you have and I have get those calls and say I'm looking, I read about being able to use a brownfield tip for housing.I live in this community. How do I go about it? My response is that you even have a brownfield authority?

 Anne Giroux   23:14
 Yes.

 Steve Arwood   23:15
 I mean, do you even have a local government, you know, authority to even do this? In many cases, you gotta go way back. Some cases you know are more interesting, or at least more mature I guess. But so Kyle. Would you go this route again? Would you utilize these programs again? How was it? How did it all work out for you?

 Kyle Aho   23:45
 Yes, I believe that we absolutely would. I believe the relationships have been established that make it a little bit easier in the communication. I think as for the new build specific sector that'll be yet to be determined. I'll circle back to that conversation in October. If we meet the budget and timeline, I would say absolutely we would go down this road again and we're excited to. I think the biggest challenge we face is statewide. This might even be the United States. There is a labor shortage that makes it very challenging to produce at A at a price that's affordable and that continues to be my biggest question, I'm like, OK, what are we doing at an economic scale to be able to produce more workforce? So, a long answer to a short question. Yes, I would. I would love to team up again with InvestUP. It was very seamless. It was made very easy to walk through and navigate the process, and the land bank was terrific. As a partner, we would be excited to do this again.

 Steve Arwood   24:41
 Looking ahead.I mean, you know, you're in it day-to-day, you're buying materials, you pay for labor, you're watching your costs. Now we have, you know, tariffs. You know that whole conversation interest rates really haven't moved to what a lot of people thought they might at this point in time. And then you mentioned that the labor shortage project still has a hard time. I'm really having a hard time to pencil it out. Is that a continuing concern of yours? Do you see some relief from this? How do you view it over the next year or so if you could crystal ball what you think is going on in this market?

 Kyle Aho   25:24
 Yeah, great question. I think it's very challenging to predict. I think that we remain very conservative that interest rates won't fluctuate off the historical average. I think that anybody that anticipates that is maybe very wishful in thinking that, hey, we're going to see three, 4% again at. A certain day in point, I believe that day has passed. As for the labor shortage, I don't believe we can fix this in a year, especially up here in the Upper Peninsula.

 Steve Arwood   25:46
 Mm hmm.

 Kyle Aho   25:47
 We don't have the migrant work we don't have, we don't have the immigrant work.
 Honestly, if I speak very frankly to the differences in price of construction in Grand Rapids.
 In Detroit and Lansing and comparative to Marquette County. And then even worse comparatively to, let's say, the labor force in the state of Texas or the state of Arizona.
 And so I think in a very short window, at least our company and our organization has been in house and DIY almost everything. So we run a construction renovation division, and that has allowed us to remain what I would say competitive to be affordable.

 Steve Arwood   26:20
 Mm hmm.

 Kyle Aho   26:20
 Our price of renovation, our price of rehab and redevelopment is at like 77 a square, which we know is not achievable in the new space or the new build space. So, from a one-year window, it would be to exhaust any potential project site that's possible to resurrect and then use the lowest barrier of entry into the new build sector. I think that adjacent land or land that's already purchased may be wrapped up in another deal or wrapped up in a multi-parcel purchase makes the most sense because your land acquisition is next to 0. And then using some of those, some of the strategies of the joint venture between us and the land banker, or the joint venture with us at InvestUP, and all of these pieces had come together for this project, to be possible, we wouldn't have moved forward speaking very frankly.

 Steve Arwood   27:08
 Yeah.Everyone of these projects I look at on the new build side, it costs just as much to build in Marquette as it does Grand Rapids. It is just, just and in some cases it's a little bit more.
 There's, you know, people think well, you know, how can it be this expensive? It's the Upper Peninsula. Well, you know, interest rates are the same. You know, you mentioned the labor shortage, materials and supplies. Those are, you know, those don't go down because you go in a, you know, into a rural area and some places they actually go up because of, you know, distribution methods so well, it sounds like you've thought ahead. And it sounds like a pretty good strategy if you. Got any other thoughts? Any other places you're looking to develop or is that a closely held secret?

 Kyle Aho   28:05
 Not not at all. I think that I'll share some advice that I received from a developer that was way ahead in his career and has done it in a bunch of different locations. He cautioned me and the organization a few years ago about splitting our competitive advantage, our bandwidth into multiple counties, I really like Marquette County. I like the demographic. I like the variety in the workforce. I don't know that I would be as eager to move outside because I can't control the workforce or we don't have the availability of the workforce that we do here in Marquette County. Our relationship with our subcontractors, we've got close to 12 in-house construction, renovation on our own team, just on the construction division.
 So we would lose a competitive advantage if we moved outside of this market. My business partner Caleb is from Grand Rapids. It's done very well over the last several years. We've looked at that market several different times. And each time we've come back, as soon as we do it, although it's the same business. It's like starting over and especially in the property management or in the rental property management space.
 So we will double down on Marquette County, where I say that with my fingers crossed that something catastrophic doesn't happen right and that's the Black Swan event that we all fear for, for everybody here in Marquette County, we're all dependent on each other, the.

 Steve Arwood   29:23
 Yeah, it is.

 Kyle Aho   29:24
 University. The mining of all of those sectors and and are very important to each other.

 Steve Arwood   29:29
 Yeah, great.
 Ann, final thoughts from you as you embark on your journey.

 Anne Giroux   29:37
 Yeah, I guess the only other thing.

 Steve Arwood   29:38
 To help build to help build capacity and bring these kinds of developments to other communities.

 Anne Giroux   29:45
 Yeah. The one thing that I was just thinking of is I was listening to Kyle talk and I was very excited that you invited Kyle to be on the program because I think his company is a really good example of a local emerging.
 Developer that.
 Folks have been able to invest in to really make a difference here in a community, they're not.
 They're not doing, you know, 100 unit developments. It might be a small to mid size development for a time, but I think growing them locally.
 It is very important in that way, and one of the things that the Marquette County housing specialist has been able to do kind of with medc's support is gather these emerging developers together on a regular basis to network and connect.
 And I've seen so much magic happening at those emerging developer meetings where those connections and networks are being made.
 Know when he referenced his local network and how that's supporting his work in Marquette County.
 I'd love to see that effort replicated throughout the up to really bring those local folks in those communities together.
 Learn about the tools.
 Learn about the incentives and put these projects together.

 Steve Arwood   30:58
 You know.
 You know that's an important point because I think.
 When I deal with the build fund, a lot of people think that I've got to work on some scale and that we're really about, you know, big projects. Well, when you think about the big projects that happen in the up, you can put them on one hand, you.
 Know when you think about big, you know, scale.
 My response has always been to look, scale is what is studying the community.
 If you know you put 100 units in Marquette.
 Yes, that's important. That's really important.
 Put 6 units in Gwen, and that's just as important. You know, to the need and to the you know what the community you know is looking for and what the development community can handle. So you know scale is relevant, you know and I hope that.
 We are able to, as you said, Anne, get a little deeper down into the development community and get more involved with some of these projects because they are very important.
 So I thank you both, and I will certainly be working with you as we move ahead. And Kyle, congratulations. I look forward to seeing that come out of the ground. As a matter of fact, I'm going to be up there in a couple of days, and maybe it's only a hole to look at, but I'll drive by and take a look.

 Kyle Aho   32:24
 Very cool. Thank you again.

 Steve Arwood   32:25
 Best of luck to you and your company. Thank you.

 Kyle Aho   32:27
 Yes, thank you very much. Thanks for having us.

 Anne Giroux   32:31
 Thanks for having me, Steve.