Initial environmental studies show mercury and volatile organic compounds pollute the soil and lead and arsenic — as well as volatile organic compounds and semi-volatile organic compounds — contaminate the groundwater.

The pollutants do not impact the safety of drinking water, as the property is serviced by Alpena’s municipal water system and not a well, Alpena City Planner Montiel Birmingham said.

The added environmental expenses to the $10 million-plus project is expected to be about $1.5 million, but the developer will make that money back from the property tax break.

On Monday, the Alpena Municipal Council voted to approve a Brownfield plan, which will reimburse Alpena Eagle Ventures, LLC for money they spend on the environmental studies, plans and mitigation.

News Photo by Steve Schulwitz A sign promoting a new business and housing project sits on a vacant property in Alpena on Tuesday. On Monday, the Alpena Municipal Council granted the developers a break on its property taxes to reimburse the costs of the needed environmental work.

A Brownfield plan allows the tax capture on an eligible property to be delayed until the developer is fully reimbursed. In this case, no tax on the building or any improvements to the property will be paid to the city for 11 years and 12 years for the state’s tax capture.

Once the Brownfield plan’s terms are fulfilled, it is anticipated the owners of the property will pay about $213,000 annually in property taxes.

Currently there is no taxable value on the property, Birmingham said in her report.

The proposed project also received a nearly $5 million grant from the Michigan Strategic Fund to help cover the cost of construction. When completed, there will be about 15 two- and three-bedroom apartments on the upper floor and commercial and retail space on the ground level.

The project is expected to begin this year and be completed sometime in 2024.

Contamination on the property exceeds standards established by the Michigan Environmental, Great Lakes and Energy, the Brownfield plan shows.

Twelve soil samples were collected from the location at 400 West Chisholm St and submitted for laboratory analysis. Results of the 12 samples exhibited concentrations above EGLE’s cleanup criteria.

Eleven groundwater samples were collected and exhibited concentrations of methylnaphthalene, benzene, lead, and other residuals.

The contaminants likely stem from past uses of the land, the report says.

Alpena has utilized Brownfields to assist in projects in the past. Both Austin Brothers Beer Co. and Holiday Inn Express became realities because of the help developers received to overcome the expense of environmental challenges.

The council also approved a Brownfield plan to try to have a Fairfield Inn and Suites built downtown, but the developers scrapped the project due to rising costs and elevated interest rates.