Endowment aims to defray Grand Haven snowmelt system operating costs

The Grand Haven City Council recently launched an endowment fund to defray the cost retailers and building owners in the downtown shopping district pay for the city-owned snowmelt system.

It will take roughly 10 years for the investment fund, overseen by the Grand Haven Area Community Foundation, to make consistent withdrawals from its invested capital to ensure downtown building owners/merchants don’t take as much of a financial hit in paying for the snowmelt system’s operational costs, says Pat McGinnis, city manager for Grand Haven.
Pat McGinnis, city manager for Grand Haven
The reason for the higher costs stems from the 2020 closing and eventual razing in February 2021 of the J.B. Sims coal plant on Harbor Island. Previously, heat and water from the Grand Haven Board of Light and Power were pumped from the Sims plant to downtown through a line in the riverbed.

The coal plant has since been replaced with natural gas-fired boilers, also on Harbor Island. Prior to the 2020 and 2021 winters, five high-efficiency boilers and connections were installed in the former Sims water intake building. Now, downtown retailers and property owners pay 75% of the annual cost of the snowmelt system. The city pays 25%.

“The cost to operate the system has gone up quite considerably,” says Jeremy Swiftney, executive director of Grand Haven Main Street Downtown Development Authority (DDA). “Estimates are from double to triple what the cost was previously to operate the system. The snowmelt system (cost) has always been passed along to property owners who are using it.”
Jeremy Swiftney, executive director of Grand Haven Main Street Downtown Development Authority

More expensive, but more efficient

The gas boilers are more efficient compared with the Sims coal plant, McGinnis says.

“A number of times, they shut things down (at the coal plant) for maintenance, and we didn’t have snowmelt capacity,” he says. “Now, it’s a little more consistent and on-demand. When you need to turn it on, you can turn it on. When the snow stops or the (lake-effect) front is over, you can turn it back off and save energy. So, it’s a little more efficient and reliable.”

“We don’t want them (downtown retailers/building owners) to just foot the bill. They shouldn’t, they can’t in most cases,” says Swiftney. “They can’t afford to have their costs to go up four to five times they were paying. That’s just not a reasonable expectation for many of our building owners/business owners. We want to grow an endowment fund to where future costs may not be a concern.”

The city’s street fund and DDA collectively contributed an initial $5,000 to the endowment fund, with the goal of reaching $1 million before it can help cover the snowmelt system’s increased operational costs.

“I think that in 10 years we might build it up to a level to have a meaningful impact, but we hope to get things rolling in 2022 and get some excitement and enthusiasm going during the transition from coal power to a natural gas power energy source,” says McGinnis. 

“Our initial goal would be $1 million. The $1 million would spin off $40,000 to $50,000 a year to offset the operating costs. Our estimated annual operating cost for energy is in the $125,000 to $150,000 range,” he says. “Chances are, if we can get to 50% supported by the endowed fund, I think that would be sustainable at that point.

“Now we will start the persistent work of educating folks and bringing them along to build that capital so that someday it has an endowment presence that really sustains the future of the whole snowmelt system.”

A striking contrast

The snowmelt system was built in 2009-10 for $3 million in a three-way partnership with the Board of Light & Power, the DDA, and the city, and is being paid for via tax increment financing.

The contrast with and without the snowmelt system is striking, says Jalaine “Jill” Hutchinson, co-owner of Buffalo Bob’s, a snowboarding, longboarding, skimboarding, skateboarding, and bodyboarding retail shop on Washington Avenue in downtown Grand Haven.

Forty years ago, Hutchinson owned a women’s clothing store across the street from where her skateboard store is located. She still remembers how snow and ice thwarted shoppers from braving the slippery sidewalks. She gives the snowmelt system a thumbs up.

“Certainly for the convenience of having dry sidewalks and streets,” says Hutchinson. “It encourages shoppers and dog walkers. Dog walkers love it.”

Saving the city money

The snowmelt system’s benefits provide the reason for its costs, say McGinnis and Swiftney. Shoppers know they will not risk slipping and falling; joggers and walkers who enjoy exercising downtown in winter are also drawn to downtown, property values have gone up and the cost of salting and plowing snow has decreased.

“Prior to snowmelt, we used to go down there and plow and haul snow,” adds McGinnis. “There’s a lot of on-street parking, so I estimate around 25% of the cost of running snowmelt is actually savings for us because we’re not having to put down salt and sand that ends up in the river and don’t have to spend the staff time and equipment going down and pushing it away because, before we had snowmelt, we had to pile it up and then haul it away. 

“It’s saving us a good deal of money every year so we do contribute to it from our street fund,” he says.

“I know my mother would come here often to visit when she was still alive, and before we had the snowmelt, she would never go downtown,” adds McGinnis. “It’s treacherous in the wintertime to risk it, and after we put the snowmelt system in, she’d get her hair done, go to the card shop, grab herself some coffee and some baked goods, and go back home, and it was safe. The surfaces were not slippery. It was safer.”

“A thriving business district is definitely a recruiting tool (downtown retailers and building owners) can use to retain and recruit new talent,” says Swiftney. “It’s another feather in our cap.”

Read more articles by Paul R. Kopenkoskey.