TRAVERSE CITY — Commissioners agreed that any development on Traverse City-owned land in the downtown should have parking and below-market-rate housing.
Those are just two of the features commissioners discussed Tuesday after Mission North Principal Rob Bacigalupi asked them what they would like to see in a request for proposals for the property along State and Pine streets.
City commissioners agreed adding more housing downtown would meet a strategic action plan goal of integrating the downtown with other city neighborhoods. That’s especially if it’s aimed toward people earning 80 percent of area median income.
“There are only 100 people that live downtown, and they’re probably not there right now, they’re in Florida,” Commissioner Heather Shaw said. “So having that all-season, full-time workforce housing will make a big difference in how the rest of the neighborhoods interact with the downtown.”
Census figures seemed to show the number is more like 260, Commissioner Mitch Treadwell said. But he agreed that’s not a big difference.
And since the city bought the land in question to meet parking needs in the downtown’s west end, any future use should include parking, Treadwell said.
That was the plan before when the city and Downtown Development Authority bought parcels along West Front and Pine streets, then swapped them with Socks Construction Company-owned land along State and Pine streets, Bacigalupi said.
The DDA proposed a parking deck for the property, both before and after the swap, but eventually dropped the idea amid debate over whether to extend TIF 97, the tax-increment finance plan that would have financed the parking deck. It’s set to expire in 2027.
John Socks previously told commissioners he would build a parking ramp, apartments renting as close to the 80% area median-income rate as possible, and first-floor retail on the property fronting Pine and State streets. Two of the six floors in the 534-space ramp would be public parking. Shore North Development, which Socks founded, would lease the other four to finance construction of the development.
Commissioners eventually agreed to hear other developers’ proposals for the property after city Manager Benjamin Marentette suggested as much. He hired Bacigalupi — formerly the DDA’s executive director — for $7,140 to draft a request for development pitches.
Bacigalupi told city leaders he needed more input on what commissioners hoped to accomplish through any future use of the land, and they had plenty.
Marentette told Mayor Pro Tem Laura Ness the city could place restrictions banning short-term rentals in any future housing built there.
And Shaw said she would rather lease the property for the long term than sell it outright — Socks previously suggested either a sale or a lease for $1, to ensure the housing built there remains attainable.
Leasing the property would mean the city doesn’t have to pay back the $7-million-plus spent in parking funds to buy the land over the years. While city Treasurer and Finance Director Heidi Scheppe told City Attorney Lauren Trible-Laucht that reimbursing the fund is her strong recommendation, it’s not legally required.
Commissioner Ken Funk suggested imposing a requirement that would keep the rentals attainable — he suggested within the 80-120% area median income range — for the term of any tax abatement the city may approve. And Commissioner Lance Boehmer suggested a permanent restriction preventing any apartments from being sold off individually as condos.
Tying any restriction on rents to a tax abatement makes sense, since that would allow the owner of the apartments to sell them as a whole unit once the abatement expires, Bacigalupi said.
His next steps will be to incorporate their feedback into a request for proposals — commissioners chose this over the request for qualifications format. Commissioners tentatively could be ready to pick a proposal by June.
That should be enough time for a developer to use site assessment grant money from the state Department of Environment, Great Lakes and Energy, which expires in August.
Another time factor is the number of other developers interested in building their own parking garages in the downtown’s west end, Bacigalupi said. That could result in a piecemeal approach to meeting parking needs for new hotels, condos and other builds.
“Which could be fine, but it could potentially end up with more parking decks than we envisioned on that end of town,” he said.