April 17, 2024

A Clearer Picture

By Stephen Tuttle | March 9, 2024

It shouldn't have been a surprise to those paying attention. Lack of public support and under-utilization of already existing parking decks have doomed the third downtown Traverse City parking deck plans, at least temporarily.

Downsizing the number of parking spaces was the first strong hint that the parking deck was unlikely to be viable, but when the intended purpose of the structure changed, the obituary was already being written. First it was the amorphous “multi-purpose” building, then housing and retail in addition to parking. Now, just housing and retail.

The city and the Downtown Development Authority (DDA) are left with a pricey piece of property and a vague plan to create “attainable housing.” They should think hard before they become first developers, then landlords with all its attendant headaches.

A wiser path might be to swallow hard and re-sell the property to one or more private sector developers who do this sort of thing for a living. No doubt they will need subsidies aplenty—PILOT and brownfield funds leap to mind immediately—but there are advantages. Perhaps multiple developers could create multiple designs and structures rather than another monolithic, nondescript cube of condos. Taught strings could be attached so the projects benefit the city but allow the developers to make a fair profit.

If the city owns the property, the tax revenues will be nothing. Even with plentiful tax breaks, private sector owners would still add some tax money to the coffers of both the DDA and the city while avoiding the need to create another city bureaucracy to deal with their expanding housing inventory.

(And, please, allow them to provide sufficient parking for residents and customers. We don’t need hundreds of new residences only to be told there is insufficient parking so we need another deck after all.)

This does remove a rather heavy anchor dragging down the DDA’s efforts to extend the TIF 97 tax increment financing mechanism currently scheduled to expire in 2027. At the same time, eliminating the parking structure component might mean the DDA needs less money going forward and can do without another 30-year TIF.

The DDA still has a pretty robust wish list, including $7 million for Rotary Square, $15 million for heated sidewalks downtown, and $57 million for the lower Boardman/Ottaway upgrades and beautification projects.

We might want to wait another couple seasons before heating sidewalks. We should make sure this year was anomalous and not the new winter norm, because no snow pretty much mitigates the need for that $15 million expenditure. Even if winter returns to normal, that is quite the expense and would be yet another season of something torn up. After a year of having a hard time getting into downtown Traverse City, we then propose to make it difficult for people to get into the downtown stores. It would be a nice luxury in a typical winter, but maybe one we should wait to consider.

It’s not clear how they are going to spend $7 million on Rotary Square since it should mostly be left as an open space. To me, that sounds like the kind of expense that results in concrete slabs and structures where they aren’t really needed.

The Boardman/Ottaway project, though very expensive, is both the most necessary and has the most positive, long-term potential. A large sewer line running along the south bank must be replaced, as must the crumbling retaining wall. There will likely not be a more advantageous time to revitalize the backside of those two downtown blocks. Building owners have tried to put their best face backward, but the alley is more of an eyesore than an eye catcher.

We won’t be able to completely restore the area to what nature originally created; that would require moving all of downtown about a block south. But on the banks of what we once used as a sewer and waste dump, we can create something that restores at least some riparian habitat, better protects the river, and creates an asset our grandchildren and their grandchildren can enjoy.

There is one little bit of misdirection we’re hearing from the TIF extension advocates: the notion Traverse City will “lose $1.7 million” if TIF 97 isn’t extended and taxpayers will have to make up the difference. That’s not necessarily the case.

That captured TIF money was dedicated for downtown and would have never seen any other part of Traverse City. And the $1.7 million isn’t lost, it would simply be returned to the entities from which it was captured—Traverse City, Grand Traverse County, Northwestern Michigan College, BATA, and the Traverse Area Library District. It’s quite likely Traverse City will require no tax increases; both Traverse City and the DDA will live just fine with the existing tax rates.

We’re getting a clearer picture of the DDA’s vision for downtown. We’ll see soon enough if Traverse City voters share that vision.


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