Traverse City commissioners expressed interest Monday night in proceeding with a payment-in-lieu-of-taxes (PILOT) agreement with The Woda Group for a senior housing development in the Depot neighborhood near Eighth Street and Railroad Avenue.

Craig Patterson of The Woda Group presented details about the project, tentatively called Depot Commons, at the commission's study session. Patterson said the development would bring 60 units - 21 one-bedroom and 39 two-bedroom - within a five-story building on a one-acre parcel that would be targeted to "low to moderate income seniors who need affordable housing in the city of Traverse City." Patterson is seeking a PILOT agreement that would allow him to pay six percent of annual rental income from the property to local taxing jurisdictions rather than traditional tax rates, plus a $12,000 annual payment to the city for municipal services. The value of the six-percent PILOT - which Patterson needs in order to qualify for Michigan State Housing Development Authority (MSHDA) funding - is estimated at $18,200 annually with 100 percent occupancy. The development would have 60 parking spaces as well as energy-efficient amenities that would qualify the project for Enterprise Green Communities certification.

Patterson noted that units would be rented to individuals exclusively over the age of 55 who met income guidelines set by MSHDA, with the potential exception of qualifying individuals with disabilities under the age of 55. Patterson said The Woda Group would pledge to to maintain affordable rental rates at the development for at least 45 years, a convenant that would run with the deed on the property.

Patterson is seeking city approval for the PILOT agreement this month so he can meet an October 1 application deadline for MSHDA funding. Commissioners agreed to put the item on the agenda for possible action at their September 21 meeting and expressed interest in moving ahead with the agreement. However, several commissioners requested city staff to bring additional information to the September 21 for further discussion, including a comparison of traditional taxes for the development versus a PILOT and an analysis of how the housing development will fit in with neighboring Habitat for Humanity and HomeStretch projects as well as overall redevelopment plans for the Eighth Street corridor.

Pictured above: Proposed site of the Depot Commons on Railroad Avenue.