The Warehouse District is getting heated. Escalating tensions between city officials and Traverse City Tourism could lead to changes and delays in the reconstruction of the all-important Garland Street there.  

Construction on the long-planned $1.5 million redesign of Garland was set to take place this year, with the goal of converting the road to a two-way boulevard that would extend to Union Street turning toward Grandview Parkway. The reconstructed corridor is intended to be a key artery for the growing District and new Hotel Indigo.

But Traverse City Tourism (formerly the TC Convention and Visitors Bureau) has yet to approve a property swap needed to complete the project. At a June 19 meeting, Downtown Development Authority (DDA) board members expressed frustration at what they perceived was a deliberate decision by Traverse City Tourism to withhold approval.

“We know the reason: they don’t want to pay taxes,” said DDA Board Member Rick Korndorfer. “So they’re resisting doing what we’re proposing.”

At issue is the city’s decision in August 2014 to revoke Traverse City Tourism’s tax-exempt status, a move the organization is still challenging. Mayor Michael Estes believes Traverse City Tourism is linking issues unrelated to Garland Street – including its tax-exempt status and a parking permit arrangement with the city – to the property swap. “They want us to tie all these issues together, and the city is not willing to do so,” Estes says.

Traverse City Tourism has for several years paid for six annual parking permits for its volunteers, but has received more than 100. The arrangement allows the group’s large base of volunteers to have permits for the company’s lot without having to pass them back and forth. However, the DDA recently notified Traverse City Tourism it could terminate the benefit as soon as 2016. “No other organization has this arrangement,” says Estes. “As with the tax exemption…just because you’ve had a benefit previously doesn’t mean you’re entitled to anything.”

While Traverse City Tourism President and CEO Brad Van Dommelen tells The Ticker he is reluctant to comment on ongoing city negotiations, he denies his organization is stonewalling the city on Garland Street. “The ball is in the city’s court on every single one of these issues,” he says. “We are waiting for responses and documents from the city. We have been told there will be a meeting of city heads (about the property swap)…we are waiting. We are not holding anything up.”

Van Dommelen also notes Traverse City Tourism has continued to pay its property taxes while exploring its options, and has tried to be “a good partner to the city” during negotiations by donating to programs like the city’s water-bottle filling station project and a planned Bryan Crough memorial.

Estes intends to press the organization for a decision on Garland - regardless of tax status or parking permit discussions - so the project can move forward “one way or another.” Estes says he’s asked City Manager Marty Colburn to schedule a meeting soon to make “one final request” of Traverse City Tourism to approve the property swap. At least on DDA board member has suggested pursuing the city’s right to eminent domain if Traverse City Tourism refuses, something Estes does not support.

“I’m not interested in pursuing that,” he says. “If they say no, I think we’ll have to look at the alternate” – i.e., reconstructing Garland Street on its existing layout terminating on Grandview Parkway. He also sees a likely delay. “I’m not saying it’s impossible to squeeze it in this year, but it just seems unlikely,” he says.

Meanwhile, at least one other party could soon weigh in on the proceedings. Developer Jeff Schmitz of Hotel Indigo – which, like other area hotels, will pay a levy to Traverse City Tourism once open – says he plans to meet with the organization next week.

“I have no idea what’s happening on Garland Street,” he says. “I’m at a loss for words. I get a different story each time.” While Schmitz says his hotel’s success is not contingent upon the road’s reconstruction, he hopes the project can soon get back on track.