Lot O, Downtown Projects, Slabtown Courts, Strategic Objectives on City Agenda

A proposal from HomeStretch to redevelop a Traverse City parking lot at the corner of State and Cass streets into a mixed-use development is facing funding struggles, prompting city commissioners to consider next steps. Commissioners – who will meet Tuesday instead of Monday due to Martin Luther King Jr. Day – will discuss Lot O as part of a busy agenda that includes several downtown projects, new Slabtown pickleball and tennis courts, and approval of key objectives from the city’s recently adopted strategic action plan.

Lot O
Local nonprofit HomeStretch is facing a January 31 deadline to close on its purchase of the city-owned Lot O at the corner of State and Cass streets. In a memo to commissioners, City Manager Benjamin Marentette said HomeStretch has not been able to “secure the necessary financing” for the project and will miss that deadline, requiring a commission decision on how to proceed.

Commissioners approved a deal in 2023 for HomeStretch to acquire the city parking lot next to The Omelette Shoppe. The commission selected HomeStretch as the next owner after going through a request-for-proposals (RFP) process to solicit bids for the site. HomeStretch plans to build a mixed-use development with 44 income-restricted apartments on the upper floors and a 4,000-square-foot market on the ground floor (pictured, rendering). Apartment rental rates are estimated to start at $432.

Offering those below-market rents requires HomeStretch to secure competitive funding through the Michigan State Housing Development Authority (MSHDA). The organization has not yet been successful in its funding applications. HomeStretch received a lower grade in review because the city’s RFP is now several years old, with state criteria requiring a more recent RFP attached to the project, HomeStretch told Marentette.

“They are requesting that the city issue a new RFP where they could submit a proposal to the city, with the ‘fresher/more current’ RFP potentially positioning them for better success with State of Michigan funding,” Marentette wrote to commissioners.

HomeStretch missed its initial funding deadline with the city last May, with commissioners subsequently voting to extend the deadline to the end of this month. In a phone call last week with HomeStretch Executive Director Jon Stimson, Marentette said he “acknowledged the elephant in the room: that HomeStretch has been trying for a few years to make their proposed project viable and bring it to fruition, but hasn't been able to.” Accordingly, Marentette said that if the commission “wishes to continue exploring the development of Lot O, my recommendation would be to reissue an RFP and see who responds, and then evaluate any proposal HomeStretch would submit against others – all while retaining the right to reject all bids and not move forward with anything.”

Marentette said commissioners have a few options, including doing nothing – letting the deal expire and keeping Lot O as is for now. Commissioners could also issue the new RFP, which Marentette said “could contain essentially the same elements or be reimagined.” Commissioners could give feedback Tuesday on what the RFP would look like, with staff then returning at a future meeting with a formal document for approval. Should commissioners go that route, Marentette pointed out that if “proposals are submitted, the commission has ultimate authority to reject any/all proposals,” adding that “reissuing an RFP does not, of course, guarantee actual development.”

Also on Tuesday’s agenda…
> Commissioners will approve several contracts related to downtown projects. The first is amending a contract with Team Elmer’s for a project to abate and demolish two properties at 120 and 122 West State Street. The original plan was to use the properties – previously intended for a stalled downtown parking deck – to expand the adjacent surface parking Lot P. However, commissioners this month approved issuing a request-for-qualifications to solicit development proposals for the properties held for the potential parking deck. Therefore, the city will defer paving the State Street sites after the buildings are demolished. Commissioners will approve changing the contract with Team Elmer’s to instead do topsoil placement and turf restoration “to protect and stabilize the property during the interim period,” according to Parking and Mobility Director Nicole VanNess.

The Traverse City Fire Department is expected to use the properties for training activities the week of January 26 prior to demolition. Demolition is then planned the week of February 2. The sidewalk on the north side of the 100 block of West State Street will be closed beginning January 19, while the alley between the 100 block of West Front Street and West State Street will be reduced to a single lane in the daytime during demolition. Sixteen parking spaces in Lot P will be unavailable starting January 19, while Lot W will close starting the week of January 26 until the project is complete.

Also downtown, commissioners will vote to approval a not-to-exceed $171,527 contract with Wade Trim to perform structural inspections and offer recommendations for improvements to – or removal of – the Boardman/Ottaway River retaining wall in the 100 block alley of Front Street. The commission will also vote to approve a $50,000 contract with Restore Consulting LLC for engineering services for planned repairs to both city parking decks.

> Commissioners Tuesday will consider approving a not-to-exceed $71,047 contract with Troyer Group for design engineering services and construction management for new pickleball and tennis courts at Slabtown Corner Park. According to Parks and Recreation Superintendent Michelle Hunt, the existing courts have reached the end of their useful life. “City staff has made numerous repairs over the years, but due to the courts’ age and underlying structural issues, continued repairs are no longer effective,” she wrote to commissioners. “The most practical and cost-effective solution is full reconstruction.”

The project will involve “demolishing the existing courts and fencing and constructing new courts in their place,” Hunt said. “The goal is to create a facility with a longer lifespan, reduced long-term maintenance needs, and a more consistent, enjoyable playing surface…given the high level of use these courts receive and the city’s desire to minimize future maintenance costs, staff will work closely with the consultant to design a cost-effective, state-of-the-art facility” she wrote. The new courts, which were on the list of park projects approved by voters in November for Brown Bridge Trust Fund dollars, are expected to be complete by late fall.

> Finally, commissioners Tuesday will consider approving a set of objectives and key results (OKRs) from the city’s strategic action plan. The list converts priorities in the plan into “clear, measurable outcomes for city decision-making, resource allocation, and organizational performance,” according to Marentette. Examples of OKRs range from increasing city representation in key regional groups to expanding local childcare options to focusing on building the year-round population in core neighborhoods. If commissioners concur with the list, Marentette will work with staff to develop proposed prioritization and timelines for OKRs, as well as budget recommendations.