Traverse City News and Events

$10M Development Proposed For Eighth Street

April 24, 2017

A proposed new $10 million development could bring 60,000 square feet of retail, office and residential space, three new public kayak launches and a second Higher Grounds café location to Eighth Street in Traverse City.

Developer Joe Sarafa – operating under Envision Eighth Street LLC – will present a brownfield application for the project to the Grand Traverse County Brownfield Redevelopment Authority (BRA) on Wednesday at 8am at the Governmental Center. Sarafa has a purchase agreement on 400, 408, 414 and 416 East Eighth Street – currently home to a commercial office building and adjacent parking lot – on the south side of the Eighth Street and Boardman Avenue intersection.

Project plans call for a two-phase development that could break ground as soon as August. Phase one includes construction of a 24,000 square-foot, three-story building in the vacant parking lot, featuring retail on the ground floor, commercial on the second floor, and residential on the third floor. A proposed lease agreement with HomeStretch would commit all 12 residential units to workforce housing. The building – serviced by 19 underground parking spaces – could be completed by mid-2018.

A second phase of development is proposed to break ground in 2020, with an estimated summer 2021 completion date. That project involves demolishing the existing office building and constructing a new 36,000 square-foot, three-story building in its place. As with phase one, the building would offer retail, commercial and residential space, with a total of 18 planned apartments to be rented “at market rate or less, with a focus on smaller affordable units.” The project would be serviced by 28 underground parking spaces.

Envision Eighth Street LLC also plans to build two “north-south pathways between Eighth Street and the Boardman River…to provide direct public access to the river,” as well as three public kayak/canoe launches on the property. The Watershed Center and SEEDS are listed as collaborative partners to “ensure that thoughtful, sustainable design solutions are included in the development,” including a low-impact stormwater management system and energy-efficient building designs.

Sarafa credits Higher Grounds Trading Company Director Chris Treter with bringing the property to his attention with the vision of opening a second Higher Grounds location within a community-focused development site anchoring the Eighth Street corridor. “He’s an important part of this project,” Sarafa says. Treter tells The Ticker that while he plans to continue operating Higher Grounds’ current café at The Village at Grand Traverse Commons, he hopes to open a second café and relocate his roasting operations to the new development.

“We’re willing to be the anchor tenant for this vision,” says Treter, who has an option to buy into the LLC. “We’re excited about the opportunity, as long as the community and partners can come together to ensure it’s a sustainable development for the future of Traverse City that cares for our workforce, the natural environment and the public stakeholders.”

The development is contingent on a public-private partnership that includes a requested $2.7 million in brownfield reimbursement, with eligible activities including lead and asbestos abatement, demolition, site preparation and infrastructure. Approximately $705,000 of reimbursement would cover underground parking costs at the site.

Grand Traverse County Director of Community Development and Codes Jean Derenzy says both state brownfield laws and local BRA rules were recently amended to include multi-level and underground parking as an eligible brownfield expense. The inclusion was made to reduce surface parking lots and maximize community tax base by ensuring properties are “developed to (their) highest and best use,” according to Derenzy.

“In this project, providing underground parking provides 60 percent more future tax revenues,” says Derenzy. “If surface parking was only available, the development space would be limited to approximately 30,000 square feet” – half of the project’s proposed size.

Derenzy says BRA members must weigh the public benefits of a proposed project and its compatibility with the city’s master plan against requested brownfield incentives. In a memo to the BRA board, Derenzy cited components of the project including “workforce housing, increased access and reduced stormwater discharge to the Boardman River, and providing for Eighth Street improvements” in her recommendation of support for the application, saying the project meets the city’s master, corridors and Eighth Street reconstruction plans.

“The proposed project is located at a strategic and highly visible intersection of this important corridor….that will provide the anchor for future Eighth Street development,” Derenzy wrote. According to Derenzy, Sarafa has agreed to provide the city with an easement for the future extension of the Boardman River riverwalk, as well as 600 square feet of easement along Eighth Street to accommodate the corridor’s new streetscape design. Project plans also call for closing two of the property’s three curb cuts, an identified priority along Eighth Street.

Captured taxes through the brownfield plan will also fund two public improvement projects, including $600,000 for future riverwalk construction and a portion of Eighth Street's reconstruction costs. The exact figure for reconstruction costs “is still being worked on” by staff but will be included in the final brownfield plan, says Derenzy.

BRA members will consider approving Sarafa’s application Wednesday – a conceptual first step that does not guarantee project approval or brownfield funding. The meeting allows for “comments and suggestions,” says Derenzy, before developers return with an official brownfield plan detailing finalized financial figures for approval. That brownfield plan must go through the BRA, city and county commissions, and state in order for funding to be approved and the project to proceed.

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