Recent changes in Michigan allowing brownfield funding to be used for workforce housing could soon bring 375 new rental units online in Grand Traverse County. East Bay Township planning commissioners approved a site plan Tuesday for a 240-unit workforce apartment complex to be built on Three Mile Road, while the Grand Traverse County Brownfield Redevelopment Authority approved a brownfield plan for 135 workforce apartments to be added to the Oak Shore Commons development in Acme Township.

East Bay Township
East Bay Township planning commissioners unanimously approved plans this week for development group Krimson to build a 240-unit apartment complex on a 20-acre parcel on Three Mile Road just north of the Meadowlands Industrial Park (pictured, rendering). The project will include 10 three-story buildings with 24 units each, with apartments ranging from 647 square feet (one-bedroom) to 1,389 square feet (three-bedroom).

Planned amenities include two dog parks, carport parking, a playground, a clubhouse, a BATA bus stop, and a connected system of walking paths and picnic/grill areas. Planned road improvements to Three Mile Road this year and Hammond Road next year will provide a new turn lane for the development (and corridor) and help alleviate nearby traffic and intersection issues, staff said. Developers committed to buffering measures to help shield the new apartment complex from neighboring residences along Three Mile Road.

Krimson CEO Steve Calverley said the project is intended to provide “missing middle” housing for workers like nurses, police officers, teachers, and service industry employees. In order to provide such housing – which would be below market rate – Krimson plans to seek brownfield tax increment financing (TIF) reimbursement for the project. TIF works by capturing rising property values on the site over time to reimburse developers for expenses incurred by investing in blighted properties – or in this case building income-restricted housing, which is allowed now in Michigan under recent changes to brownfield rules. The reimbursement is intended to offset the lost revenue developers could have otherwise earned if they built market-rate housing. Calverley said while there’s “clearly a demand” for workforce housing, “it won’t pencil (financially) unless there’s some type of assistance.”

The Three Mile Road apartments will be targeted to tenants earning under 100 percent of the area median income (AMI) in Grand Traverse County. Calverley said those projected rents are $1,100 for a one-bedroom apartment, $1,400 for a two-bedroom apartment, and $1,700 for a three-bedroom apartment. Krimson is also exploring the possibility of obtaining a MI Neighborhood grant through the state and partnering with Goodwill to designate some units for permanent supportive housing. Developers approved for brownfield reimbursement are contractually obligated to maintain those workforce housing rent levels for the duration of the reimbursement. They must record and report their rents every year; if they don’t meet the requirements, their reimbursement is reduced or withheld proportionally.

While Krimson’s site plan approval gives the company the green light for construction, the development team must still separately go through the brownfield TIF approval process for funding. That will involve approvals at the East Bay Township, Grand Traverse County Brownfield Redevelopment Authority (BRA), Grand Traverse County Commission, and state levels.

Oak Shore Commons
Another local workforce housing project recently progressed through several of those brownfield approval levels. Strathmore Real Estate Group – the company behind the redevelopment of the Kmart property and the new housing complex called Oak Shore Commons in Acme Township – received township and BRA approval for a brownfield plan for the next phase of Oak Shore Commons, which will bring 135 workforce apartments to the site. While existing apartments on the property are market rate, the next phase will consist of income-restricted units: 40 studios (for tenants earning 60 percent AMI), 17 one-bedrooms (100 percent AMI), 66 two-bedrooms (90 percent AMI), and 12 three-bedrooms (100 percent AMI).

“We’re not interested in condos, we’re not interested in short-term rentals,” said Strathmore principal Jacob Chappelle at the BRA meeting. “We’re interested in housing for people who are under-served.” While a market-rate studio averages $1,384, a workforce studio will be $1,038, the company said. A workforce three-bedroom will be $2,570, meanwhile, compared to $3,108 for market rate. Rents will be reduced by $430,754 annually – or $10,768,854 over 25 years – to maintain affordability for people at 60-100 percent AMI. That range is for people making roughly $20/hour up to $33/hour, representatives said.

The brownfield plan calls for developers to be reimbursed between $11.6 million and $14.4 million over the next 25 years. That reimbursement offsets the rent revenue loss plus costs for infrastructure and improvements – including a TART Trail extension – as part of the workforce housing buildout. Representatives noted that the TIF reimbursement will only apply to the workforce housing side. The rest of the development – including the commercial areas and the market-rate apartments – will continue to be taxed normally. The brownfield plan next heads to Grand Traverse County commissioners for approval on March 19, followed by state review.