Traverse City commissioners Tuesday approved changing the city’s zoning ordinance to ban short-term rentals on the first floor of downtown buildings and approved expanding the city’s smart parking meter program, with an estimated 351 on-street meters throughout downtown to be replaced with smart meters.

Commissioners voted 5-1 – with Commissioner Mitch Treadwell opposed and Commissioner Mark Wilson absent – to approve changing city zoning rules for the first floors of buildings in the C-4 district, which encompasses most of the downtown commercial core. The new rules ban short-term vacation rentals on the first floor, and stipulate that the first 30 feet of a building’s first-floor interior space can’t be used for parking, storage, or utilities. Commissioners also approved eliminating a current exception that states residential-only buildings don’t need to meet the minimum 50 percent window transparency requirement on the first floor, as well as an exception that states residential-only buildings don’t need to meet the minimum 14-foot height requirement on the first floor.

City Planning Director Shawn Winter said those last two changes will ensure that residential buildings downtown are designed in such a way that they can also accomodate commercial uses, preserving a range of first-floor options. All of the rule changes, which were recommended for approval by the planning commission after extensive review last fall and winter, are designed to create an “engaging street-level experience” downtown, Winter said. City leaders are concerned about “dead spaces” emerging downtown where building spaces closest to the sidewalk have been converted from restaurant and retail uses to offices, parking, or vacation rentals that lack public interactivity and engagement. Winter previously cited as examples of the trend the conversion of two former popular downtown restaurants – Georgina’s on Front Street and Bistro Foufou on Cass Street – into an office space and a short-term vacation rental, respectively.

An initial draft of the proposal called for restricting first floors to a limited number of uses, with uses like office space eliminated. However, planning commissioners took out those restrictions after receiving strenuous pushback from property owners, who asked for more flexibility in the current economy to avoid being stuck with empty first floors downtown. Traverse City Downtown Development Authority (DDA) CEO Jean Derenzy said her organization was “very much in support” of the final proposal, which still bans short-term rentals on the first floor and includes other provisions to encourage a mix of commercial uses. Treadwell voted ‘no’ on the proposal because he preferred the initial draft and believed that more restrictions on first-floor uses would encourage property owners to build up or out on their property, leading to more infill development downtown.

City commissioners Tuesday also approved moving ahead with “phase two” of a program to convert on-street parking meters to smart meters. Phase one kicked off in 2021 and involved replacing 297 meters in premium parking zones such as Front, Union, Cass, Park, and State streets. The new smart meters use sensors to gauge real-time usage of spots, zero out meters after cars leave spaces, better manage overtime parking, and allow drivers to use credit cards and reloadable smart cards to pay for parking time. Moving into phase two “would replace most of the remaining on-street meters in the downtown area,” according to DDA Transportation Mobility Director Nicole VanNess, including on the far eastern and western stretches of Front Street, Lake Avenue, south Union and Cass streets, Pine and State streets, and the Warehouse District area including Hall and Garland streets.

Commissioners approved a purchase order with vendor CivicSmart not to exceed $100,000 to replace approximately 351 meters for phase two, as well as an annual $48,000 contract for software and communication fees. The smart meters allow drivers to pay with both coins and credit cards at parking spaces and will also integrate with the city’s current parking app, Parkmobile, to display paid time on meters. Smart meters are intended to assist the DDA with one of its main parking focuses that came out of its 2017 transportation demand management (TDM) study, which provided recommendations for parking goals and solutions downtown: data collection. Sensors allow for collecting real-time occupancy data, according to VanNess, as well as real-time usage in the Parkmobile application. That data could eventually be used to set parking rates and maximum times based on demand, as well as inform decision-making on things like whether to extend meter enforcement hours.