Owners of blighted or obsolete buildings in Traverse City could soon receive tax benefits for redeveloping them under a program up for consideration by city commissioners tonight (Monday).

Commissioners will consider a policy that would allow the Obsolete Property Rehabilitation Act (OPRA) to operate in Traverse City. The state program has been in place since 2000 and offers a tax incentive to “assist in the redevelopment of older buildings in which a facility is contaminated, blighted, or functionally obsolete,” according to program documents. Eligible projects – which must result in a commercial or mixed-use building – could have their taxable values frozen for up to 12 years, providing owners a considerable savings on property taxes. “By freezing the taxable value, it provides an incentive for the developer to make significant improvements to a building without increasing the property taxes on the building,” documents state.

While offered by the state to qualifying communities – including Traverse City – for nearly two decades, city officials until now have never adopted a process for local applications to be considered. That changed recently when Catalyst Development – the company that purchased the Old City Hall building on Cass Street and is completing a total renovation of the building (pictured) – inquired about the OPRA program, according to Downtown Development Authority (DDA) CEO Jean Derenzy. Without a process in place to apply for the program, the development group moved ahead without it – but their request prompted Derenzy to recommend city commissioners put a process in place to allow future requests to be considered.

“Even though it’s available at the state level, locally we should have a policy to let anyone interested in this to have a procedure in place to follow,” says Derenzy.

The city’s proposed policy spells out eligibility requirements for property owners – including having a commercial or commercial housing property that is blighted, obsolete, or a “facility” (ie environmentally contaminated), having a legal interest in or purchase agreement for the site, and not being delinquent in any taxes or financial obligations to the city. Only projects initiated after the policy’s adoption can be considered, and applicants will have to pay a to-be-determined fee to the city when applying for the program. Requests are subject to both local and state approval, and city commissioners will receive an annual report summarizing the number of projects approved, estimated amount of property taxes abated and paid, and projected job and investment data from OPRA sites.

Derenzy says the program is “another tool in the economic toolbox” to encourage development and job growth in Traverse City. “Any kind of tools to help with job creation make sense,” she says. “You need as many options as you can to (encourage) different opportunities.”

Also at tonight’s city commission meeting….
> Commissioners will consider approving a recommendation from the planning commission to add “hospitality house” as a type of building use in hospital districts. Planning commissioners originally discussed allowing short-term vacation rentals in hospital districts to accommodate patients or visitors of patients who were looking to stay near their hospitals. However, a much narrower definition of “hospitality house” is proposed to be added to the city’s code of ordinances to prevent other types of short-term rentals from taking off in such districts. Under the proposed language, a hospitality house is defined as “a noncommercial use of a building where living quarters are let to transient patients or relatives or companions of transient patients exclusively while receiving medical care; doctors; nurses or other transient medical staff or medical students of a local hospital or medical facility located in a hospital district.”

> Commissioners will consider setting an October 7 public hearing regarding a residential permit parking program for city neighborhoods. The program would allow residents in certain areas to obtain free permits to park beyond posted time limits on their streets. Commissioners could vote immediately after the public hearing at the October 7 meeting to approve the program.

> The new owners of the former Holiday Inn West Bay Beach resort will seek to transfer over all of the property’s liquor licenses from the previous management as part of a planned transformation of the site. Charles Mallory and George Cochran would become the new recipients of the property’s resort class-b hotel liquor license (including a specially designated merchant license) and four additional bar permits that also include allowances for Sunday sales, food sales, two outdoor service areas, and dancing/entertainment. Mallory and Cochran told The Ticker in January they plan to spend $10 million transforming the 179-room hotel into Delamar Traverse City, a four-star property that would become an “icon” and “showpiece” for the region.

> Finally, commissioners will consider making several appointments to city boards and committees Monday. Scott Moorey is recommended to be appointed to a three-year term on the Parks and Recreation Commission, while Nelson Asper and Andrea Deibler are recommended to be appointed to three-year terms on the Brown Bridge Advisory Committee. Commissioners will consider appointing one of their own members to serve on the commission’s adult-use (recreational) marijuana ad hoc committee, which is working with City Attorney Lauren Trible-Laucht and City Attorney Benjamin Marentette on possible city regulations for recreational marijuana facilities. Commissioner Michele Howard previously served on the ad hoc committee but is resigning from the commission effective September 23, creating a vacancy on the ad hoc.