Traverse City News and Events

Commongrounds, More Workforce Housing Projects On The Docket

By Beth Milligan | June 10, 2020

Construction is slated to break ground soon on the four-story, mixed-use Commongrounds Cooperative building at the corner of Eighth Street and Boardman Avenue, with the project anticipated to be complete by late 2021 or early 2022. The development is one of several planned to come online soon in Traverse City that will bring more workforce housing – residential units geared at individuals in the “missing middle” of income levels – to the region.

Commongrounds is set to break ground by late summer or early fall, according to Project Director Kate Redman, and could take 12-18 months to complete. Construction activity is already present on the site as work gets underway on a neighboring mixed-use development owned by Joe Sarafa, with construction of both projects overseen by Cunningham Limp. “It’s helpful to have them be able to balance resources and equipment and getting in and out on construction on both projects,” says Redman.

Commongrounds has raised funds totaling $1.37 million from 132 investors in a unique cooperative model that emphasizes community investment and tenant ownership in the property. “The median investment was $2,000, and the distribution of people who invested was even in genders and ages over the age of 30,” Redman says. “We were successful in being able to attract a lot of people who might not normally think of themselves as investors and have them be able to invest in a real estate project.”

Anchor tenants for the building include Higher Grounds Trading Company and Iron Fish Distillery, which will share a communal bar and café space adjoined by a food hall – a new addition to the project. The food hall will be overseen by Executive Chef Tony Vu of The Good Bowl, who is launching a similar project in Flint. “The model is to set it up to be a food entrepreneur incubator,” explains Redman. “The food hall owns the equipment, so entrepreneurs have a lower cost barrier to entry and then pay for the space through revenue sharing. It’s providing an opportunity for new folks to be able to come and test out their ideas instead of having to build out a full kitchen.”

Plans for a performing arts venue in the building are still on track, though Crosshatch Center for Art & Ecology and musician May Erlewine – once slated to own and operate the facility – are now project partners, with the venue likely to be managed by Commongrounds, according to Redman. Pathways Preschool dropped its plans to open a second location in the building, but Redman says Commongrounds is using a community advisory group to guide planning for a new childcare element in the building. “We're committed to having that be an early childhood space,” she says.

A long line of additional tenants have signed up to share office space at the property, including the Boardman Review, Building Bridges With Music, Commonplace Law, Norte, Parallel Solutions, SEEDS, Taste the Local Difference, Traverse City Track Club, and United Way. Some of those tenants are now at Commonplace – an existing coworking space across the street in The Box – with plans to consolidate into one building once Commongrounds is open. “We've seen a lot of demand for the office space, and it'll keep growing once the building exists,” Redman says. “There is access to a lot of great (amenities), like coffee and high-end cocktails, so that makes for a great work environment.”

Commongrounds will also have a commercial kitchen available for use as a teaching kitchen – offering nutrition and cooking classes – with additional meeting spaces and wellness and meditation rooms offered. “Our focus is food, family, arts, and wellness, and integrating owners and activities around those things,” says Redman. The building’s upper floors will host 24 rental units, with a quarter reserved for residents making 60 percent of the area median income (AMI), a quarter reserved for residents making 80 percent AMI, a quarter reserved for residents making 100 percent AMI, and a quarter reserved for market-rate rentals. Rents for the smallest studios will start at just over $600 per month, according to the Commongrounds website. “We want it to be affordable for the people working downtown, so they can actually live where they work,” says Redman.

Other developers are also responding to a documented need for more affordable and workforce housing in the region. A recently released report called the Northwest Michigan Target Market Analysis – conducted by LandUse USA and coordinated by Networks Northwest and Housing North – analyzes housing needs in the 10-county area. The report shows a regional demand in 2020 for 10,880 new rental units and 4,660 new ownership units. Most of the demand is for lower-priced housing units: about two-thirds of ownership housing demand is for units priced below $200,000, and 83 percent of the demand for rentals is for rents of $800 per month and less. The report notes that “missing middle housing types like duplexes, fourplexes, and small apartments can be more affordable and more in line with what the region’s households are looking for,” and encourages local governments to embrace funding and zoning solutions to support such projects.

Traverse City has several such developments on the docket. In addition to Commongrounds, city planning commissioners last week approved setting a public hearing for July 7 for a proposed workforce project by HomeStretch at 1028 Carver Street in Traverse Heights neighborhood. HomeStretch is seeking approval to rezone the property from R-2 (two-family dwelling) to R-29 (multi-family dwelling) to allow for the construction of 10 residential units on the site. Rentals would be reserved for residents whose income does not exceed 80 percent AMI based on family size, with rents likely ranging from $675 to $875 per month.

HomeStretch also has six two-story townhomes under construction at 1210 and 1216 East Eighth Street – a project called Oakwood Homes – with rents ranging from $720 to $930 per month for two-bedroom, 1.5-bath units. Another project on Fern Street aims to bring four “micro” loft-style units featuring two bedrooms and 1.5 baths. Developer Woda Cooper Companies is also pursuing affordable housing projects on Wellington Street and Railroad Avenue – developments that have been delayed as the company works to secure state funding – while the Traverse City Housing Commission prepares to undertake a major remodeling of its Riverview Terrace building and construct a new project called Parkview Apartments on the former Teboe Florist property near the Grand Traverse County Civic Center.

Both HomeStretch and the Traverse City Housing Commission have stated their intent to continue to look for city infill opportunities and development projects that will bring more workforce housing to the region. “The purpose of this is to relieve the three-and-a-half-year wait list we have right now that has over 100 people on it (for housing),” Traverse City Housing Commission Executive Director Tony Lentych previously told The Ticker about Parkview Apartments. “We think we could fill this building two-fold.”

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