Traverse City News and Events

Downtown Parking, Housing Development Estimated to Cost $67.7 Million

By Beth Milligan | Feb. 17, 2024

A planned mixed-use development on State Street in downtown Traverse City – which would include a long-discussed third public parking deck with 534 spaces, in addition to retail space and 82 attainable housing units – is estimated to cost $67.7 million, according to new estimates reviewed by TC Downtown Development Authority (DDA) board members Friday. The parking deck itself represents roughly half the total project cost, with discussions likely to come among city leaders on whether they still want to pursue the parking component and how much of the overall project should be included in the DDA’s new TIF plan, which is headed to a spring vote.

Architect John Dancer of Cornerstone Architects – hired last summer along with consulting firm Fishbeck to lead the design process for the development – walked DDA board members through the project details and costs. Dancer said the development addresses downtown and community needs with a focus on attainable housing, “parking for multiple user groups,” the ability to leverage public-private partnerships, flexibility to repurpose buildings in the future, and sustainability features ranging from 100 percent electrification and on-site stormwater controls to recyclable materials throughout the development and a potential rooftop solar array.

The project would cover multiple parcels on the corner of State and Pine streets, which the city has been acquiring over several years for the deck. The project has three key components: the parking structure, which would be located along (and accessed entirely by) the State Street alley; a “liner building” located in front of the deck facing State Street with retail and housing; and another mixed-use building called the A/B building (named for the parcels on which it sits, including the former Master Dry Cleaners space).

The parking deck would be six levels and include 534 spaces, including nine ADA spaces and seven electric vehicle (EV) charging spaces. Dancer said the number of EV spaces could be expanded in the future as those vehicles “become more prevalent.” The rooftop could include green features and either snowmelt or a solar array, Dancer said.

The liner building would have approximately 3,600 square feet of ground-floor retail along State Street – which could be used by a single tenant or split among several – and a “mobility hub” with bike storage, separated male/female showers, public restrooms, and lockers. That hub could be ideal for accommodating downtown commuters and cyclists, Dancer said. The upper four floors would have a mix of one and two-bedroom residential units. Dancer said those floors have a “clear span” design, a “wide open space” without load-bearing columns – meaning the number and size of units can be easily reconfigured to meet changing future needs. The liner building as proposed has 56 units – 14 per floor – in a size range of 400 to 680 square feet.

The five-story A/B building would share infrastructure with the parking deck – a joint stairwell and elevator – to make the parcel “more efficient,” Dancer said. It’s proposed to have 1,600 square feet of retail space and accessible residential units on the first floor, with six units each on the second through fifth floors. The tops of both mixed-use buildings could have green roofs and zones for mechanical equipment. In response to a board question, Dancer said the roofs wouldn’t be designed or accessible for public or residential use given the city’s current restrictions on building height – but that could potentially change in the future if the height rules were modified.

The project envisions State Street and its alley both remaining two-way corridors as they are now, as well as changes made to the bumpouts at the Union/State and Pine/Front intersections to allow for more lane turns, since it’s anticipated more cars will be flowing in and out of the parking deck. Snowmelt is planned to be installed in the sidewalks and part of the alley surrounding the development, and the alley itself could feature permeable pavers. Dancer said the project would meet basic LEED standards at a minimum and offers numerous options for sustainability elements, from efficient plumbing and lighting fixtures to regionally sourced and recyclable materials. The city will be incurring additional costs for going all electric on the project versus having conventional gas-fired equipment, Dancer said. However, the city’s new electrification policy requires all new buildings built on city-owned property to be fully electrified starting this year.

The housing units will be aimed at tenants earning between 80 and 120 percent of the area median income (AMI), according to DDA CEO Jean Derenzy. The city will look at partnerships with outside developers to manage the housing component, as well as a payment-in-lieu-of-taxes (PILOT) agreement with the city for funding assistance. The total project cost of $67.7 million includes $23.4 million for the liner building, $9.9 million for the A/B building, $32.4 million for the parking deck, $856,000 for site preparation and utilities, and $1.1 million for public space sitework/hardscaping (such as the sidewalks, alley improvements, and a proposed new State Street pedestrian crossing). The cost of undergrounding overhead utilities in the alley is still being determined in conjunction with Traverse City Light & Power and is not included in the cost estimate.

Derenzy said that while the West End project is envisioned to be included in Moving Downtown Forward – the new name for the extended TIF 97 plan expected to go to the DDA board and city commission for approval this spring – “TIF doesn't have to pay for all of this.” TIF can pay for a portion of the development, but a range of other sources – from grants to private investment to other project partners – will likely cover the total cost, Derenzy said. Dancer noted the development is designed in such a way it could be constructed in phases if needed. DDA Chair Gabe Schneider said the deck cost itself is in line with previous estimates – preliminary figures last year put the project at over $32 million – but noted the development has expanded to include elements supported by public input, like housing. While the price tag is “a big number,” Schneider said, quoting it in association with a parking deck alone is “not truly the full story.”

Board members Friday raised some existential questions about the project that are likely to be continued in future discussions by both the DDA and city commission – primarily whether there’s enough public demand and support to move forward on the parking component. Mayor Amy Shamroe said the city could potentially construct the mixed-use buildings first and add a deck in the future when there’s more need. “Does anybody want the parking structure right now?” she asked. “Should it be included in this current plan?” While the Old Town parking deck saw high use prior to COVID, Shamroe said, it has yet to rebound to those numbers with Hagerty and other employers not fully returning to the office. Shamroe said she anticipates future downtown growth will likely support both the Old Town deck and a new deck, but that she wanted to hear through more public input whether there’s community support for a new deck now.

Other DDA board members noted that both the city’s master plan and DDA plans have long discouraged developers from building private parking downtown with the understanding the city planned to consolidate and add more parking in public decks, discouraging the spread of surface lots. “Stacking cars is better than spreading cars,” said board member and The Workshop Brewing Company owner Pete Kirkwood. He pointed out that many upcoming downtown projects that have widespread public support – including improving the riverfront and upgrading the farmers market – will require eliminating parking spaces, with the understanding they’d be replaced in a new deck. Board member Scott Hardy said the city can’t turn its back on building a new deck now after saying for years it’d do so in lieu of private parking. “That’s not a DDA promise, that’s a master plan promise,” he said.

Schneider said the DDA and city will have more time to refine the details of the proposed development in the future, but will need to agree on a general vision for what to include in the Moving Downtown Forward plan this spring. “I would challenge this board to be visionaries,” he said. “I think we have a great opportunity to do that.” Kirkwood said he wanted public discourse that is more “fair and honest” about the reasons behind opposition to either the development or the TIF extension itself, saying those discussions should include not just negative comments but a full understanding of the “ramifications” of not pursuing those options for downtown.

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