Developer John Socks is proposing to build a new 75-unit apartment complex on Railroad Place by The Filling Station Microbrewery – a project that would include 57 workforce units and encompass both a vacant parcel and the Skegemog Gardens property. Traverse City commissioners will consider the project Monday night as part of a packed agenda that also includes multiple park projects, a new city housing tool, and a resolution regarding Bay Street zoning.

Workforce Housing
Two parcels totaling just under 1.5 acres on Railroad Place could soon be the site of a new Traverse City apartment complex (pictured, rendering).

Commissioners will consider approving a payment-in-lieu-of-taxes (PILOT) agreement with John Socks of 520 Railroad LLC for the project. Instead of normal property taxes, a developer under a PILOT agreement pays a defined percentage of net shelter rents to the local municipality in exchange for building workforce housing. The PILOT agreement remains in place for a certain number of years.

In this case, 57 of the 75 units in the four-story building – 47 one-bedroom and 10 two-bedroom apartments – would be covered by the three percent PILOT agreement. Socks will “place a deed restriction for these 57 units for rent at 100 percent AMI or less for a total of 15 years during the PILOT period,” according to City Assessor Amy Robbins. That equals a maximum income level of $79,800 for one person, $91,200 for two people, or $102,600 for three people, according to state data.

The complex will also include 12 three-bedroom and 6 two-bedroom market-rate apartments. The PILOT agreement does not apply to those units; normal property taxes are charged for those apartments, which are “intended to subsidize the workforce housing units,” Robbins wrote.

One of the two properties slated for the development is home to Skegemog Gardens, which has been in business for nearly three decades. A site plan shows the parcel would be used for apartment parking. Skegemog Gardens owner Curtis Sherwood, who bought the business a few years ago from his uncle, says he was notified the property was for sale. Sherwood leases the property from owner Marty Lagina of MOL Properties LLC.

“We wanted to buy it, but we just couldn’t afford it,” Sherwood says. He wasn’t aware of the new development plans for the site – “we've been left in the dark a little,” he says – but hopes the company can find another location in Traverse City if required to move. “I have been looking for spots...it would be nice to stay here, but it can be hard to make the numbers work,” he says.

The application estimates the project will generate $26.8 million in economic activity and 134 construction jobs. The development team highlighted the use of modular off-site construction as a unique model that will reduce material waste and noise impacts and allow the project to be completed faster than a traditional on-site build. Robbins said the application earned a 16.5 out of 20 possible points on the city’s PILOT scoring matrix, “indicating an excellent project.” Construction is slated to begin this summer and be completed by fall 2027, according to the application.

Also at Monday’s meeting…
> Commissioners will consider approving multiple items related to city parks. The first is an agreement for construction to begin on “pocket park” improvements at city-owned riverfront property at 429 East Front Street next to the lift station. Commissioners previously approved a deal in which J. Peterson Homes, which is constructing a new mixed-used development across the street, agreed to cover all park improvements. The work is estimated at just under $128,000 and will include “improved seating areas, a river overlook deck, and native landscaping providing an inviting social and public gathering area on formally unkept property,” according to a memo from Parks and Recreation Director Michelle Hunt. The city will retain ownership of the improvements and be responsible for their maintenance after construction.

Commissioners will also approve an agreement that grants access to the Great Lakes Fishery Commission and Spence Brothers to complete the final phase of FishPass work. That phase will include “upland improvements such as paths, the amphitheater, the science building, and so forth,” according to City Attorney Lauren Trible-Laucht. She noted the project is “being completed entirely at no cost to the city,” though the improvements will be city-owned. The U.S. Army Corps of Engineers continues to oversee the in-stream improvements as that phase wraps up.

Also related to parks, commissioners will approve an agreement with the Up North Disc Golf Association to assist with disc golf course planning and maintenance at Hickory Hills. They’ll also set a July 6 public hearing on the city’s new five-year Parks and Recreation Master Plan.

> Commissioners will consider approving a new tool to encourage housing. Michigan adopted two new statutes in recent years that offer property owners tax exemptions in exchange for renting units to income-qualified tenants. Rent can be no more than 30 percent of the tenant’s adjusted household income. The Attainable Housing Facilities Act (AHFA) applies to properties with four or fewer dwelling units, while the Residential Housing Facilities Act (RHFA) applies to properties with five or more units. Both programs offer a 50 percent reduction in property taxes for up to 12 years. Commissioners will consider establishing districts where each type can be used and allocating up to $75,000 to cover a required public notice process.

> Finally, commissioners will consider approving a resolution stating that no zoning changes will be made to Bay Street until the city’s next master plan is adopted. The master plan is required to be reviewed every five years, with the most recent plan adopted in 2024. That plan identified Bay Street as a “transitional neighborhood” in the future land use framework, a designation that doesn’t change today’s zoning but raised alarm among Slabtown residents that it would lead to overdevelopment. The resolution is meant to “provide reassurance to the neighborhood and allow the master planning process to proceed on its required schedule,” according to a joint memo from Mayor Amy Shamroe and Mayor Pro Tem Laura Ness.