HomeStretch Housing Projects on City Agenda

Traverse City commissioners will hear updates tonight (Monday) on two proposals to bring workforce housing to city property. HomeStretch Nonprofit Housing is behind both projects, including on Lot O – the parking lot next to The Omelette Shoppe at the corner of State and Cass streets, for which HomeStretch already has a deal with the city – and on two contiguous properties on Beitner Street/Woodmere Avenue. The city issued a request-for-proposals (RFP) for the latter parcels in November seeking developers interested in creating workforce housing.

Lot O
After signing an agreement with the city in 2023 to purchase Lot O for $470,000, HomeStretch has been working to line up funding for a mixed-use development on the site (pictured, rendering). Under the agreement terms, the property deed is being held in escrow through May to give HomeStretch time to secure financing (an optional one-year extension is available if requested and approved by the city). Substantial construction must be complete by May 2028. The city has been continuing to use Lot O for parking in the meantime.

In an update that will be reviewed with commissioners tonight, HomeStretch said it is now partnering with Wallick Communities – the development group behind Meadow Valley in Garfield Township and Corners Crossing in Blair Township – on the Lot O project. “This relationship has yielded benefits including a lower project budget estimate (approximately $15 million) based on their in-house construction expertise and capacity,” HomeStretch wrote.

Plans for the proposed building now call for 39 residential units, including 8 studio units (450 square feet), 26 one-bedroom units (600 square feet) and 5 two-bedroom units (850 square feet). The average tenant would earn 60 percent of the area median income (AMI). While the latest design represents “less density” than first envisioned – HomeStretch initially planned to have 60 units in the building – the layout provides “more living space per unit for tenants,” the organization said.

HomeStretch has entered an agreement with a “local food curator who will be leasing the ground-floor commercial space as a fresh produce and food market like Trader Joe’s, with local and Michigan-sourced products as a differentiator,” the organization said. “The elimination of a ‘food desert’ within the downtown area has piqued the interest of MEDC (Michigan Economic Development Corporation) in their revitalizing and placemaking grants.”

HomeStretch, which has invested $65,000 in predevelopment work to date, is applying for $2.4 million in MEDC funding and another $9.4 million in Michigan State Housing Development Authority (MSHDA) funding, with plans to also soon seek a city payment-in-lieu-of-taxes (PILOT) agreement. The organization said it has a site plan ready to submit for review. Contingent on financing, HomeStretch could begin construction in 2026 with a targeted opening in 2028.

HomeStretch did note one other significant challenge: navigating a required tunnel in the building design to maintain access from State Street to the rear parking area of neighboring businesses like The Omelette Shoppe and My Secret Stash.

“A tunnel has been designed under our building to accommodate their access and large delivery trucks plus waste hauling, which occurs weekly,” HomeStretch wrote. “The logistics of relocating their vehicles and waste-hauling traffic while under construction is being explored, with an alternative solution to build a tunnel access at the beginning of the project. This, while less than ideal due to traffic beneath a construction site, may be the best and only option.” Commissioner Tim Werner was the sole ‘no’ vote against the Lot O deal in 2023 specifically because he opposed imposing the condition on HomeStretch to include the tunnel access for cars, though it was ultimately included in the contract approved by the board.

Beitner/Woodmere
HomeStretch will also present a proposal in response to the city’s November RFP for a workforce housing project on two contiguous city-owned lots at 715 Beitner Street and 535 Woodmere Avenue.

HomeStretch’s estimated $4.6 million project proposes to bring 18 residential units to the site to serve individuals and families with mixed incomes. Rental units will be available for households earning 60 to 120 percent AMI, with a blended average of 65 percent AMI based on square footage. A key component is “a partnership with Goodwill Northern Michigan to provide permanent supportive housing, offering stable, long-term housing paired with supportive services for individuals facing housing insecurity,” according to the city’s Bay Brief.

Potential funding sources for the development include MSHDA, Goodwill, MEDC, and the Michigan Department of Environment, Great Lakes, and Energy (EGLE), according to project documents. HomeStretch also plans to seek a four percent PILOT agreement with the city and will ask commissioners to consider a parcel donation to “support project viability.” The proposal contemplates fundraising through next year, with a potential 2026-27 construction timeline and 2027 opening.

Two other housing organizations weighed in on the city’s RFP but declined to move forward. The Traverse City Housing Commission said it couldn’t participate due to “limited staff time and current financial commitments,” pointing to another workforce housing development on East Eighth Street as well as projects underway at The Flats at Carriage Commons and Orchardview Apartments.

Woda Companies initially submitted a response to the RFP but withdrew its application. The organization cited perceived financing challenges and the property’s proximity to the city’s Department of Public Services (DPS). Woda said it believed a building could be constructed to mitigate vibrations from the nearby railroad tracks, but anticipated issues with the city’s 24/7 DPS operations – especially given that snow storage occurs on the site. Some city commissioners also expressed concerns about the railroad tracks and DPS operations when issuing the RFP, prompting them to include language stipulating that proposals include an “appropriate soundproofing” plan.