Park Place Plans $50 Million, Four Phase Development

A $50 million, four-phase development could break ground in downtown Traverse City this summer if city and county leaders approve an estimated $20 million in public funding for the project.

CFO Robert Thimjon of Regency Midwest Ventures – owner of the Park Place Hotel and 13 other hotels across the U.S. – appeared before city and county commissioners Monday night to outline preliminary construction plans and financials. Envisioned as a public-private partnership affecting the Park Place Hotel, an adjacent State Street property and the Governmental Center, the project was pitched as a “win-win” for developers and residents that would bring workforce housing, public parking, commercial space and a new conference center to downtown Traverse City.

“It’s an economic stimulus for our area,” said County Deputy Director of Planning and Development Jean Derenzy, who’s guiding developers through the public funding process. “It brings in additional tax revenues, it brings in labor. It strengthens not just the Park Place but the community as a whole.”

Phase one of the project calls for the demolition of the Park Place Dome to make way for an upscale conference center, including an 80-90 seat “U.N.-style” amphitheater. The Park Place will also renovate its fitness center, add energy-efficient systems and upgrade its furnishings and fixtures as part of the project. Thimjon said the development would retain 120 jobs and create an additional 15-20 full-time positions. He noted the Park Place would primarily focus on marketing the conference center for off-season use, with the goal of driving year-round traffic into downtown retail stores and restaurants.

Derenzy also pointed out the plan doesn't call for more hotel rooms. "(Conference) attendees won't all be at the Park Place," she explained, saying other hoteliers would benefit from the project.

Bender Midwest Development will partner on phase two, which includes the construction of a 400-space parking garage (with 180 spaces dedicated to the Governmental Center) and 30 "row-house" style workforce apartments along Washington Street in the current Park Place parking lot. Derenzy said up to 24 of the one and two-bedroom apartments would qualify for Michigan State Housing Development Authority (MSHDA) subsidies, which would make rent at 2015 rates an estimated $625/month for a one-bedroom unit or $815 for a two-bedroom unit. The other six units would be rented at “market rate,” or under $1,000/month.

The garage will also help offset increasing parking demand at the Governmental Center, says Derenzy. The county and city will lose some spaces under phase three of the project, which calls for redeveloping the Governmental Center parking lot along Eighth Street into a mixed-use, four to five-story building with residential and commercial units. However, factoring in the parking deck across the street, total parking capacity at the Governmental Center will increase from 215 to 329 under the plan.

The fourth and final phase of the project brings in local developer Tom McIntrye, who plans to redevelop a single-story office building next to the Park Place into a multi-story, mixed-used development with two floors of commercial units, residential condos and multiple parking levels. Downtown Development Authority (DDA) Executive Director Rob Bacigalupi told commissioners having more mixed-use space on State Street was one of several “public benefits” the DDA saw in the development.

The DDA will be a key partner in the project, as developers are seeking an estimated $20 million in tax increment financing (TIF) 97 funding and brownfield dollars over a 25-30 year timespan for the project. $17 million of that is to cover infrastructure improvements, while another $1 million is for environmental cleanup. Derenezy noted of the four categories of criteria for brownfield funding – environmental, blighted properties, functionally obsolete properties and historical properties – the project meets both historical and environmental standards.

While some city and county commissioners questioned the project's overall density, the majority supported moving forward. “I think it’s a wonderful opportunity for the city of Traverse City and its residents,” County Commissioner Christine Maxbauer said. While County Commissioners Alisa Kroupa and Dan Lathrop inquired about the possibility of funding some but not all phases of the project, Derenzy said all four phases were inseparable in order for project economics to make sense.

“It’s important we know everything is inter-connected in this plan,” said Derenzy. “Phase two can’t happen without phase three. We need to get all of the components together within (one) brownfield plan to know if it’s going to work.”

The developers will next appear before the Brownfield Redevelopment Authority April 29 to begin the application process for brownfield funding. The group plans to provide more details on each phase of the project at that meeting. A brownfield plan would ultimately have to get the approval of not only the BRA but both the city and county commissions. Should approval be granted, Derenzy tells The Ticker that ground-breaking on all three Park Place-related phases could begin as soon as July. 

PHOTO: Robert Thimjon of Regency Midwest Ventures outlines Park Place plans