Tall Building Ruling Raises SLUP Questions

Traverse City commissioners decided in a special meeting Wednesday not to appeal a recent ruling by Judge Philip Rodgers to vacate a special land use permit (SLUP) for the proposed nine-story River West project.

But several commissioners joined city staff and developers in expressing concerns that Rodgers’ ruling places new requirements on projects beyond those outlined in the city’s zoning code – creating uncertainty in how SLUPs should be reviewed going forward.

Commissioners met for over three hours Wednesday – including two hours in closed session with City Attorney Lauren Trible-Laucht – to review their legal options in response to Rodgers’ March 31 ruling. Rodgers remanded the River West SLUP back to the board for more “thorough consideration," criticizing commissioners for not adequately analyzing the project’s impact on city services and infrastructure, or its use of “extensive public subsidies on the backs of local taxpayers.”

The judge also directed officials to consider issues ranging from comparative property tax rates in neighboring communities to the project’s effect on sprawl to how the development would impact the city’s general fund.

While considering whether to appeal, commissioners questioned whether Rodgers’ criteria matched that of the zoning ordinance governing SLUPs. According to City Planning Director Russ Soyring, a developer’s estimated revenues or tax projections aren’t included in the required standards for receiving a SLUP. Nor is a project’s potential use of housing, brownfield or tax increment financing (TIF) subsidies, he says.

“I don’t remember that being part of the conversation for any special land use permit (issued by the city),” Soyring says. While a project’s impact on city services and infrastructure must be reviewed as part of a SLUP process, the ordinance stipulates only that a development not “create excessive additional requirements” on those systems, allowing for some reasonable impact.

“We went through the same analysis of public infrastructure costs for allowing this building to go up…as we did the Webber Heart Center (at Munson Medical Center), which is 108 feet,” says Soyring.

Trible-Laucht told commissioners other organizations had contacted city staff in the wake of Rodgers' ruling to express concerns about its impact on future projects, including the Michigan Economic Development Corporation, Michigan Municipal League and Michigan State Housing Development Authority.

The potential confusion over development standards going forward prompted Commissioners Amy Shamroe, Brian Haas, Gary Howe and Tim Werner to vote to file an appeal. “I have my concerns about where this (ruling) leaves us,” Shamroe said. “Are we going to get challenged on other SLUPs because of similar questions?” Shamroe said an appeal could help the commission get “definition” from the courts on what standards it should use for issuing SLUPs. Haas also stated that he was “uncomfortable with some of the opinions the judge sent down,” such as the need to review competing tax rates among townships as part of a SLUP process.

Because the city would need to hire outside counsel for an appeal – a contract estimated to cost $10,000 – the motion required five affirmative votes to pass. With only four commissioners in favor, the motion failed. The decision not to appeal means commissioners will “wait and see” how developers decide to proceed – whether that’s filing an appeal of their own, bringing the SLUP back to the commission for a new review process, or building a development under the 60-foot standards allowed by right on the property.

“We are keeping all of our options open,” says developer Joe Sarafa, who with partner Erik Falconer has until April 21 to file an appeal. “We have not finished evaluating that yet.”