A plan to solicit proposals from developers to build housing on three properties owned by the City of Traverse City has raised concerns from city staff, who flagged several challenges with the plan in a memo to city commissioners. Commissioners will discuss the memo at their meeting tonight (Monday), where they’ll also vote on moving ahead with the reconstruction of Madison and Jefferson streets in 2023 and authorizing a two-year pilot to convert three downtown streets to two-way traffic.

Housing RFP Proposal
A request from Commissioners Tim Werner and Ashlea Walter to issue a request-for-proposals (RFP) to develop workforce housing on three contiguous city-owned parcels – located at 715 and 723 Beitner Street and 535 Woodmere Avenue – could face several challenges, according to a memo from City Manager Marty Colburn. Commissioners first discussed the proposal at their September 19 meeting and agreed to delay any action until tonight’s meeting to give staff additional time to research the proposal.

The three parcels were identified in a list of city properties this spring that could be suitable for developing housing. But according to Colburn, while the parcels “admittedly…scored well” as a location for potential housing, there are several issues commissioners should consider before deciding to proceed with issuing an RFP. One, which was raised at the September meeting, is that a contract term for the parcels when they were purchased by the city stipulated they couldn’t be resold again for five years, meaning an outright property sale (if such an option was pursued) could only take place in October 2023 or beyond. Some commissioners questioned last month whether the timing made sense to solicit bids now if the properties couldn’t actually be sold for another year.

Colburn also raised several additional concerns in a new memo to commissioners. He said the “physical and environmental conditions” of the site are “not known and fully understood at this time,” with the possible presence of contaminated soils that should not be disturbed until further assessments can be completed. “These types of physical and environmental site conditions are typically established prior to issuing an RFP and included with it so any prospective bidder can be informed when submitting their proposal,” he wrote.

Colburn also said questions about the “suitability of the site for housing and the optics of equity have been raised.” The location of the parcels “almost certainly” means it’d be developed for workforce and not market-rate housing, Colburn said, adding that conditions around the site are not ideal for residential living. “The activities that occur on the neighboring property through the (Traverse City Department of Public Services) operations, along with the active rail corridor, would create a very disruptive environment for housing and could contribute to a negative quality of life,” he wrote. Colburn said he had personally “acknowledged after exploring the centralized campus model for all city operations that this location would not be a good fit because of the impacts of the DPS operations. It’s hard to advocate that a location would be the best fit for housing, likely an affordable housing project for people who are struggling to attain housing, when we are willing to accept the negative externalities of the location would be too disruptive for incompatible city operations.”

According to Colburn, another concern is “the potential loss of a strategically located property without looking comprehensively for its highest and best use, especially as it relates to city operations since we already own it.” As the city continues to grow and develop, “it is almost inevitable that the DPS operations at that location will do so as well…there would be no better location for the future expansion of DPS operations. Giving up this property now almost ensures that future expansion of DPS operations would require obtaining property at a different location which is likely to bring with it a higher future cost and reduce efficiencies by fracturing the operations.”

The property is currently used for construction staging for city projects and for city snow storage. If the city could no longer use it for snow storage, Colburn said the longer travel times for staff to reach the only other available snow storage site on Keystone Road could mean downtown streets aren’t fully cleared until late morning in the winter. “Having downtown essentially shutdown from midnight to 10am or 11am is detrimental to maintaining a vibrant successful downtown, which in turn attracts other opportunities for economic development,” Colburn wrote. He also said that “quadrupling the distance for each (snow) load will not only sharply increase those costs, but also result in more fossil fuel combustion and carbon release, which is at odds with the city commission’s goal of looking at all actions through the lens of climate change.”

Colburn acknowledged that “the best use” of the three city-owned properties on Woodmere and Beitner long-term “may not be snow storage or construction staging.” But the city manager recommended that before commissioners move forward with an RFP or any other process that could include disposing of the property, the city first identifies and acquires an “equally suitable location” for those services so it can transition them to another site before converting the parcels to housing.

Also at tonight’s meeting…
> Commissioners will consider giving conceptual support for moving ahead with the reconstruction of Madison and Jefferson streets in 2023. A handful of commissioners have raised concerns about the project, ranging from timing to design to project scope to the inclusion of green infrastructure. Staff will walk through answers to those concerns tonight in an attempt to get commission support to proceed, noting that “public engagement and designs have been in the works for over four years, and a delay would cost unnecessary time and money,” in the words of City Engineer Tim Lodge. The Slabtown Neighborhood Association previously expressed their support for the reconstruction plans and moving ahead with the project.

> After discussing the proposal at multiple prior meetings, commissioners will officially vote tonight on approving a two-year pilot to convert State Street, Pine Street, and Boardman Avenue to two-way traffic in downtown Traverse City. The pilot project is anticipated to cost $138,000 – to be paid for with parking and TIF 97 funds – and will include removing the existing traffic islands at State Street/Boardman Avenue and Boardman Avenue/Front Street, improving the traffic signals at State/Union and State/Cass, modifying the State Street entrance to the Hardy Parking Garage, upgrading pavement markings and signage, and making snow-plowing modifications. Four-way stops will be installed at Boardman/State and State/Park, with new stops signs also installed at the Front/Pine and Boardman/Front intersections.

> Commissioners will consider adopting a new building electrification policy proposed by Commissioner Werner. Werner, noting the city’s stated intent to “be proactive and take a leading role in addressing climate change,” called for adopting a policy requiring all new buildings built on city-owned property to be fully electrified, as well as all new buildings that receive city payment-in-lieu-of-taxes (PILOT) agreements to be fully electrified. The policy would also require all city property that is sold or leased to be deed-restricted to full electrification, and any city buildings that undergo major renovations to be fully electrified. The city would not purchase any new boilers or other heating supplied by fossil fuels under the policy, nor have generators requiring fossil fuels.

> Finally, commissioners will consider authorizing a $45,691 contract with Team Elmer’s to improve the basketball courts at two city parks. The project will include resurfacing the existing asphalt court at F&M Park with concrete and enlarging its size, as well as constructing a brand new concrete basketball pad at Arbutus Court Park. These projects were identified in the Brown Bridge Parks Improvement Fund ballot initiative and were requested by the Parks & Recreation Commission as part of their capital improvement program (CIP).