In addition to several issues related to using and maintaining city properties, Traverse City commissioners will tackle a busy agenda tonight (Monday) covering multiple housing topics. They include a proposed payment-in-lieu-of-taxes (PILOT) agreement for a HomeStretch housing project on Lot O, proposed density changes to R-2 neighborhoods, a vote to schedule a public hearing on Safe Harbor’s year-round expansion, and a public hearing on the city’s 2025-26 Community Development Block Grant plan.

HomeStretch PILOT
Commissioners will consider approving a PILOT agreement tonight for a new HomeStretch workforce housing complex planned on Lot O on the corner of State and Cass streets (pictured, rendering). HomeStretch appeared before commissioners in February to give an update on the project, which will see the nonprofit purchase the city-owned parking lot for $470,000 to build a five-story, mixed-use building with ground-floor retail and 44 residential units on the upper four floors. The retail tenant is planned to be a local food market.

HomeStretch – which is partnering on the project with Wallick Communities – is seeking a variety of funding sources, including a city PILOT agreement. A PILOT agreement allows a developer to pay a percentage of rental income to the city instead of traditional taxes to offset the costs associated with offering below-market housing. In this case, HomeStretch is seeking a 30-year, four percent PILOT agreement – equating to an estimated annual payment of $26,271. The target market for residents will be those earning between 30 to 120 percent of the area median income (AMI), with a mix of studio, one-bedroom, and two-bedroom units offered. HomeStretch estimates the majority of units – 80 percent – will be allocated to tenants earning 60 percent of the AMI.

HomeStretch is committing that that 80 percent of units will “remain at an affordable rate for so long as any mortgage loan remains outstanding and unpaid by (the buyer), the premises is owned by the buyer, or for 30 years, whichever is longer,” according to the agreement language. Using a city scoring matrix for PILOT applications, staff said the HomeStretch project received a “favorable ranking of 18.99 out of 20 possible points for this request.” Contingent on financing, HomeStretch could begin construction in 2026 with a targeted opening in 2028.

R-2 Density
Commissioners will vote tonight on proposed changes to the R-2 (mixed density residential) zoning district that would allow up to four dwelling units instead of two to be built on properties. The rules would still limit the maximum of residential structures to two, but would allow new configurations like two duplex buildings, a triplex with an accessory dwelling unit (ADU), or a quadplex. “Essentially, the only change is how a residential building may be divided on the inside to accommodate the allowed number of dwelling units,” City Planning Director Shawn Winter previously noted. Planning commissioners recommended the proposed changes to the city commission in a 7-1 vote in early March, with Planning/City Commissioner Jackie Anderson opposed and Planning Commissioner David Knapp absent.

Setbacks, height limits, impervious surface limits, and lot width and area would remain the same under the ordinance, so the changes “would not permit something to be built in terms of scale and placement other than what is allowed today,” Winter wrote. However, a close vote by commissioners on March 17 to even allow the agenda item to move forward for consideration tonight indicates the changes – which need four commission votes to pass – could be in for a lengthy debate. The board previously voted 4-3 to schedule tonight’s enactment discussion and vote, with Mayor Amy Shamroe, Mayor Pro Tem Mark Wilson, and Commissioners Mi Stanley and Mitch Treadwell in support and Commissioners Tim Werner, Heather Shaw, and Anderson opposed.

Safe Harbor
Safe Harbor continues to progress through the multiple required approval steps to amend its special land use permit (SLUP) with the city to expand to year-round operations.  

After receiving planning commission support last month, city commissioners will vote tonight to schedule a public hearing on the application for May 5. Commissioners could then vote that same night to approve the SLUP, which would allow Safe Harbor to operate between May 15 and October 15 – something it’s currently not covered to do under its existing permit. To help address the city’s homelessness crisis – including the encampment at the Pines off Eleventh Street – Safe Harbor has raised $1.1 million in commitments from various community and municipal partners for each of the next two years to operate year-round, starting with this upcoming summer season.

CDBG Plan/Housing Update
Finally, commissioners tonight will hold the first of two required public hearings on the 2025-26 action plan for the city’s Community Development Block Grant (CDBG) funding. Funds are intended to provide “decent housing, a suitable living environment, and expanded economic opportunities” for low and moderate-income groups, according to the federal government.

The city’s plan lists two primary goals of using funds to assist with the “construction and rehabilitation of affordable housing and lowering the economic barriers to such housing” – working with partners like HomeStretch, Goodwill, and the Traverse City Housing Commission – plus supporting “community and economic development projects.” Funds can also be used for program administration. The full action plan is available to view online. Tonight’s public hearing will kick off a 30-day public comment period on the plan, with a second public hearing and commission adoption scheduled for May 12.

Commissioners tonight are also expected to receive an update “regarding efforts surrounding the unhoused residents of Traverse City” from City Manager Liz Vogel and Police Chief Matt Richmond, according to the meeting agenda.