A second development in downtown Traverse City is being impacted by a recent ruling from Judge Thomas Power against the City of Traverse City over the way building height is measured in the city.

Power ruled last month that all components of a building – including rooftop architectural and mechanical features that historically haven't counted against building height – must be under 60 feet or else trigger a city election under Proposal 3. That ruling put the brakes on a planned Innovo development on Hall Street, but has since also prompted the city to issue a cease-and-desist order against developer Tom McIntyre for his Peninsula Place project under construction on State Street. McIntyre plans to fight that decision even as the city itself challenges Power’s ruling in the Michigan Court of Appeals – one of two decisions by Power, the other halting FishPass construction, that will be appealed in higher court in 2022.

City Attorney Lauren Trible-Laucht confirms that the city sent a cease-and-desist letter to McIntyre after Power’s November ruling in favor of community group Save Our Downtown, which argued in its lawsuit against the city that all features of a building must be under 60 feet or else trigger a public vote. The city unsuccessfully argued that building height has always been measured the same way, from the grade to the roof deck, and that the formula has never included parapets, steeples, clock towers, or other mechanical or architectural features. In his ruling, Power acknowledged that some recently constructed buildings in Traverse City – such as the new 4Front Credit Union headquarters on West Front Street – have rooftop features that extend above 60 feet, but said he couldn’t apply his ruling to those buildings since they were already finished.

Power ordered an injunction prohibiting Innovo from moving forward with construction plans on Hall Street, however, determining that project was not far enough along to be grandfathered in. Innovo would either be required to bring all components of the building under 60 feet, which Innovo attorney John Lynch said would effectively cut a floor or two off the project, or else receive voter approval to proceed with the building as designed. Other prominent projects under construction received a pass because they were “substantially constructed,” according to Trible-Laucht, including the new Honor State Bank building on East Front Street and the Commongrounds development on Eighth Street. However, McIntyre’s Peninsula Place project – which, like the rest of the listed projects, is under 60 feet as historically defined by the city but has rooftop features exceeding that height – was flagged after Power’s ruling because it’s still in the early stages of construction.

“That one is really in the same category as Innovo, as there’s been no substantial construction,” says Trible-Laucht. “They had been issued a permit, but it’s not been substantially built. The city had to revoke their land use permit.”

McIntyre says he believes city staff “made a big mistake” in their interpretation of Power’s order, adding he’s in the process of challenging that decision with the city. “We think (Trible-Laucht) made a mistake in her interpretation of the judge’s ruling, and we’ve spoken to her about it and are going to send a letter next week basically preserving our rights under the original permit,” he says. “We believe we can work it out.” Construction crews broke ground this summer on the five-story, 42-unit Peninsula Place project next to the Park Place Hotel, with work already proceeding on laying the foundations of the building, according to McIntyre.

McIntyre calls the cease-and-desist order an “unfortunate” development for the project, which already experienced several previous setbacks due to Proposal 3. After voters passed the city charter amendment in 2016 requiring a vote on any buildings over 60 feet, McIntyre sued the city to try and get Proposal 3 declared illegal in court. To prove his standing, or right to sue, he also went through the new required vote process for his proposed 100-foot Peninsula Place building. Voters rejected those plans at the polls, and Power subsequently ruled against McIntyre, upholding Proposal 3. Though McIntyre considered appealing to the Michigan Court of Appeals, he ultimately decided to redesign the building and move ahead with a development just under 60 feet (pictured, rendering) instead of 100 feet so the project could proceed.

McIntyre is now working through options with his legal team, including asking the city to reconsider its interpretation of Power’s ruling, redesigning the building yet again, or considering legal action, such as challenging the city’s cease-and-desist order in court or seeking to become an intervening party in the Save Our Downtown lawsuit headed to the Michigan Court of Appeals. City commissioners voted earlier this month to appeal Power’s decision in that case, which Innovo is also appealing. The appeal could take 18 to 24 months to play out, Trible-Laucht estimates. In the meantime, city staff are reviewing any incoming projects “in deference to the circuit court’s order,” Trible-Laucht says, meaning any proposed buildings that come close to 60 feet will be required to keep all parts of the development under that height line or go to a public vote. Trible-Laucht says city commissioners will also likely need to meet at some point to update the implementation policy for Proposal 3 so that the new rules are clear for developers and the public.

The case is one of two prominent lawsuits the city lost in Thirteenth Circuit Court this year in front of Power over alleged charter violations. The other case, filed by resident Rick Buckhalter with assistance from attorney Jay Zelenock – who is also counsel for Save Our Downtown in the building height lawsuit – halted the construction of FishPass at the Union Street Dam. Power agreed with arguments from Buckhalter’s team that the dam is city parkland and thus requires a vote of the public to be changed to a non-park use, which the judge determined FishPass to be. The city countered that the dam is not officially parkland and thus not subject to the charter, and that even if it were, the planned FishPass improvements still constitute park use and don't require a public vote.

Trible-Laucht says the city and co-defendant Great Lakes Fishery Commission have filed briefs with the Court of Appeals and are now waiting on the plaintiff’s team to file their briefs. She says the higher court sent out a request to attorneys in the case asking them to inform the court of any scheduling conflicts in the coming six months, indicating oral arguments in the FishPass appeal could be presented within the first half of 2022. Trible-Laucht says all of the involved FishPass partners have remained “totally committed to the project,” though it’s unclear how project costs and funding will be impacted depending on how long the case takes to resolve and the Court of Appeals’ final ruling.

“The city is doing everything it can in the interim to maintain the dam the best it can,” says Trible-Laucht, pointing to the recent hiring of engineering consultant AECOM to monitor the Union Street Dam. “The dam needs to be replaced. That’s what ultimately needs to happen. Since we can’t do that right now, we’re doing everything we can do short of that. Safety is our number-one concern.”