The Michigan Supreme Court Monday declined to hear appeals in two pivotal Traverse City cases, leaving in place lower rulings that handed the city partial or full victories determining how building height is measured locally and allowing the construction of FishPass at the Union Street Dam to move forward.

The Michigan Supreme Court said it wouldn’t take up either case because it is "not persuaded that the question presented should be reviewed by this court." That is the standard denial issued to most appeal applications presented to the court, according to the court website. The Michigan Supreme Court receives nearly 2,000 applications per year and grants only about 100, the website notes.

"A denial order is not a decision to uphold (affirm) the decision made by the lower court," the website states. "It is simply a decision that the Supreme Court will not hear the case. It does not imply approval or disapproval of what was decided below."

Still, the denials leave in place lower orders from the Michigan Court of Appeals that largely favored the city. A Michigan Court of Appeals ruling October 13 overturned a 2021 ruling by Judge Thomas Power stating that all parts of a building must be under 60 feet or else go to a public vote under the city charter in Traverse City. Community group Save Our Downtown sued over a Hall Street mixed-use apartment building planned by development group Innovo, arguing that parts of the city-approved project were over 60 feet and thus subject to a public vote. The city and Innovo counterargued that building height has always been measured from the grade to the roof deck – excluding parapets, steeples, clock towers, and other mechanical and architectural features – and that city policy adopted after the charter was amended specified some building features could be over 60 feet and not trigger a vote.

Power sided with Save Our Downtown, requiring either all building features to be under 60 feet or else go to a vote. The Michigan Court of Appeals overturned Power’s ruling, saying the city charter amendment "does not expressly address how to measure the height of a building.” If Save Our Downtown wants to change the city's zoning ordinance regarding how building height is measured, the court said, the group must follow the proper legal process in Michigan for amending zoning rules. With the Michigan Court of Appeals ruling now standing, the city can continue to measure height as it has traditionally for developments – meaning some building features won’t count toward the 60-foot height limit.

The Michigan Court of Appeals agreed with Save Our Downtown, however, that even under the city’s definition of building height, the Innovo project exceeded 60 feet by roughly two feet and would need to either modify its design or go to a vote. Innovo put the ballot request to voters last fall, who rejected the proposal. Innovo’s Brian Mullally says the group now intends to “resubmit updated building plans to the city in accordance with the Court of Appeals ruling.”

“We are continuing to move forward with our plans for workforce housing at Hall Street,” Mullally adds. “We are gratified by the decision by the Supreme Court. We were confident that the law was on our side and...we are, as we always have been, ready to get to work in Traverse City and are excited about helping provide much-needed long-term housing solutions. We look forward to working with the city on the adoption of a new PILOT program to help reduce the tax burden on long-term apartment rental housing to improve affordability in the City of Traverse City.”

Jay Zelenock, an attorney for Save Our Downtown, says that while the group is “disappointed that the Supreme Court didn’t grant a discretionary appeal to address additional technical issues about proper building measurement techniques,” Save Our Downtown was still “very happy overall” that the Michigan Court of Appeals ruling gave the public an opportunity to vote on the Innovo project. “Democracy and the power of the people remain very important in exercising local home rule under the Constitution,” he tells The Ticker. “The people of TC will need to remain vigilant against efforts by developers, investors, or other politically-connected interests who may seek to transform the city for private profit in ways the people don’t want.”

Attorney Brenda Quick, also with Save Our Downtown, says she shares Zelenock’s sentiments, adding that “it has been a privilege and an honor representing those who want to preserve and protect our beautiful community, and I thank them for putting their trust in me and the other attorneys who have worked so hard on their behalf.” Meanwhile, City Planning Director Shawn Winter said in a statement: “It’s great to hear that the city has found clarity on the building height issue and that the historical way of measuring buildings has been confirmed as provided in the zoning ordinance. This clarity is beneficial for the city, as it helps avoid any confusion or misunderstandings regarding building regulations and zoning laws.”

The Michigan Supreme Court Monday also declined to hear an appeal on the FishPass case, allowing the long-planned construction of an experimental fish passage system at the Union Street Dam to move forward. Last fall, the Michigan Court of Appeals determined a public vote is not needed for FishPass construction to proceed, rejecting a 2021 decision from Power.

Power had ruled in favor of Rick Buckhalter – a resident suing the city – agreeing with Buckhalter’s argument that installing a research facility at the park was a fundamental change in property use and would require a public vote to proceed under the city charter. The Michigan Court of Appeals rejected that argument, ruling that "the property continues to be used for valid park purposes under the project” and “there will be no meaningful deviation in the usage of the property as a park such that a vote of the electorate is necessary to execute the project.” Zelenock, representing Buckhalter in the case, said the Michigan Supreme Court “decision to deny the appeal is also disappointing, given the importance of parkland.”

An injunction has been in place since early 2021 prohibiting any work on FishPass, but that injunction is now lifted, allowing the city to begin site work on the property. City Attorney Lauren Trible-Laucht and City Director of Public Services Frank Dituri tell The Ticker that FishPass project partners – including the Great Lakes Fishery Commission, the U.S. Army Corps of Engineers, and contractor Spence Brothers Construction – are in negotiations to update project plans, including costs, contracts, and timelines. The construction contract was previously awarded to Spence Brothers for $19.3 million in 2020, but rising material costs and labor shortages have driven up expenses industry-wide since then.

Dituri says the project partners have already secured additional funding in anticipation of increased costs, but don't yet have a final updated price tag for FishPass construction. If it's higher than the raised funds, or if the city’s contribution will significantly increase, that will likely be brought to city commissioners for review. Trible-Laucht notes that the Michigan Court of Appeals ordered legal costs to be accrued against Buckhalter, which were on pause during the appeal but which Buckhalter will now have to pay. However, those costs won't cover the city’s full legal expenses, nor the increased cost of construction over the last three years, Trible-Laucht says. “That's the unfortunate cost of doing business, and it's really to the detriment of the public,” she says.

Both Trible-Laucht and Dituri say the city is moving as “expeditously” as possible to start construction on FishPass, with Dituri saying it can’t be ruled out that work could begin yet this year. In a statement, Traverse City Mayor Richard Lewis said the city is “committed to working closely with our partners to ensure the effective implementation of FishPass, and we are confident that this project will deliver significant benefits for years to come. We look forward to seeing the positive impact that FishPass will have on the Boardman/Ottaway River. ”