In addition to a proposed restaurant lease agreement for the Scalawags space on State Street, Traverse City commissioners will tackle a busy agenda tonight (Monday) that includes approving a payment-in-lieu-of-taxes (PILOT) agreement for Orchardview Apartments, certifying Traverse City Light & Power property on Cedar Run Road as surplus so it can be sold, accepting $300,000 in state grant funding for FishPass, and approving several city project contracts.

PILOT Agreement
Commissioners tonight will consider approving a PILOT agreement with the Traverse City Housing Commission (TCHC) to rehabilitate 21 existing family townhomes within the Orchardview Apartments on Carter Road and construct two new apartment buildings containing 30 units. 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.

TCHC is seeking a four percent PILOT agreement with a term of 45 years. The PILOT will generate approximately $26,800 in revenue the first year and is an “absolutely critical component for the financial feasibility of the proposed project,” including for securing additional funding through the Michigan State Housing Development Authority (MSHDA), according to Interim Assistant City Manager Deborah Allen. When complete, the buildout at Orchardview will include 14 one-bedroom apartments, 16 two-bedroom apartments, 16 three-bedroom townhomes, and 5 four-bedroom townhomes. All units are dedicated to tenants making less than 60 percent of the area median income (AMI) and must remain so for the 45-year duration of the PILOT.

TCHC is simultaneously seeking to rezone the Orchardview Apartments property from RC (Residential Conservation District) to R-3 (Multi-Family Dwelling District), which will allow for the new apartment buildings to be constructed. City Planning Director Shawn Winter previously said the rezoning was consistent with both the current and new draft master plan and the city’s goals of encouraging more affordable housing. City commissioners tonight will vote to introduce the rezoning change and schedule it for possible enactment on September 3.

At a recent planning commission meeting, several neighbors from the Morgan Farms development criticized the rezoning request, citing concerns about increased density and arsenic contamination in the Orchardview soil. Winter noted in a memo to commissioners that such contamination is common across the region due to arsenic previously being “widely applied to orchards.” In 2021, TCHC received a letter from the state “stating that due to the past remediation efforts, no further action was required and the site is safe for residential use,” Winter wrote.

Also at tonight’s commission meeting...
> Commissioners will vote to certify that property owned by Traverse City Light & Power (TCLP) at 4728 Cedar Run Road is surplus and can be sold. The nearly 50-acre vacant site previously served as a dumping pit for coal ash from the former Bayside Power Plant in the Open Space. Due to that contamination, only 33.5 of the nearly 50 acres are useable. Residents and community groups have expressed interest in seeing the property become a public park, but no bids were submitted when TCLP issued a request-for-proposals (RFP) from nonprofits or governmental entities. The next step is to make the property “available to any potential buyer while encouraging public engagement and partnerships,” according to a memo from TCLP Executive Director Brandie Ekren.

> Commissioners will approve formally accepting $300,000 in Michigan Department of Natural Resources Trust Fund grant dollars for park improvements as part of the FishPass project at the Union Street Dam site. The funding was announced in December 2020, but the disbursal of the funds was delayed due to ongoing litigation over the FishPass project. With the lawsuit resolved and construction underway, the city can now move forward with accepting the funding. Planned amenities include kayak landings both up and downstream of the new dam and a connecting rail between them, ADA-compliant boat landings, a step-stone access down to the river, new boardwalk, benches, trash bins, landscaping, and bike racks.

> Two projects that were pulled from the city commission’s August 12 agenda will appear on tonight’s agenda for approval. The first is a $1.75 million contract with FER-PAL Construction for a water main project on Division Street. The contractor will repair 3,400 feet of corroded pipe –a 12-inch main that is almost 50 years old – with a cured-in-place-pipe lining process. Another contract for construction management services is recommended to be awarded to the low bidder of Hubbell, Roth & Clark for $74,300.

Commissioners will also vote to approve a contact with Walton Contracting for just under $185,000 for improvements to the Hannah Park overlook at the southwest corner of the Union Street bridge. The existing overlook was damaged during recent bridge reconstruction, and the stairs down to the river are obsolete. Since they can’t be fixed up to ADA requirements and can’t be removed since they act as a stabilizer for the hill, the city plans to cover the stairs with soil and native plantings and build a new set of stairs near the Perry Hannah statue down to the river. Other planned improvements “include the removal and salvage of sidewalks, selective demolition of field stone walls, adjustments to existing features, and the installation of new elements such as clay paver bricks, concrete sidewalks, field stone wall veneers, railings, and wall reinforcement,” according to the city’s Bay Brief.

The project will be funded by the DDA’s Old Town TIF ($105,000), the Brown Bridge Trust ($12,000), and the capital improvement fund ($68,000). Project work is expected to start in the coming weeks and be completed by late fall/early winter, according to the Bay Brief.