The developer behind a proposed 149-unit workforce apartment complex on US-31 just north of McRae Hill Road will appear before the Grand Traverse Brownfield Redevelopment Authority board today (Thursday) to seek brownfield reimbursement for the project. Garfield Township trustees Tuesday supported the reimbursement request, which will next go to county commissioners in May if it receives BRA support. Meanwhile, another workforce housing project – this one on LaFranier Road next to the new BATA headquarters – was approved for $12 million in state financing this week, paving the way for construction to start this summer.

Gauthier Property Development
Development group Keel Capital hopes to use new Michigan rules that allow brownfield tax increment financing (TIF) to help fund workforce housing projects to underwrite a new apartment complex at 2105 N. US-31 South – the Gauthier property directly north of McRae Hill Road.

Keel Capital could invest $35 million into redeveloping the property, including removing existing buildings, conducting site preparation work, and constructing three buildings with 149 rental apartments (rendering, top). Keel Capital previously considered constructing four buildings with 154 units but scaled back plans – including moving the building locations further away from US-31 – after receiving early feedback from Garfield Township planning commissioners. The revised plans will also allow for more green space and better stormwater controls on the site, developer Will Bartlett told township trustees Tuesday.

Keel Capital could be reimbursed for just over $10 million in expenses – including $263,000 for environmental clean-up and $9,746,575 for housing – over a 20-year period through brownfield TIF capture. As part of the proposal, rents for all apartments would be capped at 100 percent of the area median income (AMI). In order to qualify for annual reimbursement, Keel Capital will have to send its rent roll to the Michigan State Housing Development Authority (MSHDA) every year, Bartlett said. If rents go higher than 100 percent AMI, the developers won’t be eligible for reimbursement – a structure Bartlett said ensured developers would be held to the promised rental rates.

The TIF capture works by capturing rising property values on the site over time to reimburse developers for expenses incurred by investing in blighted properties – or in the case of housing, capping rental rates at a set AMI level (instead of maximum market rental rates) to provide workforce housing.

“This program is great particularly for municipalities, because it captures the state taxes,” Bartlett told township trustees. About 61 percent of the overall reimbursement will come from captured state taxes, he estimated, with 12 percent from Garfield Township and the remaining amount from Grand Traverse County and other local taxing jurisdictions. The Traverse City Area Public Schools (TCAPS) and Rec Authority debt millages are not subject to capture, nor is the township’s fire special assessment. After the brownfield obligation is met, the apartment complex will generate an estimated $769,500 in annual property taxes, according to the brownfield application.

Grand Traverse BRA representative Anne Jamieson told township trustees that staff had worked with Keel Capital for several months on the financial analysis for the project, adding the proposal was “fully vetted” and in line with MSHDA housing TIF guidelines. Township trustees Tuesday unanimously supported the reimbursement proposal, which must now obtain BRA support before heading to county commissioners for final sign-off on May 15. “We're really excited about trying to deliver this desperately needed workforce housing to the township and to Grand Traverse County,” Bartlett said.

Flats at Carriage Commons
Construction on the first phase of The Flats at Carriage Commons – a Traverse City Housing Commission (TCHC) workforce housing project planned for LaFranier Road next to the new BATA headquarters – is scheduled to begin this summer after $12 million in state financing was announced for the project this week.

The development (rendering, bottom) was approved for a loan totaling $12 million funded by Limited Obligation Multifamily Housing Revenue Bonds, according to a MSHDA release. Just over $23 million total in a combination of state funding sources has been lined up for the project. The Flats at Carriage Commons is eventually estimated to have 210 units, with phase one covering construction of the first 48 units – including 16 accessible units. “Twenty-one units will be reserved for tenants at or below 70 percent of AMI, 19 units will be reserved for tenants at or below 60 percent of AMI, and eight units will be reserved for tenants at or below 30 percent AMI,” according to MSHDA.

Construction is planned to start this summer, with the first units potentially ready for occupancy by summer 2025. TCHC said in December that phase one will include two three-story buildings, a clubhouse, and a playground. Phase two will include a four-story building. Phase three will include a three-story building, while phase four will include the final four-story building. All four phases feature a mix of unit sizes. Fifteen single-family homes – managed through a separate project partner – and a childcare center and café/neighborhood commercial building are also planned for the property.

Jake Zunamon of project partner Smith & Henzy Affordable Group says the timing of future phases of construction will be subject to funding. “We are working on it,” he says. Zunamon adds that the project partners are also “ready to secure a commercial tenant and daycare tenant as we get this infrastructure” built on the property.