City OKs tax deal for Garfield Ave. apartments

Sep. 23—TRAVERSE CITY — A developer planning affordable apartments on Garfield Avenue in Traverse City will get a tax break from the city.

But Woda Cooper Companies will have to work out where the 53-unit apartment building's driveway will be. City commissioners recently approved a 16-year payment-in-lieu-of-taxes agreement that would allow the developer to pay 6 percent of rents minus the cost of utilities for common areas instead of property taxes.

City staff recommended the apartment building, to be built on the east side of the road across from Kinross Street, should use a neighboring property's driveway instead of building a driveway to Garfield Avenue.

David Sutton, president of neighboring Galleries on Garfield condo association, said he was angry that the city wanted to force the property to allow access to a new development, without notifying the association.

Not only is the drive city staff suggested not designed to handle that much traffic — there's no left-turn lane, he said — but Sutton feared a driver heading to the apartments could hit a child coming from the dance school near the driveway, he said.

"If you vote for 'alternative A,' the city is going to be directly responsible for the accident that is going to happen," he said. "Collisions between vehicles and young children do not end well."

Sutton referred to the first two proposed site layouts presented to commissioners, the second of which showed a driveway for the apartments on Garfield Avenue and the first, a connection to a short drive south of the proposed apartment site called Gallery Court.

Mayor Jim Carruthers said he favored a connection through the neighboring property instead of adding another curb cut to Garfield Avenue. That was the intent of a planned unit development there and part of an overall goal for future development along the corridor, he argued.

But Commissioner Ashlea Walter said she's familiar with the drive being suggested, as her daughter takes classes at the dance school.

"While I love the idea of one curb cut, it is going to pose a lot of challenges with the amount of traffic going in and out of there," she said, adding a possible solution could be expanding the driveway.

Commissioners ultimately agreed to approve the PILOT without specifying where the driveway should go.

Commissioner Brian McGillivary said he was unsure why the city would determine the location at that point, as the planning department or commission has yet to decide on a site plan for Woda Cooper Company's project. That review is likely to be some ways off — company Senior Vice President of Development Craig Patterson said the building should be done by spring 2024 — and the site plan is almost certain to change from the conceptual drawings in the PILOT application.

Of the 53 apartments proposed, 34 would be for renters making up to 70 or 80 percent of Area Median Income, Patterson said. Rents in those 34 would range from $880 per month to $897 per month for a one-bedroom, up to $1,050 or $1,075 per month for a two-bedroom, depending on income level.

Those rents, and the building's proximity to U.S. Coast Guard Air Station Traverse City, aim to provide housing options for the coast guard's lowest-ranked enlistees, from E-1 pay grade to E-5, Patterson said — those grades correspond to ranks of seaman recruit up to petty officer second-class, according to the Department of Defense.

But the apartments wouldn't exclusively be for those in the Coast Guard, Patterson said.

That was good news to Mayor Pro Tem Amy Shamroe, who noted service industry employees can struggle to find housing but make too much to qualify for affordable rentals limited to people making 40 to 60 percent of Area Median Income.

The rest of the building would be aimed at renters making 30 percent of Area Median Income, with rents of $345 per month for a one-bedroom and between $416-426 for a two-bedroom, Patterson said.

Walter asked about assurances that the apartments would remain affordable. That would be a term of the property deed, and something that not only Woda Cooper Companies' investors would enforce but the Michigan State Housing Development Authority as well, Patterson said. The developer will seek a Low Income Housing Tax Credit from the housing agency.

The deed would specify that for 45 years, the property must be used for affordable housing, as defined by Section 42 of the Internal Revenue Code, Patterson said. Should Woda Cooper Companies ever back out of that agreement, it could be disqualified from future developments in the state.

Woda Cooper Companies could ask the city to renew its PILOT at the end of 16 years, Patterson said.