Major workforce housing project on tap for Chum's Corner

Peter Kobs, The Record-Eagle, Traverse City, Mich.
·3 min read

Jan. 11—TRAVERSE CITY — A 192-unit rental housing development planned for Chum's Corner was the springboard for a passionate discussion about affordable housing.

Wallick Communities expects to break ground this spring on a project called "Corners Crossing Apartments." It will be located on 16 acres of land just west of the Chum's Corner intersection near the Stone House Bread store.

The project was discussed in detail during the county commission's study session on Wednesday.

Originally planned for 168 units, Wallick expanded the footprint to 192 units after acquiring additional acreage recently. The final cost will be significantly more than $30 million by the time construction is finished, according to company officials.

Rental rates for the new project are targeted at about 63-93 percent of the area median income. Based on current income levels in Grand Traverse County, that means about $1,100 per month for a one-bedroom apartment up to $2,140 per month for a two-bedroom unit.

Many government agencies use AMI statistics to determine where, when and how to fund below-market rate housing projects. The current AMI for Grand Traverse County is about $89,900 according to the U.S. Department of Housing and Urban Development. That means a household with two adults earning about $45,000 each would be at 100 percent of the AMI for this area.

Based in in New Albany, Ohio, Wallick specializes in developing and managing affordable rental housing and senior living communities. Founded in 1966, the company currently manages about 150,000 apartment units, primarily in the Midwest. The company already operates a large senior living community called "Meadow Valley" at 5143 N. Long Lake Rd. in Garfield Township.

Wallick uses a strategy called "tax credit harvesting" to reduce capital costs so it can afford to build below-market rate rental housing. That involves pursuing many types of federal, state and local financial incentives to supplement the loan money needed for construction.

"I think the Chum's Corner project is a perfect example of public-private partnership coming together for the common good," said Michael DiCarlantonio, Wallick vice president for development. "We rely on them and they rely on us to help meet the need for more affordable housing in Grand Traverse County."

To help support the Chum's Corner development, Wallick received a $1.5 million ARPA grant from the county in late 2022. That money came from a pool of $18 million the county garnered through from the federal American Rescue Plan Act, which passed in March 2021. Another source of money for the project comes from a "missing middle" grant from the Michigan State Housing Development Authority. MSHDA granted $5 million for the Wallick project to help offset construction costs.

The Missing Middle program uses ARPA funds funneled through the state "to increase the supply of workforce housing to support the growth and economic mobility of employees," according to the MSHDA website. It specifically targets projects that benefit households in the 60-120 percent AMI range.

Financing below-market rate housing on a deadline is a major challenge in today's economy, said DiCarlantonio. Higher loan interest rates and rising construction costs can change the calculus from month to month. That's why pursuing tax credits and government incentives is so crucial to planning, he explained.

Wallick also applied for a PILOT property tax abatement from Grand Traverse County for the project near Chum's Corner. If received, it would cost the county about $20,000 in reduced tax revenues per year for the next 15 years. The status of that third piece may influence Wallick's ability to get other tax credits and grants, which are linked to strict, specific deadlines.

Managing such a big project while juggling different timelines and requirements can be a "very, very challenging process," said DiCarlantonio.

"I've been in real estate development for quite some time. Usually, when a groundbreaking is 90 days out we have all of the major elements in place. This project is definitely keeping us on our toes."