Traverse City Record-Eagle

Newsmakers 2009

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    WHITING HOTEL BUILDING
January 2, 2010

Newsmakers: Rejected Whiting plan stings

BY BRIAN McGILLIVARY

Editor's note: Newsmakers '09 explores the stories that made headlines in northwestern Michigan in 2009. Past articles in this series can be read online at record-eagle.com/newsmakers.

TRAVERSE CITY -- Bob Sutherland's "best Christmas ever" as owner of Cherry Republic doesn't erase the sting of Traverse City's rejection.

City commissioners in August voted down a plan that involved Sutherland and developer Gene LaFave renovating the downtown Whiting Hotel with millions in public dollars. Commissioners defeated the measure by a 4 to 2 vote.

The $7.4 million Whiting project was meant to create 27 affordable housing units and 11 low-income apartments around an expanded Cherry Republic store on the ground floor.

Proponents said the project would have created 190 new construction jobs and fit with The Grand Vision land use study that calls for public investment in city and village centers. Opponents questioned the large use of public dollars that eliminated 54 rooms for existing tenants.

"I'm still in shock that the city commission did not take value from the 14 different organizations and state and federal agencies that supported this project and turned against it on a whim," Sutherland said. "They didn't have any money in it, they just didn't agree in concept."

Project backers hoped to use energy efficiency and historic preservation tax credits, along with state and federal affordable housing funds and state business tax credits. The Grand Traverse County Land Bank Authority also proposed to capture more than $800,0000 in school property taxes to help finance a $2.65 million purchase of the building from a company headed by local real estate investor Michael Anton.

"It was way too much money for private development that wasn't going to be enough benefit for Traverse City residents," said Commissioner Barbara Budros, who voted against the plan.

Budros didn't buy proponents' argument that tax money should be grabbed because it didn't come from city coffers.

"That's why this country is in the financial mess that it is; everybody takes every dollar they can get and it ends up hurting someone somewhere in the long run," Budros said. "It's not a good argument to me, that if we don't waste it someone else will, and I'm not going to be a party to wasting public money."

City Commissioner Jim Carruthers, who also voted no, said he'd prefer affordable housing projects that are close to downtown, but not projects that create more units inside the downtown.

"The Whiting Hotel truly is currently affordable housing, even though it's not the best and maybe it's not the best place," Carruthers said. "I just don't know if real estate downtown ... is the best place to put affordable housing,"

The other no votes, Commissioner Deni Scrudato and Mayor Michael Estes, no longer serve on the commission. But Sutherland said after two years and about $100,000 spent on the project, there is no interest in taking the idea back to a new commission.

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