BY BRIAN McGILLIVARY
TRAVERSE CITY -- Grand Traverse County will use its borrowing power to help private developers build affordable housing, starting with the downtown Whiting Hotel project.
The county board voted 5 to 3 to approve risking approximately $1.6 million in principal and interest payments over 27 years to help developer Gene LaFave purchase and restore the Whiting Hotel on Front Street.
The $6.5 million project is intended to restore the 1893 building's exterior to its original look, make it energy efficient and create up to 27 affordable and 11 low-income apartments for downtown workers.
The county's land bank authority will sell $800,000 worth of bonds and pay them back over 27 years by capturing all school taxes on the property. Interest will add another $800,000 to the cost.
"It's an expensive project and a large commitment of public dollars," said county Commissioner Addison Wheelock Jr. "The fact remains if we have a commitment to provide affordable housing in our downtown area, it's going to take a commitment of public money, because there's no developer in the world who's going to come in and spend that kind of money and rent (apartments) for $500."
Some commissioners opposed to the county's financial involvement accused project proponents of having "mis-catagorized" finances by listing $937,000 in federal historic tax credits as private, not public funding.
"That was curious math, to say the least," said county Commissioner Ross Richardson, who estimates 46 percent of the project will be publicly funded.
"It's big dollars and not very many (low-income apartments)," Richardson said. "If the point is to provide more affordable housing to more people, then there must be a more efficient way."
The board's vote also gave the land bank authority a green light to pursue similar projects backed by county credit, an expansion opposed by Richardson and Commissioner Christine Maxbauer.
"Just because Grand Traverse County has an excellent credit rating, we should not be bonding every project that comes before us," Maxbauer said. "That's how we got the septage plant."
The county's septage treatment plant faces $2.4 million in losses by 2014.
The Whiting project plans will return to the county board for final approval when it's time to sell the bonds.
Whiting bond vote
Grand Traverse County commissioners voted 5 to 3 to approve in concept a plan to sell $800,000 in county bonds to help purchase the downtown Whiting Hotel for redevelopment.
Voting yes were: Addison Wheelock Jr., Beth Friend, Larry Inman, Bruce Hooper and Michael Stepka.
Voting no were: Ross Richardson, Christine Maxbauer and Larry Fleis.
Board chairman Dick Thomas was absent.
