TRAVERSE CITY — Sprawling, old Building 50 at The Village at Grand Traverse Commons wasn't Bob Jacobson's first choice for an affordable-housing project.
But it turned out to be a good one.
Jacobson's effort is dubbed 630 Lofts, a 39-unit, low-income housing venture that will consume about 40,000 square feet of Building 50 at the former state hospital grounds in Traverse City.
Rental units are expected to range from about $500 to $700 per month, including utilities, and should be ready for occupancy in August. The idea intrigues Cara Nader, who works at Cuppa Joe Cafe in the Commons.
"I've already considered living here, and that would be a big deciding factor," said Nader, 25. "There's not much in the way of decent affordable housing in Traverse City, and it would probably be pretty nice if it was in here."
Jane Garrett works at Gallery 50 in the Commons. She's set for housing but thinks the idea of adding affordable units at the Commons is an "awesome idea."
Her daughter works at the nearby Grand Traverse Pavilions, and Garrett believes there's plenty of nearby employees who could make use of affordable housing there.
"If not here, then definitely Munson employees," she said.
Delays over, construction begins
Developers closed on Jacobson's estimated $13 million project in November. Construction is under way after months of delays, in part due to national economic tumult and challenges lining up various state tax credits to help finance construction.
Jacobson also is president of Leelanau Wine Cellars in Omena. He and his father, Michael Jacobson, built a dozen affordable housing projects in Detroit, Muskegon, Petoskey, Cheboygan and elsewhere since the early 1990s.
Jacobson said he sought a site in Traverse City for several years. He met with city officials two years ago about the depot property off Eighth Street and also studied land along Boardman Lake.
"Nothing really fit with what we wanted to do," he said.
Jacobson met developer Ray Minervini at the site, and plans took shape as investors learned more about Minervini's efforts to transform the once-decrepit hospital site into a mixed-use jewel.
"Everybody liked the project," Jacobson said. "They were all intrigued by it. It had a cool appeal that was definitely off the charts."
Minervini said a low-income housing project fulfills part of his long-range vision for the former state hospital grounds by adding a lower-cost residential component.
"The goal from the beginning was to make this a project for everyone," Minervini said. "Having that diversity is something we've been striving for ... it's the people who work here who are going to be living here."
Lawrence Pfeifer lives in the Commons now, and he's excited about the affordable housing idea. There's a need, he said, and more uses help preserve historic buildings at the site.
"These guys really want to do something to help people, and everybody here is into it," Pfeifer said of Jacobson and Minervini.
Working class digs
The Commons currently boasts 62 housing units built for individual ownership that Minervini developed, and range from million-dollar luxury condos to small spaces in the $80,000 price range. Nearly all are sold, Minervini said, adding that the market is stronger for lower-priced units. He expects significant demand for Jacobson's apartments.
The new housing will be spread across three floors and the attic in the north wing of Building 50. Units will range from about 500 square feet for single and studio apartments, up to 1,600 square feet for a two-bedroom unit. Ample building space will allow for a variety of floor plans, Jacobson said.
Monthly rents will range from roughly $500 for efficiency apartments and $530 to $590 for one-bedroom units, to $641 to $712 for two-bedroom apartments. Rent includes all utilities.
A renter's annual income is limited to 45 to 50 percent of the area's median income, in the $20,000 range for a single person and up to around $30,000 for a family of four.
The state also requires 10 percent of the housing, or four apartments, be designated for special-needs residents.
And residents will reap benefits of the Commons' designation as a state Renaissance Zone, which waives state income and other taxes for residents and businesses. The Renaissance Zone continues through 2017.
The state approved various tax credits for the Commons a year ago. Public incentives include an $8 million, low-income housing tax credit through the Michigan State Housing Development Authority, and $4 million in historic redevelopment tax credits.
Royal Bank of Canada and John Hancock Life Insurance Co. purchased large chunks of the tax credits and provided a big financial boost, Jacobson said.
"You can't get there by just building cheap," Jacobson said. "You've got to take advantage of affordable-housing programs."
Minervini called the project a milestone because it's the first new development in the north wing of Building 50, once the women's section of the former state hospital building.
Jacobson's work will take up a full section of Building 50 and consume about one-eighth of the massive 400,000-square-foot structure.
"We feel fortunate to be part of this community," Jacobson said. "It's a unique and special place."
