TRAVERSE CITY — Affordable homes remain part of a proposed development for city-owned property near the railroad depot.
But terms of the land deal with two local nonprofits have changed for those groups' benefit.
Traverse City officials last year sketched out a plan for Habitat for Humanity-Grand Traverse Region and HomeStretch Nonprofit Housing Corp. to purchase a 2.5-acre lot near the corner of Woodmere Avenue and Eighth Street. The city struggled for years to find a buyer for the property, where commissioners want to spur affordable housing. The property has an estimated market value of $610,000.
An original proposal called for the nonprofits to pay the city $280,000, plus 10 percent of the sale of eight market-rate units on the property's east end. Officials estimated the city's portion would generate an additional $30,000.
That deal has been slow to close. The two nonprofits returned to the city commission this month to ask for new terms, citing unexpectedly high costs for infrastructure work and difficulty attracting developers to build the market-rate houses.
"We knew it was going to take time," said William Merry, HomeStretch's executive director. "Given the economy in this state, we've made a lot of progress in lining up ... support."
Plans call for 21 affordable homes
The new terms, accepted with reluctance by some commissioners, call for Habitat and HomeStretch to build 21 affordable homes. But the eastern portion of the site could be sold to Martin Lagina, who owns adjacent property, Merry said. The city would receive 10 percent of that land sale, or about $10,000.
The new proposal means the city would receive about $20,000 less for the depot property than expected, and that the roughly one-acre eastern end could be developed for commercial use instead of more homes.
City Commissioner Jim Carruthers said that isn't reason enough to back out of the sale. He said new terms are "substantially similar" to the original proposal, and he's willing to give the nonprofits a chance because the project still provides affordable housing.
"We're lucky to have people out here willing to develop in this town," Carruthers said. "We've gone through several, several developers on this piece of property; not everything works the way we want it to and these folks have been hard-working."
Merry said HomeStretch plans to build 12, three-story townhomes and Habitat will construct nine, two-story homes on the rest of the depot property. HomeStretch aims to keep its three-bedroom, arts-and-crafts-style townhomes around $100,000 each, and owners will need to meet eligibility requirements for affordable housing. The agreement with the city will require five of the 21 homes to be built by Sept. 30, 2014.
Several commissioners raised concerns about how long it has taken to hash out a deal, changing finances and conditions, and the potential for a large, commercial development on the site.
Employees want child-care opportunities
One possible use for that eastern portion of the site is a child-care center to serve 100 young children. The Great Start Grand Traverse Bay/Manistee Collaborative wants to meet the needs of downtown employees, as well as provide training for students pursuing early childhood careers.
Great Start Coordinator Mary Manner said the building also could house early childhood professionals to make it a "one-stop facility" for parenting resources.
Affordable, quality child care remains a top need in the area, and a survey of downtown employees found 60 percent would like child care available near their workplace, Manner said. The depot property is near businesses, neighborhoods, the library, TART Trails and parks.
City and nonprofit officials said there is no guarantee that a portion of the property would be used for a future child-care center. Zoning allows numerous commercial and residential uses. City Manager Ben Bifoss said terms of the deal would allow the city to collect a "service fee" equal to the current tax levy if that property is ever owned by a nonprofit, tax-exempt entity.
Bifoss will work to finalize the purchase agreement language in the next 30 days, and the city commission must give final approval to sell the property.
