Traverse City Record-Eagle

Our Views

EDITORIAL

The issue: City may lose a bit more on depot property sale

Our view: It's still a great deal

Related story: Terms change for depot property deal

February 3, 2012

Traverse City should embrace affordable housing plan

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If a developer approached Traverse City officials and said he would build 21 affordable housing units and some commercial development at the old depot property and it would cost just $20,000 more than commissioners thought it would, they'd be crazy not to say yes.

In essence, that's where the city finds itself right now; the only question is why not embrace a new financial arrangement that could help make a long-sought affordable housing project a reality.

Last year the city, Habitat for Humanity-Grand Traverse Region and HomeStretch Nonprofit Housing Corp. worked out a deal for the two groups to buy the 2.5-acre site near Woodmere Avenue and Eighth Street and build a number of affordable housing units.

The city had long tried to find an appropriate buyer for the site, which has an estimated market value of $610,000, but had failed. Under the deal the nonprofits would pay the city $280,000, plus 10 percent of the sale of eight "market-rate" units (not part of the affordable housing package) on the property's east end. The city was expected to get about $30,000 from those sales.

Now, the nonprofits have come back to say they have run into higher costs for infrastructure work than they expected and a hard time attracting developers. They proposed a new plan under which Habitat and HomeStretch would build 21 affordable homes and sell about an acre on the east end to Martin Lagina, who owns adjacent property. The city would receive 10 percent of that land sale, or about $10,000.

In the end, the city would get $20,000 less than expected and there could be some commercial use of the site.

If that means the city will get 21 affordable homes — HomeStretch plans to build a dozen three-story townhomes and Habitat nine two-story homes — plus some commercial development, the city should absolutely agree.

Coming up $20,000 short on the sale of the property won't mean a thing in the long run. Even if the commercial property is used by nonprofits, as one plan calls for, the city would still collect a "service fee" equal to the current tax levy.

Again, if the city could guarantee 21 new affordable housing units for $20,000, it would take the deal in an instant. The city and other local governments, plus a host of non-profits, have tried mightily over the years to provide more housing for the hundreds of workers who keep tourism-related businesses going but who could never afford to live here. This is a wise investment in the local economy and in the people who keep it moving.

Jump at the chance.

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