Thursday, December 10, 2015

Traverse City's Growing Pains: Big Buildings in Traverse City

This past summer, my wife and I recently took a trip back to my homeland of Michigan. We flew directly into Traverse City, Michigan. It's one of the most beautiful and vibrant small cities I've ever visited. I've been there many times, doing what southern Michiganders do in the summer: going up north. This past summer we stayed on Old Mission Peninsula, just outside Traverse City, and it was fantastic. I recommend the area to anyone who wants to see sparkling blue water, hike some dunes, drink good wine and cider, and swim in the cleanest fresh water around. It's not my intent to push Traverse City as a travel destination though. I'd want more of your time to do that. Trust me, just visit, and you'll love it.

What's more important right now is that Traverse City is in an identity crisis. The city is being forced to see itself as something it hasn't in the past. Instead of a tourist town, it's now becoming a permanent (or semi-permanent) home and regional commercial and business center. People want to live there, not just spend a few months in the summer there, or visit for a weekend.

It's a foodie town now too. Terms like "gastronomic tourism" are a thing, and it's a primary force in overall tourism, alongside recreation. Traverse City has taken cues from larger cities like Portland and Austin, and has grown a healthy arsenal of food trucks. Given the variety of fresh produce available in the area, summer menus for these trucks, and brick and mortar restaurants, must be great. Even Food Network chef Mario Batali now annually vacations in the area. This wasn't something that would have been predicted in Traverse City 10 years ago. Years ago people from southern Michigan flocked to Traverse City just to get away and swim. Now people from all over come for much more.

It's undeniable in summer as to how popular the city is for seasonal vacationers. The streets are busy with people walking in Downtown Traverse City. There are a number of new restaurants and shops (I'd highly recommend Brew Coffeehouse and Cafe). People are biking everywhere (on the TART trails; Get it? Cherries, tart?) and the beaches and parks (Clinch Park) surrounding Grand Traverse Bay are as busy as ever. But as my wife and I drove around, there were a number of apartments and mixed use projects being built, especially around the western edge of the city's downtown district. I don't know that Downtown Traverse City has seen this sort of development interest in the near-past.

But now, it seems that the interest in Traverse City has pushed the limit of some. Back in August, the Traverse City Planning Commission voted to grant a special use permit that would allow the 9-story, 96-foot tall, two building, River West mixed use development at 305 West Front Street to be built. Residents filed petitions and pushed for Traverse City to put the issue to a referendum vote. Unfortunately, a 2006 Michigan law within the Michigan Zoning Enabling Act prevents that from happening. Judge Philip Rodgers, of Michigan's 13th Circuit Court, ruled early on Monday that "...all counsel agree that a municipal zoning ordinance such as Traverse City’s cannot be amended by citizen initiative." His opinion closed with "The plaintiffs’ hope to delete buildings of a height greater than 60 feet from the zoning code at this time can be accomplished neither by initiative nor referendum."

Following that decision led to Monday night where the Traverse City City Commission heard public comment until 12:45 AM local time early Tuesday morning. I can't wait to see a video or transcript of that meeting! (view the entire meeting here, thanks to Up North Media Center). The City Commission voted 5-2 to approve the special land use permit. Northern Michigan's 9 and 10 News has a recap of the hearing here.
A rendering of the River West proposal

The property in question on Monday night was one that is zoned C-4c (Regional Center District, Chapter 1346), which allows for 60 foot buildings by right. The zoning ordinance allows for buildings up to 100 feet in this zone, as long as 20 percent of the building is used for dwellings. At minimum, buildings in any C-4 district must be at least 30 feet tall. (See Chapter 1368 for the city's size and area requirements.) The zoning ordinance also details many site plan and design guidelines, so residents can be given a reasonable expectation as to the design of the structures, unlike here in Houston, where an architect's imagination can run wild in the absence of a citywide zoning ordinance (unless you're in a historic district).

The site of River West is highlighted in red.

The River West site is also within the downtown neighborhood as detailed in the city's master plan, focusing on high intensity, regional and commercial activity. River West plans to have 162 dwelling units above 20,000 square feet of street-level retail. I'd say it meets those descriptors. As this was a special land use permit, the City Commission had to consider the standards for approval that are found in Chapter 1364 of the City of Traverse City Zoning Ordinance. The decision of the City Commission is final and cannot be sent back to the city's Zoning Board of Appeals. Of course, there is always the outside chance that there may be legal challenge ahead.

The zoning map of Downtown Traverse City
When I first heard about this case, it was reminiscent of the Ashby high rise case here in Houston. The development of the Ashby high rise is on a much larger scale than River West, and frankly, not nearly as noxious, as the Ashby high rise would be built adjacent a single family neighborhood, well outside any major activity center. In Houston, without a zoning code, it's not uncommon to find buildings that are completely out of character to their surroundings. But, like in the case of River West, that sort of development is allowed by city codes. Houston's building and development codes do not contain any sort of height restrictions, but do maintain other development rules.

Back in Traverse City, River West will provide the area with workforce housing. Now, don't confuse this with what many people know as affordable housing. This is not a government housing project, but housing that is intended to be affordable to those who are working retail and seasonal jobs, which make up a large part of Traverse City's economy. Developers say that 64 of the units will be affordable workforce housing serving workers earning between $8 and $17 per hour. "The workforce housing units will be priced to be affordable to downtown workers earning $10-$15 per hour, with estimated monthly rental prices ranging from $557 to $784.  The workforce housing element is pledged for a minimum of 45 years." The State of Michigan only requires workforce housing agreements to be a minimum of 15 years, so an additional 30 years provides a predicable number of workforce housing options for Traverse City residents. The hope would be that a number of other developments are built to complement River West.

I'd expect increases in those rental rates over the years, but the allocation of workforce housing, when not mandated by ordinance, is admirable, especially considering the growing rental rates in central cities over the last number of years, and that most new rental housing is built for those with greater incomes. I'd expect the workforce rates to increase as time goes on. I'd be interested to know what standard the developers are using to define their rental rates as "workforce", and what costs they will need to recover through the market rate units in order to make up for the workforce housing prices.

As someone on the outside, it's interesting to note in this case it's not outside investment companies coming into a city and turn some dirt and rake in cash. The project team has established relationships with business owners, employees and residents of the city. They communicate a desire to provide for those who might be moving to Traverse City to start careers. Erik Falconer, a life-long area resident, owns a local family wealth advisory company. (Interestingly, he is a brother of Ben Falconer, a former pastor of the church I attended while at Michigan State University.) Falconer penned a recent opinion in the Traverse City Record-Eagle advocating the approval of River West's special land use permit, noting that "Great towns and cities are not static — they constantly change. The character of our city is not just about its buildings. It is about its natural resources, open spaces, and most importantly, its people. And a diverse mix of people living and working in downtown Traverse City will continue to keep our city great."

A street view of West Front Street today
A view of West Front Street with River West
In an information video about the project, developers provide testimonies from business leaders who support the project, which at the end of the video is billed as "Vertical, Viable, Vibrant, Diverse". The vertical nature of the building allows more people to live near the city;s job center, adding to the city's vibrancy. And, to be honest, on my trips to Traverse City, I've not ventured much past North Union Street, as a number properties are parking lots. This, of course, is changing. It's interesting to note that the River West project does not require parking, but will provide 177 parking spaces, and a number of bicycle racks.

Traverse City's BATA provides transit to the area, and BATA's Hall Street Station is about a 0.2 mile walk from the River West development. This provides residents an opportunity to travel without a car, although I would be skeptical of higher income residents using public transit given the frequency of trips in Traverse City. Without a grocery store or affordable general retailer close by, (think clothes, home goods), residents, especially those without disposable incomes, will still need to complete car trips. I wonder if this is a perfect opportunity for the developers to consider a car-share system, such as Zipcar.

As with many other resort towns and cities that rely on agritourism, maintaining the surrounding area's natural physical beauty and resources are very important. Providing affordable housing in the center of the city (especially on a vacant lot) helps to partially lessen the need for apartments on the outskirts of town, in what would likely be sprawling greenfield development. Traverse City residents have repeatedly noted their desire to protect their natural landscape, and rightfully so. It's vital to the city's economy.

Some in Traverse City may see a city that is falling victim to its own success. As travel and tourism demands change, it is difficult to predict development pressures. It is a lesson to smaller cities and towns that their zoning and building codes and planning guidelines likely provide for many more opportunities to build large buildings than the general population would imagine. (If you take a look at Traverse City's zoning map, any property in the C-4b, C-4c, D, GP, NMC-2 or H-2 districts could possibly be developed with buildings anywhere from 30 to 45 feet, and in some cases, up to 100 feet, as in C-4c areas.) I would certainly not be an advocate of modifying the ordinance at this point to eliminate any chance of a building being more that 60 feet, as these are only approved by special land use permit, and will likely be the exception to the rule.

The age of these ordinances are relatively new when compared to the settlement of a city, and I wonder if this is now the time to make a wine analogy. Traverse City might be in one of these times where a winemaker is toys with the composition of a wine. As wine ages, different tastes and experiences are noted. A more complex taste may result. The more refined the taste and experience, the more people want it. There is a greater demand. Just ask many of the area's wineries and cideries. It's no different with an urban experience. (If we're talking about wine, let me quickly recommend Traverse City's Left Foot Charley urban winery in the redeveloped The Village at Grand Traverse Commons for some of their Riesling, or a bottle of their Cinnamon Girl cider. VerterraChateau Grand Traverse and Forty Five North are other favorites.) It will take different projects for the public to engage in a conversation to answer questions like "how tall is too tall?"

In many cases, cities already have ordinances that would allow someone to build something that might seem out of scale or character. It just takes someone with enough capital to do it. It's not an "if?" question, but a "when?" question. The question of "if?" has passed in Traverse City. Now, residents will await the answer to "when?"

Left Foot Charley in Traverse City's The Village at Grand Traverse Commons
Tandem Ciders, north of Traverse City