TRAVERSE CITY — City commissioners began setting the direction Tuesday for six publicly owned parcels on the west side of downtown, kicking off a process that could bring a mix of structured parking, workforce housing and commercial space to a key block near West State and Pine streets.
The commission did not take a formal vote but reached clear consensus on several points: the project must include public parking, it should deliver workforce or attainable housing with long-term affordability protections, short-term rentals should be banned outright from any residential component, and the development should include publicly accessible restrooms on the west end of downtown.
The city spent approximately $7.6 million in parking fund dollars to assemble the properties, which were originally intended for a public parking garage. The Downtown Development Authority pursued that goal for years, commissioning a design in 2023 that paired roughly 56 residential units with 534 parking spaces and ground-floor retail. The DDA ultimately set the project aside, and management of the parking system transferred to the city.
A private developer, ShoreNorth Development, pitched its own version of the project to the commission in December, proposing workforce housing at 80 percent of area median income along with 534 parking spaces, one-third of which would be public. The firm asked for the land at a nominal price and requested either a tax abatement or a payment-in-lieu-of-taxes arrangement. Commissioners opted in January to pursue an open public process instead.
One commissioner called the properties a generational strategic asset and argued the city should retain ownership through a ground lease rather than sell outright, preserving flexibility for the future. That approach would also sidestep the question of whether the city’s parking fund must be reimbursed for the $7.6 million spent acquiring the land. The city treasurer has said reimbursement is not legally required under governmental accounting standards but would be a strong recommendation to keep the parking fund whole.
Several commissioners raised the question of how to protect the workforce housing component over time. One suggested tying affordability requirements to the length of a payment-in-lieu-of-taxes agreement and deed-restricting the property against conversion to condominiums. The consultant said that linking housing restrictions to a PILOT incentive makes sense from a developer’s perspective because once the incentive period ends, the property becomes a market-rate asset that could be sold.
Commissioners also said the project should not be limited strictly to the six parcels. One asked whether the RFP could encourage developers to incorporate nearby vacant or underutilized properties into a broader parking and housing plan, rather than taking a piecemeal approach that could scatter small parking structures across the west side.
The city’s recently adopted strategic action plan identifies at least five objectives relevant to the effort, including managing urban design to protect local character, building the year-round downtown population and exploring new revenue from the tourism economy. One commissioner asked that the strategic plan be explicitly referenced in the RFP so developers can align their proposals with the city’s broader vision.
Adding urgency, an $800,000 state environmental assessment grant held by the DDA has been partially spent and expires at the end of August. The consultant noted there are options to amend or transfer the grant to another property, but delay carries risk. Multiple west-side projects are also actively seeking parking, creating a window the city could miss.
Business operators along State Street offered mixed reactions. One said the perception that downtown lacks parking discourages visitors but called the problem partly one of awareness. Another, whose business sits beneath short-term rental units, said structured parking would help tourists feel confident they have a place to leave their cars overnight during peak season. A third, who has operated downtown for nearly five decades, was more skeptical, saying most people prefer pulling into a surface lot to navigating a garage.
The consultant told commissioners he had enough direction to begin drafting the RFP with the city’s design team. A draft is expected to come before the commission for approval at the March 16 meeting, with developer proposals due in May and a potential approval vote in June.