Coming to a watercooler near you, Newsmakers for 2018
See the January print edition for the entire What to Watch list, written by Ross Boissoneau, Lynn Geiger and Rick Haglund.
After years of assembling land, getting various governmental approvals and lining up brownfield cleanup money, it appears construction on Patti Mercer’s Grandview Place mixed-use development (marketplace pictured) will start this year.
But a second much-awaited project in the Warehouse District – DargaWorks’ Warehouse Flats mixed-use development that would have included 154 apartments – could be in jeopardy.
A December Facebook post by DargaWorks said “ … we will let you know if and when [Warehouse Flats] does go through. We simply do not have all the pieces of the puzzle in place.”
DargaWorks owner Thom Darga could not be reached to comment. Realtor Dan Stiebel, who has been handling sales and leasing for the project, said in a text message that he “can’t comment on the property at this time.”
City Planner Russ Soyring said he hasn’t heard anything from Darga about ending the project, but has received inquiries from other parties expressing interest in the property.
Failure of the project would be a blow to efforts in developing the emerging Warehouse District.
But Mercer said she hopes to start the demolition of buildings on her property and the environmental cleanup work needed before construction of her project can start.
“We’re moving forward on all fronts,” she said.
The three-story building will contain 48 condominiums, a marketplace with 33 specialty food, fresh food and retail vendors and three restaurants. The rooftop will contain space for a coffee shop, wine bar and small-plates restaurant.
“It will be an elegant venue,” she said.
Condominium prices will range from about $375,000 to about $900,000.
The $41 million project will be financed with a mix of private investment and bank loans. Mercer said she is currently reviewing financing offers from several banks.
Groundbreaking is expected in the spring with anticipated completion in the fall of 2019, she said.
One of the biggest topics of discussion in local real estate circles is whether there are too many condos being built. And if there is a condo bubble, will it someday burst?
While even some condo developers say the market seems a bit oversaturated, most say the increasing popularity of the Traverse City area as an attractive place to live and demographic shifts favoring urban living should keep the condo market healthy.
Developers and real estate agents who specialize in condo sales say the market remains strong, particularly for units in the $250,000 to $500,000 range inside the city limits of Traverse City.
Bob Rieck of Coldwell Banker Schmidt Realtors, who works as the condo sales agent for Socks Construction, said he sold all 32 units of the Capri development (pictured) in Old Town before any of them were listed.
“I basically sold all 32 of them from my deer blind,” he said.
Rieck also recently sold 56 units in the North Wind and Crystal Cove developments on Boardman Lake, and said he could have sold twice that number had they been built.
Those units were priced in what Rieck called “the sweet spot” of $350,000 to $400,000. He said he’s having a more difficult time selling several units in the Radio Centre III project in downtown Traverse City that are priced in the $600,000 range.
Mike Wills, project manager for Uptown Riverfront & Cityside Townhomes in Traverse City, said the condo market in the city is “probably” a bit overheated and slowing down.
“The market isn’t all that big and construction costs are skyrocketing,” he said. “There’s a shortage of building materials and labor.”
Figures prepared for the Traverse City Business News show the number of condo sales in the city between January through December this year fell 15 percent from the same period of 2016.
There were 248 condos sold in Traverse City in the 2017 period, compared to 293 the previous year. The length of time to sell a condo in Traverse City rose from an average 87 days in 2016 to 146 in 2017. But the average price rose from $242,036 in 2016 to $287,688 in 2017.
Kim Pontius, executive director of the Traverse City Area Association of Realtors, said condo sales ebb and flow because of a variety of factors, including the number and timing of new units coming into the market.
He said he thinks the condo market will remain healthy, mainly due to a growing desire for urban living and the number of new people – mainly well-heeled retirees – moving to the area and looking to downsize from their old homes.
“We are poised for additional growth, whether we like it or not,” Pontius said.
It wouldn’t be our annual “Watch” list if Eighth Street wasn’t on it.
The latest news is one giant step forward for a development project led by Joe Sarafa at the corner of Eighth Street and Boardman Avenue, fueled by recent approval of $9.9 million in brownfield funding. The project is viewed as the start of a revitalization effort for the corridor.
Called Envision Eighth, the first phase expected to break ground this spring is a 24,000 square-foot, three-story building in the site’s vacant parking lot. It will offer retail, commercial and residential space, including 12 workforce housing units. Phase two is demolition of the property’s existing office building and construction of a new 36,000 square-foot, three-story building in its place, offering commercial residential and 18 “market rate” residential units.
The brownfield funding includes $142,600 for environmental clean-up, $3.1 million for underground parking, stormwater management and public canoe launches as well as more than $5 million in reimbursement to the city for public infrastructure costs.
As for future development along the street, discussions are ongoing around a “form-based” zoning code, which focuses on the physical design and appearance of buildings rather than traditional zoning, which rules based on the types of uses allowed or prohibited in the buildings themselves. It could alter building heights, potentially allowing taller buildings at the road’s edge.
Finally, as far as the street itself, city staff is mining funding options for a hefty $7 million-plus price tag for a long-discussed reconstruction from Barlow to Union streets.
Casey Cowell is doubling down on the future of Traverse City. Cowell, the former CEO of U.S. Robotics and a longtime TC resident, has established Boomerang-Catapult LLC, with a sole purpose of investing in Traverse City-based companies that “create high value through intellectually intensive effort and export it to the world.”
To date, Boomerang has invested in the likes of Promethient, Atlas Space, Vector Center, Interactive Aerial, Naveego, and Geotix – all based in northern Michigan (not to mention $5 million for Munson Healthcare’s Cowell Family Cancer Center).
As Cowell looks forward to 2018, he is bullish on the region.
“We are focused on the region of northwest lower Michigan and, in particular, in the Traverse City area. We believe that long-term benefits accrue to communities that create high economic value and export it beyond their own geography. If all we do is trade within our community, then total community income and wealth will be limited to what we can produce locally. On the other hand, if we export our created value to markets around the world we can achieve greater income and wealth to the extent that our output is valued more highly and in greater demand in these external markets. As income and wealth increase, and our community nurtures and grows bright and engaged citizens, and investment in culture, education and infrastructure increases then so does our overall well-being.”
Look for Boomerang-Catapult to continue its involvement and investments significantly in the next 12 months.
A plan by Traverse City Light & Power (TCL&P) to offer high-speed internet access through a fiberoptic network to its customers could spark an explosion of new technology companies in the city, one supporter of the plan says.
“It’ll pour gasoline on the fire of technology companies in this community,” said Russell Schindler, the founder of TC New Tech, an organization that brings together technology companies, job seekers and investors.
A lack of affordable, high-speed internet service is keeping technology companies that want to move to Traverse City from doing so, said Schindler, owner of SampleServe.com, an environmental testing firm.
“This makes a lot of sense for economic development,” he said. “It’s the same as building water, sewer, roads and electrical service to attract new businesses.”
TCL&P has $10 million in its capital budget, which would allow the utility to extend its existing fiberoptic backbone network to 12,500 residential and business customers.
A planning session has been scheduled for Jan. 23 to discuss how to proceed with the project, said the utility company’s Executive Director Tim Arends.
One major issue that needs to be resolved is whether TCL&P would be the internet service provider (ISP) on the network or would contract with others to provide service to the utility’s customers.
A final decision will be made some time this year on whether to go ahead with the project, which would take about three years to complete, Arends said.
Constructions costs would range one the low end from $10 million if TCL&P becomes the service provider and up to $16 million to accommodate lines for other ISPs, he said.
Another fiber broadband internet provider, Michigan Broadband Services, recently moved its headquarters from the Upper Peninsula to The Village at Grand Traverse Commons and is providing service to businesses located there.
Michigan Broadband Services President Bruce Moore said that he’s wants to expand service in Traverse City and would be interested in doing so through TCL&P’s fiber network.
“I feel like it’s an opportunity to be a complementary provider,” he said. “It would be great for the community.”
He and Schindler agreed that Traverse City needs more high-speed internet access to build on its growing reputation as a regional tech hub.
“Ten years from now, we could rival Boulder, Colorado,” a college town known for its growth in technology businesses, Schindler said. “A big part of it is fiber. If we don’t get it, it will hamper our tech growth.”