Not so smart growth? Region might be building reputation as development dead zone

Quick-name the single biggest issue in northern Michigan. If you said 'growth' or 'commercial development,' then you've got your finger on our region's pulse. No single topic is debated in more commission meetings, dinner parties, conference or court rooms than if, how, where, and when to develop the Grand Traverse region.

The interesting thing is how much folks on both sides of the debate insist they have in common. Both agree that commercial development eases the residential tax burden, attracts jobs, and improves the region's economy. Both even agree that we need to be more vigilant against sprawl and developments that do not fit the character of our community. And, everyone agrees that the region will inevitably continue to grow as more and more companies and families discover what we already know.

But here's the rub: what's a good development? Does a person who owns property and asks for no public money have the right to build what he or she wishes? If you don't want sprawl, will you agree to much higher density (and potentially traffic and noise) in the downtown district? And once we set the rules for development-as difficult or easy as we want them-should we stay consistent and accept what comes along, or does the political process give us the right to change laws, regulations and elected officials as we see fit?

These questions are just the beginning of the debate that is coming to a boil. With several high-profile commercial projects either recently rejected, underway, or tied-up in the judicial system, some are saying Traverse City and its surrounding townships are earning a reputation for being an impossible place to launch a new commercial development. If true, these whispers could cost our region new opportunities, jobs, and tax dollars. Tino Breithaupt, senior vice president of economic development at the TC Area Chamber of Commerce, says such a reputation could "travel like wildfire through Michigan and the Midwest." Does this threaten our region's economic viability, or is such a reputation precisely what we seek?

The Business News publishes some answers to these questions, profiles a few recent commercial projects that faced unique challenges, and identifies some groups that are busy working on these very questions.

John Sych

Grand Traverse County

Planning Director

My impression when I first came here was it did seem that several communities were struggling on specific projects. Communities are struggling with that balance, because the natural environment is such an important part of our economy. And we do have a very motivated and activated public that lives here, which makes it difficult for developers. One problem is sometimes that these active people don't come out for reviewing a land use plan or during the zoning process, but they do come out when a project is a vote away from final approval.

Rick Smith

President, Builders Exchange of Northwest Michigan

I've been in the construction industry for 35 years. The politics here have just gotten out of hand. You see a minority opposing something, they make a lot of noise, and they seem to have their way. So when a developer looks and says it's too darn difficult to get through because of politics, they'll just go somewhere else.

Russ Soyring

Traverse City Planning Director

I don't think locally we are building that perception. I think it's the tax structure and the land values that are making it so financially difficult. Commercial property values are reaching Ann Arbor and Royal Oak levels. The fact is, most projects here happen under the radar, are not reported in the media, and pass very quickly.

Lee Grant

Wade Trim (recently relocated to Florida)

What makes it most challenging in the Grand Traverse region is there are so many forms of government, between all the townships and towns, each with different rules and competing interests. There's not a common vision. Where I live now (Tampa, Fla.), there is one single planning department that covers the entire county and city, serving how many millions of people? That's what you need.

Gerry Harsh

Garfield Township Planner

There's no doubt that there's a certain amount of what we call 'gate-closing' as an attitude on the part of some sectors of the community. It doesn't necessarily take a majority to carry out activities that can thwart development…might be a relatively small number of individuals who have figured out how to get their way. But we're pretty well off as a community. We have problems, but we don't have blight or major crime. We are more concerned about quality of life inside the gate, so there is a bigger component of people who don't want to see things change, versus a place like Flint or Saginaw, where they'd love to see an influx of development or people.

Tino Breithaupt

Senior Vice President-Economic Development at

TC Area Chamber of Commerce

We are definitely hearing from both sides. From the public sector we've heard that when developers come in they don't come in with a sound game plan. Developers say they are told up front what they can and can't do, but then they go ahead and do what they were told, and the rules change. There is language throughout township, county and City government that allows people to fall back on projects not meeting the character of the community, which is very subjective in nature. Developers just want the black and white, no matter how good or bad that news is. Don't tell me I'm okay and then throw a subjective spin on it.

Jim Carruthers,

local activist and City Commission candidate

We keep hearing it's true, about how the whole process is so difficult. I just want sensible development. Otherwise we're going to get to be a Boulder or an Aspen, and price ourselves out of the market. If we change from small town to big city, will we still have the charm? I think we need to slow down and figure it out. Get a new masterplan, get communities' ideas, and spend a year networking with the community before acting on these big proposals.

Jerry Snowden

developer here and downstate

I understand that development will never be simple enough or never be difficult enough to satisfy all sides. The trick, I think, is to have a healthy balance. The old saying says you don't have to be sick to get better. The fact is, a growing city cannot survive on residential tax base alone; otherwise the tax burden is felt by the residents. I look around here and see that Traverse City is in the early stages of its redevelopment cycle. I see untapped potential, with empty lots and holes in the ground downtown. Cities that recover have a vision, a clear economic plan, and they execute it.

Scott Nowakowski

Meijer, Director of Real Estate

I have been with Meijer for 25 years and have worked in the five-state area, from very rural to urban areas. I have never experienced so much frustration as in the Grand Traverse region in Acme. I have no idea how residential developers do it; they must say, 'geez, I can't go through all this litigation for a 10-house subdivision.' It's financial suicide, so many just go on their way.

Tim Roache

Gosling Czubak, local engineering firm

Some townships are eager to see development, so I don't think we're missing out. We're forcing change to come more slowly. People have been enjoying this area for decades, and if it becomes something very different very quickly, I'm not sure that that's good.

Doug Mansfield,

Mansfield Associates, land use consultancy

Anything that's not a single-family home is coming under fire here now. It's too bad to see, because it's getting so that attorneys are the only ones who can propose projects, so you've lost the general desire of planning commissions, which is to allow conversation to take place. I did a commercial development on a river downstate where nobody showed at a public hearing. In this county, I've been escorted from meetings by the sheriff and had my car vandalized during and after planning commission meetings. Many, many people look at this area and just walk away.

Gene LaFave

developer here and downstate

There are three groups…the pro developers that say build anything anywhere, those who say generally development is good if it is done well, and those who are anti-development for environmental reasons or want the gates locked behind them. Most people would like to grow the tax base, but it often comes down to who yells the loudest. Our laws are not that cumbersome; it is the practice, or the people interpreting and influencing those laws that are the problem here.

Steve Smith

developer of Grand Traverse Commons in Acme

I've been a commercial developer throughout Michigan for 30 years and I have never been in litigation in my life. Now we are embroiled in an absurd legal battle with Acme Township and Concerned Citizens of Acme Township, even though we have made every change and accommodation they have requested. I feel like I'm in the twilight zone up here, with the level of dirty politics I have seen. For example, we hired the very planner the Township asked us to, and we were subsequently vilified for it.

Hans Voss

Executive Director, Michigan Land Use Institute

Remember, there are real advantages to setting a high bar for developers. If we lose this landscape, we lose our economic engine. We need to make it easier for developers to high-density infill projects in our existing towns. That takes the pressure of the surrounding landscape. The worst of all is a middle of the road, medium- to low-density suburban development pattern that gobbles up land and wastes money on infrastructure. And unfortunately, that's the easiest type of development right now.

Bob Forsman

outgoing president, Gourdie Fraser, local engineering firm

It is becoming known statewide in the developer circles that the TC region is becoming a very difficult and costly process to do commercial development. A part of the reason for this is that the developers are handed the ordinances as the rules and guidelines to follow and then when they do, the cities, townships and villages don't necessarily follow their own guidelines, which leads to delays, costly ongoing negotiations and even legal battles.

Working on a solution

City of Traverse City: A Masterplan Subcommittee of the Planning Commission is working on the first revision of the City's master plan in more than a decade. The plan will be simplified and, hopes Planner Russ Soyring, "timeless." The current master plan leaves too much open for interpretation by developers and elected officials. The new version will likely divide the City into five neighborhood "types" based on density, so that quiet, residential neighborhoods have certain rules, while busy retail areas have more lenient regulations. The group has already gotten input from the likes of neighborhoods, school kids, and developers.

TC Chamber: The Chamber's new DevelopMentor program allows developers with a germ of an idea to come before 30-person peer review panel and get confidential feedback at no cost. The process purposely pokes holes in the idea, ideally identifying future potholes the project could experience later on.

Grand Traverse County: Designed to come after the Chamber's DevelopMentor, the County's Land Development Review Committee allows a developer to present a conceptual plan to representative regulatory agencies, including the Road Commission, Drain Commissioner, Health and Fire Departments, and others.

The Traverse City Transportation and Land Use Study (TC-TALUS): The transportation planning agency for the TC region is working on regional visioning and planning to manage federal transportation dollars headed to our region. As soon as the region reaches a certain population density threshold (expected with the 2010 census), TC-TALUS earns the designation of a "metropolitan planning organization" and can tap into millions of transportation dollars for local units of government. In flourishing communities, transportation planning is closely tied to commercial and residential development.

Land Use Transportation Study Group: The study arm of TC-TALUS, this group is working on the development of a community vision, plans for the future, and projects that address land use and transportation challenges facing the region.

Builders Exchange of Northwest Michigan: Organization representing 300 companies and 10,000 employees in the construction industry has launched a new Governance Committee, designed to monitor and advocate on key proposals and developments in the region.

Other: Local Fifth Third Bank President and Traverse City DDA President Mark Eckhoff and developer Gene Lafave in June conducted three meetings that included a total of 100 citizens to get feedback on where people see the community today, and where they'd like to see it go. The most prominent findings, including improved roads, leadership, and lifeguards on the beaches, were reported to city commissioners, the DDA, and the City Manager.

Cases in point

Glacier Bay

In 2005, Wilderness Development, Inc. proposed to build Glacier Bay Water Park, a $50 million development in Elmwood Township on a 230-acre site at the corner of M-72 and Carter Road.

The Glacier Bay project, which was to include more than 400 condominium/hotel units, two restaurants, a golf course, horse stables and recreation trails in addition to the 200,000 square-foot outdoor water park and 80,000 square-foot indoor water park, would have created some 200 new jobs to the region. The development was designed consistent to the township's masterplan. This proposal, however, met early resistance from township residents with concerns over potential groundwater depletion, traffic safety, environmental impacts, noise and diminished property values. In response to these concerns, developers invested more than $100,000 in engineering, environmental, and traffic studies.

After months of haggling over two open planning commission positions, Elmwood Township ultimately established a full planning commission and reviewed the Glacier Bay site plan. During the review, the panel identified flaws in the township's existing zoning ordinance, which lacked specific guidelines. The commission drafted amendments to sections involving planned unit developments and resort commercial zoning classification, both of which applied to Glacier Bay.

While the planning commission worked to push the amendments through, the uncertainty prompted Wilderness to pull its application. Despite more than a year of negotiations and a sizable investment in the project already, the developers chose to take the development concept elsewhere.

Acme Village

A development project more than 17 years in the making, involving three parties: Acme Township, Village of Grand Traverse and Meijer, Inc., is immersed in litigation to this day, and the 182-acre site at the corner of M-72 and Lautner Road remains vacant.

The case began with Meijer's 1990 purchase of a 63-acre commercially zoned lot, where the company planned to build until Acme Township residents requested a combined development between Meijer and Village of Grand Traverse on Village of Grand Traverse property. Meijer agreed and the township issued a special-use permit to the developers, prompting the first of two lawsuits brought against Acme Township by Concerned Citizens of Acme Township (CCAT), who opposed the large scope of the project. A circuit judge ruled that the township's master plan/ordinance was inconsistent with state zoning law, stopping the development at that time.

After the ruling, Village of Grand Traverse and Meijer resubmitted their proposal under a different township ordinance, which once again yielded a special-use permit from Acme Township. CCAT opposed and filed a second lawsuit where a second circuit judge ruled that the mixed-use development plan was inconsistent with the township's master plan, resulting in an appeal from the developers.

Following the two losses, Meijer returned to its original plan where a newly elected Acme Township Board and Planning Commission attached additional criteria in order to receive a special-use permit for the Meijer property. This brought yet more litigation against the township, this time from Meijer. The cumulative case currently resides in the Court of Appeals and no decision has yet been handed down.