Workforce, Homeless Youth Housing Coming Near Downtown

A former hotel on Munson Avenue will be the new home for two underserved populations in Traverse City.

East Bay Flats will offer a combination of 60 one-bedroom and efficiency apartments for area workers and at-risk youth, thanks to a partnership between the Traverse City Housing Commission and Socks Construction, which will be converting the Country Inn & Suites at 420 Munson Avenue, just east of Northwestern Michigan College (NMC).

Construction is estimated to start this month, with the first units available in July and the development completed by November.

When Country Inn co-owner Jack Burns and his business partner Jay Payne decided they were interested in selling the building immediately to the east of the main hotel building, known as the lodge, they contacted John Socks of Socks Construction. They originally intended to convert it to condominiums, while continuing to use the main building as a motel.

After looking over the building, the Socks team suggested going in another direction.

“Charlie, David and I decided it might be perfect for workforce housing,” said Socks, whose cousins Charlie Socks and David Socks are also his business partners.

“For the last five to eight years we’ve been hearing about workforce housing issues,” Socks said. “We’d kick things around. We’d like to build it – that’s what we do – but with the land cost, taxes and construction costs it doesn’t work. Now it’s fallen into place.”

Burns said he believes the construction lends itself to a multi-family building.

“It’s built like a fort,” he said with a laugh, pointing to the concrete walls.

The sale is scheduled to close this month. Immediately upon closing, Socks Construction will begin renovations. As part of the agreement, approximately 14 units will be dedicated to at-risk youth, using a grant from the U.S. Department of Housing and Urban Development (HUD) to supplement rental costs.

The other 46 apartments will be available to those earning 60 to 80 percent of the region’s area median income, currently set at approximately $41,000 for a single person and $47,000 for two people.

The estimated rental will be $990 for the one-bedrooms and $924 for the efficiencies, with rent including all utilities. The youth renting the apartments will be expected to pay rent in the amount of one-third of their income; the HUD grant will make up the difference.

Tony Lentych, the executive director of the Traverse City Housing Commission, said the opportunity to provide housing for youth age 18 to 24 was a key component to getting financial support for the project. With more than 200 youth in the five-county region who have aged out of foster care and/or listed as homeless and living without their families as of 2016, these apartments address a critical need.

“This was square in the center of our mission,” Lentych said.

Lentych brought in Eric Hanna, president and CEO of Michigan Community Capital (MCC) to help provide financing for the project, which is estimated to cost more than $5.5 million for purchase and renovation. Michigan Community Capital is a nonprofit which specializes in securing capital and loans for low to moderate income housing projects such as this, working with banks and other lending organizations to provide financing. Banks receive community reinvestment credits under the Community Reinvestment Act. Northern Trust, based in Chicago, will be working with this project.

“We look at the rapid rate of growth in rental rates not commensurate with the growth in median income. In Traverse City it is a well-documented problem,” said Hanna.

Traverse City is one of four locales MCC is working with. The others are downtown Grand Rapids, downtown Detroit and mid-town Detroit.

Burns said the site on which the building is located is actually separate from the one on which the motel will continue to operate.

“It always has been a separate parcel,” he said.

Their 6½-acre property extends to the south and includes an acre and a half bordering Eighth Street behind the Inn building.

He and Payne are also looking at possibly splitting off the portion bordering Munson currently occupied by a vacant restaurant building, previously the MI Grille, noting that most anyone interested in opening and operating a restaurant wants to own the property.

The property itself is in an ideal location, according to those involved. By facing both Munson Avenue and Eighth Street, people are easily able to travel either east toward Acme or west toward Traverse City downtown. In addition, it is near the TART Trail.

Socks also noted its proximity to many hotels and restaurants on the east side of town, which could employ residents. And while he admits it would be a long walk to downtown, it is within walking distance of NMC and recreation. Both he and Burns also pointed to the fact it will be a BATA bus stop as another advantage.

All the parties involved say this is just a first step toward addressing the challenges of creating both youth housing and affordable workforce housing. Lentych hopes to use it as a model for other such proposals, while Hanna said there are other developments on the horizon.

“This is just the first in Traverse City,” he said.

Likewise, John Socks said his company is hoping to participate in building, developing or redeveloping other such units.

“We have others in sight,” he said. “We’re always looking, but this one is the farthest along.”