TRAVERSE CITY -- Another developer may pull out of a plan to renovate the Whiting Hotel, a project billed as a public-private effort to add affordable housing downtown.
Traverse City developer Gene LaFave on Tuesday said he could scrap his nearly $7 million conversion plans for the historical building on East Front Street. The concept has been in the works for months -- LaFave is the second developer to take on the project -- and the latest incarnation had designs for 27 affordable housing units and 11 low-income apartments.
LaFave said he doubted he had adequate city commission support following a weekend meeting with some city and county officials who expressed reservations over the project's cost and location.
LaFave on Tuesday met with Jean Derenzy, who coordinates Grand Traverse County's Brownfield Redevelopment agency, and said he wants city commissioners to vote in order to determine their project support.
"I think I'm going to request that we get a city advisory vote," said LaFave, who isn't optimistic he'll gain a favorable nod.
"It appears, I've been told, it's a foregone conclusion," LaFave said. "But we need to play the process out."
Some city and county officials continue to voice deep reservations over the project, which was to be buoyed by millions in public dollars in the form of a county land bank loan, federal tax credits and state support.
"I can get a lot more bang for my buck in terms of dollars for affordable housing at other locations in Traverse City," said Mayor Michael Estes, who attended the weekend meeting with LaFave. "Front Street is prime real estate downtown; why do we have to have affordable housing there?"
LaFave took over this spring as would-be redeveloper of the 1893 building after local businessman Bob Sutherland backed out.
LaFave's plan was to restore the historic hotel's exterior, make it energy efficient and create almost 40 affordable and low-income housing units, with rents ranging from $525 to $750 per month.
LaFave said the project had the potential to "jump-start" affordable housing development efforts in the Traverse City area.
"It's the number one issue," LaFave said. "We always talk about affordable housing, but nothing ever gets accomplished.
"It just sends the wrong message for what was going to be a nice use for what was an under-utilized building downtown," he said.
The county land bank in May approved borrowing $800,000 to help complete a $2.65 million Whiting purchase from a company headed by local real estate investor Mike Anton. The land bank was supposed to repay the loan by capturing state school taxes paid on the renovated property's value.
Ross Richardson, a Grand Traverse County commissioner who attended Sunday's meeting with LaFave, Estes and city Commissioner Deni Scrudato, also opposed the plans. He said the county land bank's involvement "propped up" the hotel's purchase price.
"I absolutely was concerned about that," Richardson said. "I question if (Anton) can get that much money for it if the county wasn't involved."
The city had no direct financial involvement, but Estes objected to the project's demand for public dollars.
"I don't support it as the best use of public money -- tax dollars," he said. "I want to see those dollars allocated in the best way we can."
LaFave countered that the project would not be a big money-maker for developers and public support is needed to make it viable.
"It wouldn't make money any other way," LaFave said. "I did it because I thought it was a good community project."
LaFave said there's no point in spending more money on development plans if he couldn't garner city commission support.
"The politicians have spoken. They have the votes to stop it, and that's fine," LaFave said. "At some point, you have to understand 'no.'"
City Commissioner Ralph Soffredine said he was disappointed to learn the project is stalled, but said he also questioned the cost of renovation compared to the number of housing units being created.
"The question about affordable housing is always, 'how much does it cost per unit, and how many units do you have?'" Soffredine said. "But the idea of taking that building and re-doing it was kind of a carrot out there."
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