Traverse City Record-Eagle


May 23, 2014

Project faces delays, grant call looms

TRAVERSE CITY — Already-balky construction on a low-income, low-environmental impact housing project could run into more delays if a state housing grant doesn’t materialize.

The HomeStretch Nonprofit Housing Corp. is working with Habitat for Humanity Grand Traverse Region to build affordable, so-called green housing on the corner of Eighth Street and Woodmere Avenue in Traverse City.

Construction on HomeStretch’s contribution to the Depot Neighborhood — five duplexes and a single home —could stall because the Michigan State Housing Development Authority won’t renew a $300,000 grant, said William Merry, HomeStretch executive director.

"It's extremely important because it’s a grant, so that’s important to a project. We don’t have to pay that back, it will just keep our housing prices down," Merry said. "It's frustrating from the perspective that it’s the same project, and in this case we had all the financing ready to go and they essentially withdrew their piece, which leaves us with a big gap."

Merry said MSHDA officials told him the grant would not be renewed. MSHDA spokeswoman Katie Bach told the Record-Eagle that no final grant decisions have been made, but should be announced in the next week or so.

“I called down there over a week ago to inquire about the application and some things we have to do to set up in advance,” Merry said. “I was told it was unlikely we’d be getting a grant.”

Merry said he didn't have any idea why the grant would be denied. If MSHDA doesn't renew the grant, he plans to reapply for another funding round in July. The grant won't affect the Habitat portion of the project.

Merry planned to start construction on four buildings this summer.

The state money represents a significant portion of the project, which is projected to cost HomeStretch $1 million. Merry said he's concerned about having to make up the grant money with loans, which could negatively affect the pricing model.

HomeStretch received the grant two years ago, but never used it because of construction delays, problems with permitting and soil issues.

"The project has been plagued with problems ever since city commissioners authorized the sale to HomeStretch and Habitat," said City Commissioner Ross Richardson.

The Grand Traverse County Land Bank Authority agreed to grants worth $195,000 for the project and another $100,000 loan. Traverse City sold the property at a discount.



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