It's starting to look a lot like Christmas in downtown Traverse City, at least, for two local businessmen who stand to reap millions from a plan to redevelop the Whiting Hotel, assuming Traverse City and Grand Traverse County commissioners vote to endorse the project.
Affordable housing is the fig leaf justifying the transfer of almost $3 million in public monies to Michael Anton, the current owner, and Gene LaFave, the prospective developer. Say the magic words, "affordable housing," and public money comes showering down.
LaFave expects Grand Traverse County taxpayers to borrow $800,000 (plus nearly $700,000 in interest) to help him buy the Whiting from Anton. Anton purchased the building 10 years ago for $891,000, and is now selling it for $2.65 million. After the county assumes control, the building will transfer to LaFave, who will then begin renovation.
The $800,000 loan is supposed to be repaid through school taxes that will be diverted from their intended use for up to 30 years.
Let's say you want to buy a house, but don't think you can afford the price. Your local government steps in, tells you they really want you to buy that house, and they'll give you money so you can. Don't worry about the debt, because government will simply pay it off with your real estate taxes.
Sound like a good deal? Sure it does, and that's exactly what's being offered to the developer in this project.
But wait, there's even more public money. The pot gets sweetened with almost $1 million in federal historic tax credits, $440,000 from the Michigan State Housing Development Authority, $300,000 from the federal department of Housing and Urban Development, $436,000 in a Michigan Business Tax credit, $50,000 from the Federal Home Loan Bank, $20,000 from United States Department of Agriculture, plus more gifts from private and nonprofit sources.
Another argument used by supporters is that if we don't grab this money, Traverse City will lose it. Apparently no one cares if this is a wise expenditure, coming at a time when our state and local governments are having difficulty funding our schools, taking care of the elderly, keeping health clinics open and making sure our roads are drivable. We can't afford to subsidize this development.
The current Whiting has 54 affordable units ($400 to $450 per month, including wireless Internet, cable and even flat-screen televisions). Isn't it ironic that when the renovation is complete this so-called "affordable housing" project will result in only 11 affordable units? And did I mention that 16 of the 38 total apartments won't even have a window?
If we have $3 million in public money to spend on affordable housing, we can do far better and get lots more bang for our buck with a more suitable project.
Is there really enough public benefit to justify spending this money? The city commission will vote on the project Monday. If they concur, the county commission will vote on borrowing $800,000.
Please let commissioners know how you feel.
About the author: Ross Richardson is a Grand Traverse County commissioner representing District 5, which includes portions of Traverse City.
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