TRAVERSE CITY — Two spaces in a downtown Traverse City apartment building have been the center of considerable debate.

City commissioners on Monday rejected an application from the owners of TC Lofts to amend a 2017 conditional rezoning agreement for the building on East State Street. Maggie Laureto, who with Jon Laureto co-owns building developer REI Construction, wanted to build two small apartments in space originally planned as mechanical rooms on the sixth story.

Plans changed when the developer moved electrical meters and a backup generator to other parts of the building, city Manager Marty Colburn previously told commissioners.

Planning commissioners in April recommended changing the agreement by a close vote. City and Planning Commissioner Brian McGillivary said he opposed the request at the planning level but missed the vote, and on Monday his mind hadn’t changed. Supporting it would run counter to longstanding plans for downtown building intensity to taper off at neighborhoods’ edges, he argued.

“I think it has to do with maintaining the process and being fair to all developers and following the zoning code,” he said.

Commissioners rejected the motion by a 4-3 vote, with 5 needed to pass. Mayor Jim Carruthers, Mayor Pro Tem Amy Shamroe and Commissioner Roger Putman joined McGillivary’s no vote, with commissioners Christie Minervini, Ashlea Walter and Tim Werner voting yes.

McGillivary took issue with the fact that the city learned from a Traverse City Fire Department inspection that the developers had built the framing for apartments in the space. Both city and planning officials were clear that they didn’t want housing on the sixth floor when they approved the original agreement, he said.

Carruthers echoed this, and said it looked as though the developer ignored that and was asking for forgiveness, an assertion he and others made before.

Maggie Laureto, reached before the meeting, rejected that accusation, saying two different attorneys told them apartments would be allowed on the sixth floor, but the city attorney disagreed. She was frustrated the company’s integrity was being called into question, she said, and asserted original documents didn’t include any use restrictions for the sixth floor.

The original offer from TC Lofts states that, aside from previously approved stairwell, elevator shaft and mechanical room, only a 1,490-square-foot community room would be enclosed.

“We’re just trying to provide long-term rental housing downtown and density,” she said.

Carruthers and McGillivary also balked at “live-work” units in the first floor where zoning code would otherwise disallow commercial space — the ceiling heights are too short.

Minervini said given the chance, she would have voted for allowing sixth-story housing in the original agreement. She didn’t want to assume the developer acted in bad faith.

“This isn’t a referendum on building heights or on downtown development, it’s a legal request to amend a conditional zoning agreement in order to reflect today’s needs,” she said.

That request didn’t seem to Walter like an attempt to dupe the city, she said. She was willing to show “grace” and allow housing inside of space that already exists and won’t have much impact on the surrounding area, if any.

Werner, while agreeing that the process by which the request came to commissioners was “messy,” but he favored turning the available space into apartments and asked how long commissioners were willing to let it sit empty.

Minervini said they were considering an amendment request and said she wouldn’t want other property owners to think the city won’t even consider theirs.

Shamroe agreed, but noted it was the first time she saw an amendment request come in four years later. And she also agreed that building plans can change as circumstances do.

“I don’t think it’s ill will, or I don’t believe that all developers are out to get us or to pull one over or pull the wool over our eyes ... but I do think that at this point this one is just one that I can’t support,” she said.

Maggie Laureto said she was disappointed by the decision and was still taking it in, but added it’s frustrating the city rejected workforce housing and density.


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