What’s the Story with Apartments?

A look at three multi-unit developments across the North

By Ross Boissoneau | April 29, 2023

It’s no secret there’s a need for housing everywhere across northern Michigan. Areas such as Leelanau County and Boyne City are white-hot, with homes selling within days of being listed, and the rest of the region isn’t far behind.

During the Great Recession, the construction industry crumbled, and when the economy recovered, there weren’t enough skilled trades workers to keep up with demand. The pandemic further exacerbated the challenge, as even more people moved to the region to work remotely.

For developers, it’s typically more cost-effective to construct higher-end properties. Investors may purchase properties for short-term rentals, taking more inventory out of the market.

The problem has become acute for lower- and middle-income families and workers, especially those who work in downtowns. Subsequently, many people end up living far from their work and commuting for an hour or more.

Addressing the challenge can take time, money, and will. There are some who are trying to do so with multi-unit apartment projects, focused at least in part on workforce housing. Here we look at three such projects in different parts of northern Michigan.

The Michigan Maple Block Company Property

Petoskey
For more than a century, the Michigan Maple Block Company was one of the stalwart manufacturers in Petoskey. When it closed down in early 2020, not only did it impact the families of the employees there, but it also left a sizable property vacant.

Now, the hope is that like a phoenix rising from the ashes, a 200-unit development will be constructed at the 12-acre site. Indiana-based Great Lakes Capital, a real estate development and private equity firm, has agreed to construct an apartment complex with approximately 200 units. Each of the buildings will be a three-story walkup with one- and two-bedroom apartments.

Petoskey Chamber of Commerce President Nikki Devitt says Petoskey hasn’t had any kind of multi-unit housing built since the Great Recession, and it is badly needed. “If people can’t live and work in the same [place], it’s not conducive to thriving communities,” she says.

Andrea Jacobs, the Housing Ready program director for Emmet County, concurs. “To have … hundreds of units is significant. The lack of inventory is an issue,” she says. Jacobs adds the fact that this development is repurposing what she calls a beloved former employer makes this all the more important.

The Michigan Economic Development Corporation (MEDC) saw the site’s development potential, and Great Lakes Capital agreed. Jeff Smoke, Great Lakes Capital managing director, said repurposing an obsolete site combined with the need for workforce housing makes it appealing to the company.

Devitt is optimistic this project will come to fruition. “I’ve seen so many come through the pipeline and stall,” she laments. She says the Michigan Maple Block Company location is perfect for such a development. It is near North Central Michigan College and downtown and connects to trails and the river.

Doug Mansfield, president of Mansfield Land Use Consultants, says the project has a recommendation from the planning commission to proceed to full design, which could be completed in June. If all proceeds as hoped for, he anticipates breaking ground this fall. Some of the project could then be completed and be ready for occupancy as soon as spring of 2024.

“It’s a really cool opportunity for Petoskey to grow outside the downtown,” says Jacobs. She believes that the cooperative efforts among the developer, the chamber of commerce, Housing Ready, and government entities could set the stage for additional development.

Devitt too believes that if this project is successful, it will draw others. “It could be a catalyst for more. Working with MSHDA [Michigan State Housing Development Authority] or the MEDC puts us in a position where government and developers see success,” she says.

Lot O

Traverse City
Jonathan Stimson, executive director of Homestretch Housing, champions the development of city Lot O—currently a parking lot—into a multi-unit downtown housing project. Homestretch is a 501(c)3 nonprofit that to date has built 118 affordable housing units.

Stimson and Homestretch hope to make the Lot O project environmentally as well as economically responsible. He says net zero, low carbon, LEED v4-qualified construction and mandated resident recycling will be key considerations, as well as supporting other transportation modes by offering bike storage on-site or other options to mitigate the use and storage of automobiles. Preference will be given to income-qualified employees and workforce in the city.

Stimson says the benefits of the project will extend beyond those who are able to live there. He believes the entire downtown will benefit in a number of ways, including increased business and revenue, a ground floor retail space, an increased employment base, and stormwater retention for greywater—aka water that has already been used.

The project has received support from many individuals and entities. They include former city manager Marty Colburn, the Downtown Development Authority, the Michigan Economic Development Corporation, Northwest Michigan Community Action Agency, Northwest Michigan Coalition to End Homelessness, Groundwork Center for Resilient Communities, Housing North, and Goodwill Northern Michigan.

Stimson compares the process to building the Mackinac Bridge. Lest that sound ludicrous, he positions the project’s similarities not in terms of engineering, but in procuring the financing needed. “Like building the Mackinac Bridge or the Civic Center, financing is the issue. Once we fulfill this issue, affordable housing will be the bridge Traverse City needs to be successful.”

The timeline extends out to 2025 and as such remains fluid. The hope is that by the end of October this year, fundraising, entitlements, architectural, engineering, and bidding will all be complete. If that’s the case, construction is anticipated to begin in April 2024 and conclude by September 2025, with occupancy the following month.

Hillcrest Village

Manistee
Surprise! This development is completed. And, no surprise at all, it is completely rented out.

A partnership between Hollander Development of Kalamazoo and the Little River Band of Ottawa Indians, the mixed-income development boasts 45 one-, two-, and three-bedroom apartments and stacked flats, all for households earning between 30 percent and 120 percent of the area’s median income.

The project was a redevelopment of a former school site and boasts a key consideration of walkability, as the city’s downtown shopping, parks, schools, beach, theater, and restaurants are all within strolling distance.

Jason Muniz, vice president of Hollander Management, says the company met Little River Band representatives at a conference several years ago and began discussions. “We were the first to partner with a tribe,” Muniz says, noting other such partnerships have since followed.

The tribe talked with the company about its needs for housing, and Hollander Management was familiar with the area, having worked on other developments in the Manistee area. They worked together to secure funding—Muniz says there are incentives for Native American housing—and were eventually able to proceed.

“It’s been years in the making,” he says. The company began construction in October 2020 and completed the project last year. The response from the community has been positive, and the fact the apartments are all leased speaks to the continued need.

Marc Miller, director of economic development for the Manistee Area Chamber of Commerce, says finding enough employees is a challenge for businesses throughout the area. “There’s a labor problem; we don’t have enough people to work the jobs we’re creating,” he says, noting that one reason is because there isn’t anywhere for new employees to live.

He’s hopeful Hillcrest Village is just part of a much-needed wave of development. “We’re actively pursuing other opportunities. There’s so much need for … seniors, workforce, affordable housing,” Miller says.