The Cherry Republic Center Opportunity

Editor’s Intro: MyWHaT’s guest contributor, Peter Spaulding, is working on the Cherry Republic Center as an urban planner, design consultant, and project assistant. Peter lives and works in Traverse City. He is co-founder of Placework DG and a graduate of the Urban and Regional Planning program at the University of Michigan. As the Cherry Republic Center is set to move forward after the latest city commission vote, Peter explains below why he is encouraged by its potential. 

The Cherry Republic Center Opportunity 

by Peter Spaulding

If you have followed the news, you may be aware that the development known as the Cherry Republic Center (RE) has made a step forward (IPR) through the approval process. Thanks to the City Commission, the state will now be able to look at the Brownfield plan approved by the Grand Traverse County Brownfield Redevelopment Authority. It is a major milestone and we are happy that the next stages of project development can move forward.

Corner of Front and Cass Streets.

There has been a lot of work done already to wrangle numbers and respond to concerns in order to provide the best project possible. Luckily the process has all been for the best; the time simply doesn’t seem right to make flashy improvements downtown. The project has gotten lean and mean, and will instead pay to upgrade electrical infrastructure, complete preventative street light maintenance, improve streetscapes, and clean-up environmental contamination on Lot O. Cherry Republic is donating the construction, operation, and maintenance of public restrooms to the city for 20 years.

We can now tackle the mountain of work remaining and really bite into some of the fun stuff. The design team can further develop form and the function, and how the project will interact socially and physically amongst its surroundings to leverage and celebrate this corner for all of Traverse City. As designs are finalized, the building itself will reflect the deep dedication to the belief that investments in good design, construction, and materials pay long-term dividends. Minimizing the costs of heating, cooling, and electricity, and limiting the maintenance required to keep a building looking and performing great for years is a benefit to residents and citizens alike.

Development is Personal

The Grand Vision is recognized throughout the country and is one of the reasons I even considered moving back to the area in the first place. The goals established are exciting to imagine, and I’m thrilled to have a hand in realizing them. The ways in which this project speaks to my own values and adheres to the goals of the Grand Vision are impressive:  this project fosters unique and vibrant communities and strengthens the local economy; it helps to create a more diverse mix of housing choices while minimizing environmental impacts and advancing sustainable construction and transportation. And, it supports local farmers!

I am biased toward this project, but I am biased because I have faith in the values that guide the people behind it. I know what the big picture is, and look forward to exciting changes everyone can get behind. In the coming weeks and months we will be sharing our vision, and listening to your input. My hope is that we continue to improve the project, and that when the time comes to break ground, this will be a project everyone can be biased toward.

  1. james b
    August 24, 2011 at 9:57 am

    It should be a great project. Thanks, Peter!

  2. August 24, 2011 at 2:15 pm

    I received the following via email from commissioner Jim Carruthers today. He agreed to have it posted here:

    It should be more clearly pointed out that Peter Spaulding is a paid consultant for this project and that his opinions for how this project moves forward, using tax payer dollars, is directly related to his personal pay check which is rather self-serving, considering his opinions for moving this forward are self motivated.

    Many good people of Traverse City have come to me (including a DDA Board Member) suggesting that the city should not support this project because of the fact there is little public benefit as it relates to the amount of tax subsidy going to a private developer. Over $3 million of taxes will be diverted for less than $130K of environmental clean up on an adjacent city property. Over $850K of taxes will be diverted to subsidize “public” restrooms in a private business. I would have to imagine if we offered that amount of a subsidy to the owners of Horizon Books to manage public restrooms for the next 20 years, they would gladly welcome that support, as an existing downtown business owner. Not to mention the fact that Horizon is the one downtown business with the most liberal hours of operation. It is also newly reported that over $1.3K of MBT taxes (a business tax recently removed by the our new governor, do to pressure from business owners) will be used even though these taxes are no longer available but where snuck in to spend down before the tax dollars went away. Not so good.

    Another issues that make citizens question this development are the loss of the “plaza” space at the corner of Front and Cass Streets. You know, the corner where Santa comes to town, the same corner that would be designed into any urban development plan as a “Place Making” design option for congested downtown spaces. This is not to mention the fact that all the buildings to be removed, currently house business that employ many people who all will be displaced by this project. The loss of jobs is not something that is good for TC. The developer suggests he will be creating jobs while at the same time admits he will be moving 20 jobs from Glen Arbor. Is this job creation or job shifting, and is this good for Glen Arbor? And not only will the construction jobs be temporary, there is no guarantee they will be offered to local unemployed construction workers.

    The buildings in question are in a downtown Historic District and the only reason the developer and his planners are asking to remove them is because it is not financially feasible for him, the developer to develop the site if they have to retain the buildings historic integrity. Why do we have a Historic Districts Commission in the first place, who’s mission is to protect our historic structures, if we are going to just let developers tell us they can’t make it work economically for them. Is it about the developers or is it about protecting our historic nature of our town? This newly designed (now 5 story) glass tower not only does not meet the historic districts qualifications, it will dwarf the surrounding 3 corners w/2 story buildings, shading an area of downtown that is already deficient of sun, especially during our long winter months,

    When the DDA marketed the building of parking decks downtown, they said this would support future development and that existing parking lots and vacant property would be redevelop. Low and behold the only parking lots to go away where lots the deck sit on and redevelopment was on properties that the DDA had been negotiating on long before the decks were built, (Henderson project, now 101 Park). If the developer is so bent on his business being a anchor store that would encourage growth in the downtown then why does he not consider redeveloping the parking lot at State and Cass (the old Milliken parking lot) or even the hole on West Front, the failed Federated project at the old GT Auto location. These areas are prime areas for redevelopment and would support future growth and use of existing and future parking decks in these areas w/o taking down historic buildings.

    There are so many reasons why not to subsidies this project with taxpayer dollars with little public benefit. It will only line the pockets of a developer who has his hands out and admits he would only do this if he gets the subsidy. That to me says this project is not worthy of giving away our tax dollars because the developers heart is only in it because of the cash in his pocket. BAD POLICY as I see it.~ Jim

  3. August 24, 2011 at 3:55 pm

    Gary, I voted for the final version of the project, but I have to agree with Jim more than I disagree with him. I voted for the project because Commissioner Gillman and I set a goal early in the process – to not allow the expenditure of captured local tax dollars on things that did not have genuine value – and we met that goal. But my yes vote was also cast with deep ambivalence about the policies involved in the whole situation.

    This project is not the redevelopment of the TC Iron Works – not by far. The cleanup portion of the Cherry Republic project is a very small tail wagging a very large dog, with $185,000 of environmental activities to be reimbursed by school taxes generated by this project through the DEQ, and over $2 million of “redevelopment” activities like demolition and excavation to be reimbursed by school taxes generated by this project through the MI Economic Growth Authority, or MEGA.

    This figure includes something on the order of $800,000 in interest. That means the developer spends money demolishing buildings and digging and pouring his basement, then gets reimbursed for these activities through captured school taxes on his property, then gets interest for the time between spending the money to build his basement and then paying himself back for his construction costs with his captured school taxes.

    Then – because apparently all this is not enough – MEGA granted Cherry Republic and the development company a tax credit of 15% of project costs, or about $1.5 million. A tax credit is a check written directly by the taxpayers of Michigan to the private owners, using money appropriated from the general fund by the state legislature. Disappointingly, neither Cherry Republic, the developer, nor the director of our own DDA chose to disclose to the public bodies the existence of this $1.5 million credit, nor the fact that the “rush” to get city approval was being driven by a September 6 deadline to apply for the credit. When I asked him during the meeting, the city manager was not sure if he knew about the $1.5 million credit or not. I learned about it because the brownfield authority director – unlike the DDA director – believes she has an obligation to be straight with public officials and give them all the facts.

    MEGA throws all this captured and other public money at projects because they consider downtowns to be “core” areas. The problem is that they don’t distinguish between a core area that genuinely needs the subsidies to redevelop – like Detroit – and a core area like downtown Traverse City that is obviously doing great. The “Grand Vision” argument that we have to subsidize downtown development or all the investment will flee to the outer suburbs and greenfields seems 10 years out of date to me. People want to live in town in Traverse City, they want to work and recreate downtown. We’ve won the argument culturally and demographically – so it’s time to start looking at why we’re still capturing so much tax money to skew the economics. I say this as a downtown commercial property owner whose property value benefits – at least indirectly – from all these subsidies.

    The solution is to figure out when authorizing public subsidies, through captured tax dollars and otherwise, has value to the public and when it does not. It does have value sometimes. There are good projects on the drawing board for the DDA – but I tend to believe those projects are the ones that enhance public space. Enhancing public space in the downtown district, including the bayfront, raises property values in the district because it draws people to the area, and people mean business opportunities. But the primary purpose of enhancing public space is to benefit the public, not us downtwon property owners.

    The city commission has a DDA TIF ad hoc committee that is working on this issue and a few others now. Our next meeting is September 6 at 2 pm over at the city building. I’d encourage anyone to check it out.

    best wishes, Chris

  4. rob
    August 24, 2011 at 4:03 pm

    I’m usually on the other side of the fence when it comes to comm. Carruthers opinions, but he hit this one square on the head. Kudos.

  5. pjspaulding
    August 24, 2011 at 5:39 pm

    I am employed by Cherry Republic as an urban planner, design consultant, and project assistant. I am sorry that it was not made more explicit, and I apologize to anyone who was misled.

    I agree it is important to keep an eye on taxpayer dollars, but it should be clearly stated that the taxpayers in question are Cherry Republic and the future residents of this building, not residents of the city in general. Public funds available for this project are purely theoretical; they only exist in a version of the future where this project exists.

    If State Brownfield laws existed simply to clean up environmental contamination, this project would indeed be a huge waste of money. They do not, and we should be glad for it (Riversedge, Midtown, Radio Centre I and II, Harbor View Center, and The Village at Grand Traverse Commons to name a few all utilized Brownfield programs if I am not mistaken). Michigan’s Brownfield program exists largely as an economic development tool, one that has done a lot for Traverse City’s economy.

    Brownfield laws allow private developers to be reimbursed for certain costs through their future taxes for a reason; to incentivize development that is deemed beneficial but would otherwise not happen. Beyond the direct and indirect subsidization of suburban sprawl, building in urban environments involves intricacies that do not exist in greenfields (the buildings next door must be held in the air during excavation, sidewalks must be protected or replaced, and road closures may be necessary). It is unfortunate, but it is simply more expensive to build in an urban setting than in a greenfield.

    Michigan has decided the playing field needs to be leveled, or at least given a gentler slope. Brownfield programs help to alleviate the difference in costs so that growth and vitality in existing urban areas can be enhanced and retained. The other option is sprawl, a trajectory that puts Michigan in even more trouble moving forward. Michigan lost population between 2000 and 2010, and a disproportionate number seem to be some of this state’s best and brightest, the products of our uncommonly good universities.* They leave for improved prospects in more exciting and vibrant cities and towns across the country. Traverse City is pretty nice, but it can’t accommodate all new graduates, and it can’t accommodate business expansion without new development. This is a state level concern writ small.

    I am very interested in the quality of Traverse City’s public spaces, urban fabric, and historic character. I look forward to the eventual development of all the underutilized spaces downtown. It is almost all I care about, but since I am long winded, I plan on doing that via a properly developed blog post.

    I sincerely hope that this will not become a conversation solely between “the developers” and “the government.” Much of my reason for writing this was to start a process of engagement with the public more generally. If or when the intricacies of funding are resolved, there will be a project. I want the project that comes out of the ground to be the best it can be, focusing solely on money doesn’t get us to that point. It will remain an important topic, but hopefully not the only topic. I look forward to more conversations based on placemaking, urban design, and the “good city.”

    Peter Spaulding

    *(full disclosure, I am a resident of Michigan and attended the University of Michigan, I am a biased toward this states institutions as it reflects positively on my own educational achievements and builds state pride)

  6. JR
    September 6, 2011 at 9:49 pm

    “Cherry Republic is donating the construction, operation, and maintenance of public restrooms to the city for 20 years.”

    How can you say Cherry Republic is “donating” when the cost of construction, operation and maintenance is being subsidized with tax dollars? They’re not donating, they’re being reimbursed.

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