A $700,000 purchase offer for a vacant Traverse City Area Public Schools (TCAPS) lot on Thirteenth Street could bring new housing to the corridor – though TCAPS board members will have to decide Monday whether to pursue the deal or open the property to other bidders.
Traverse City-based Socks Construction submitted an unsolicited purchase offer to TCAPS for nearly 1.8 acres of property across from Thirlby Field at the corner of Thirteenth and Wadsworth streets (pictured). TCAPS acquired the empty tract of land in 2001 in anticipation of future district growth, but has yet to identify an educational or capital use for the lot. The property is primarily utilized today for overflow parking at Thirlby Field. District officials indicated in December they were willing to consider other uses for the property, including selling it for housing.
In a letter of intent to TCAPS, Dave Socks of Socks Construction proposed dividing the property into 13 lots, with the company purchasing each lot separately for $53,846.15. Socks offered to purchase the first two lots immediately pending an agreement with TCAPS, then purchase the remaining 11 lots over the next three years, paying TCAPS for each lot as it closed.
While TCAPS Finance and Operations Committee members expressed interest in the offer Wednesday, the group rejected the concept of spreading out payment for the property over a multi-year period. “Our recommendation to the board would not be to handle it that way,” says Associate Superintendent of Finance and Operations Christine Thomas-Hill. “I indicated to (Socks Construction) that, after discussion with our attorney, we wouldn’t support laying it out that way.” Thomas-Hill says she asked Socks Construction representatives whether “they would still support moving forward to negotiate a purchase agreement (with different terms), and they said yes.”
Dave and John Socks did not return requests for comment Thursday on the offer or the company’s plans for Thirteenth Street. The property is zoned to allow for up to 14 single-family residential homes, which could be built by right on the site. At their Monday night meeting, TCAPS board members will review the offer and discuss whether to move directly to negotiating an agreement with Socks Construction or open the property to other bidders. A request-for-proposal (RFP) process could allow TCAPS to gather more details from Socks or other potential buyers on intended uses for the site, according to TCAPS board member Scott Hardy.
“We can define a process that not only asks them what they’ll pay for it, but what they’ll do with it,” says Hardy. “As a taxpayer-supported institution, we have to be conscious of how (the sale) impacts the neighborhood.” TCAPS could choose to use an expedited RFP process to avoid dragging the process out unnecessarily, as well as set a minimum bid level to eliminate low-ball bids, he says.
Hardy – who has a background in real estate – believes the $700,000 offer “is fair from a market standpoint.” A 2009 property evaluation listed a potential value of $350,000 to $420,000 for the lot, but Thomas-Hill notes that estimate wasn’t an official appraisal and is now nearly a decade old. TCAPS rejected a bid of $400,000 for the property in 2012 for being too low. Traverse City officials have pointed out the Thirteenth Street lot is one of the last remaining large, vacant tracts of land in the city, raising its market value and making it attractive for redevelopment.
The value of the land has made a potential scenario of affordable or workforce housing on Thirteenth Street increasingly unlikely, according to Hardy. “We’ve talked about if it could be a parcel for workforce housing, and as we crunched the numbers and talked to developers, people have said no,” says Hardy. “The numbers just don’t work in town. The costs are too high.”
Though TCAPS could potentially sell the property for far less than its market value in order to subsidize workforce or affordable housing, Hardy notes the district has a fiduciary responsibility to maximize its return on the property. “If we’re eliminating world language for $300,000, as a board member I have to consider, at what point am I adversely impacting our curriculum in order to solve a greater community goal?” says Hardy. “It’s the constant pull of government agencies: You have the fiduciary responsibility to get the most money you can from the property, and on the other hand, you have a duty to consider the impact on the community.”
Traverse City Mayor Jim Carruthers – who lives less than two blocks from the Thirteenth Street lot – says he’s disappointed about the possibility of taking affordable housing off the table, but acknowledges the realities of the local market. “Affordable housing is difficult in an area like Traverse City, where the land values are very high,” he says. Carruthers says while workforce housing remains his first choice for the Thirteenth Street lot, single-family homes could also be a beneficial addition to the neighborhood.
“I just want to see housing there,” says Carruthers. “As long as it’s housing that has some character or style to it. Single-family homes, attached duplexes. I don’t really want to see it sold for high-end housing.” Referencing nearby Thirlby Field, Carruthers adds: “I can tell you, whatever housing is built there, they’re going to have to like football.”