Lofts at Lumber Square Campaign Case Statement

LOFTS AT LUMBER SQUARE Building a Vibrant Community

The Vision Having homes for our workforce is crucial to the strength of our local economy and our community as a whole. Being able to live and work in Emmet County, however, is becoming increasingly difficult as the number and price of available homes does not meet demand. A 2023 survey commissioned by Housing North found that Emmet County needed 865 additional rental units. Between the construction of new multifamily rentals and existing rentals on the market, only a small fraction of the homes needed are available. This lack of homes across price levels directly impacts people who are working or would like to work in our community. Often it means people turn down employment in Emmet County solely because they cannot find a place to live.

Imagine a bustling neighborhood along the Emmet Street corridor and the Petoskey Greenway. When the Lofts at Lumber Square is completed, 165 more people will have a safe place to call home. Picture school-aged kids walking from home to a nearby school. Think of fewer help wanted signs in local business windows because there are places to live for the people in our workforce: health care workers, teachers and school staff, hospitality, retail and service staff. This vision is what the Lofts at Lumber Square will help bring to reality. Your support will help create homes and make our community stronger.

The financial pieces for a successful, sustainable housing development are complex, made more so by the high cost of land, materials, and other factors in our region.

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In the past decade our area has seen a

207% 80% INCREASE IN REAL ESTATE PRICES

2012 MEDIAN SELLING PRICE:

$139,000

2012 UNITS ON MARKET

1,519

DECREASE IN THE NUMBER OF RESIDENTIAL UNITS ON THE MARKET

2022 MEDIAN SELLING PRICE:

$426,500 2022 UNITS ON MARKET

319

Source: Emmet Association of Realtors®

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Alex Noble Birchwood Construction The Employee Story For a full year after accepting a new position in Harbor Springs, Alex Noble struggled to find a place to live, an all-too-common story here.

“When I was applying for jobs, I noted employers were all asking ‘have you figured out housing?’ I had gone online and looked at apartment costs so I knew they were similar range to what we were currently paying in Grand Rapids, so I thought, ‘we can afford an apartment up north.’ What I didn’t know was that there was a shortage of housing.

Waitlists for apartments were sometimes 24 months.”

When Alex first accepted her position as Money Maestro at Birchwood Construction, she rented a room from her high school math teacher’s mother. Not wanting to overstay her welcome and grateful for the favor, Alex continued the search for an apartment to rent adding that she was calling 10-15 realtors and apartments a day. “My husband Jesse was still living in Grand Rapids, and I was spending all of my free time looking for housing.” Finding a tough rental market with long wait lists, Alex and Jesse found a doable option: renting an apartment in a former Airbnb property. Although they had a place to live, the rental turned into a year of issues ranging from gas leaks to sharing the tiny apartment with

Alex Noble pictured with her husband Jesse and their two dogs

a squirrel.

“We almost stopped looking. I didn’t know how much longer I could stay up here. We had to adjust our expectations,” Alex said, “including adjusting our price range and expanding our search to surrounding communities. We are happy and grateful to have a house, but it’s been a character building year, for sure.”

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“When I was applying for jobs, I noted employers were all asking ‘have you figured out housing?’”

Housing and Our Workforce The Employer Stories

“Without question the housing market has had an adverse effect on employer recruiting. We have been very proactive in providing employee assistance. We have provided interest-free loans to assist employees with down-payments and in two instances, acquired property on behalf of our employees.”

- Tom Adams, President & Partner, Birchwood Construction

“The lack of housing definitely limits our candidate pool.

It has also been a drawback for relocating people to the Petoskey area. Petoskey Plastics had one applicant from downstate who wanted to live and work in Petoskey. He and his wife initially lived out of a hotel but couldn’t find an affordable place to live. As a result, he had to resign and move back downstate. The Lofts is definitely a step in the right direction.”

- Jason Keiswetter, President, Petoskey Plastics

“We’ve had several applicants who’ve declined positions because they couldn’t find affordable housing. We have some new teachers who are living in housing that’s available now but when summer comes, they’re going to get kicked out, as those become short-term rentals.

Housing has also had an impact on our enrollment.

We’ve had families move up here and they want to send their kids to Petoskey. Because there is no housing available here, they have to live in one of these surrounding districts and hope that we’ve got a spot for School of Choice.

Having the Lofts development is a great start and very encouraging.”

- Dr. Jeffrey Leslie, Superintendent, Public Schools of Petoskey

Photo courtesy Birchwood Construction 05

Lofts At Lumber Square The Lofts at Lumber Square, a proposed and approved 60-unit workforce housing development planned for 900 Emmet Street in the city of Petoskey, has been in the works for a number of years. In July 2021, Haan Development of Harbor Springs learned that its application for low-income housing tax credits to the Michigan State Housing Development Authority (MSHDA) was unsuccessful, putting the project’s future in question. Without the tax credits, the Lofts at Lumber Square faced significant hurdles to being built. The high cost of materials, a contracted skilled trades workforce, and the high cost of land, all result in new homes costing more to build than the local workforce can afford. The Community Foundation worked with Haan Development to purchase the land and develop a new plan to build the apartments, one that involved philanthropy helping to fill the funding gap. Haan Development continues to act as a consultant alongside the Community Foundation and Northern Homes Community Development Corporation (CDC). Northern Homes CDC is an experienced, local, nonprofit housing organization that will own and manage the Lofts at Lumber Square.

Building site, the Lofts at Lumber Square

Although only one of myriad solutions to the housing crisis, your support of the Lofts means the difference between an undeveloped vacant lot in downtown Petoskey and 60 new apartments for individuals and families in our community.

These private dollars will be leveraged alongside traditional loans as well as state and federal housing program grants and loans, all necessary to bring the construction of this apartment building to fruition.

The proposed Lofts at Lumber Square. Design plans are still in progress and are subject to change.

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Expected Rents: $1,150-1,550 The rents are affordable to households earning between $46,000 (oneperson household) and $101,880 (five-person household), assuming they will pay no more than 30 percent of their income. These apartments will provide a safe, attainable place to live for a variety of community members, including skilled trades people, nursing assistants, teachers, hospitality and retail managers, emergency dispatchers and others.

Building the Lofts means more employers and employees will be able to live near where they work. Building the Lofts means more people essential to a vibrant and safe community will be able to live here.

View from corner of Emmet and Fulton streets

Typical two-bedroom floorplan

Community Foundation purchases land

Missing Middle Grant Awarded

State Grant and Loan Program Approval

Construction Groundbreaking

May 2022

November 2022

March 2023

Summer 2023

Complete Construction

Occupancy

December 2024

May 2025 07

Why the Community Foundation?

The Community Foundation has a track record of working alongside various community partners to find solutions to our area’s housing crisis.

Since 2017, the Community Foundation has been a core partner of the Little Traverse Bay Housing Partnership, working to bring awareness to the crisis. Throughout our organization’s history, we have supported affordable housing through grants both for building homes as well as for organizations working in the housing space.

In September 2020, the Community Foundation made its first zerointerest, short-term loan to Northwest Michigan Habitat for Humanity, allowing them to purchase a quality, factory-built modular home for a property in Oden, a home now owned and occupied by a mom and her two children.

In May 2022, the Community Foundation purchased the Gruler property at 900 Emmet Street to preserve the property for future workforce

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housing, namely the Lofts at Lumber Square apartments. Since that time the Community Foundation has worked closely with Haan Development of Harbor Springs to secure additional funding and financing for the project. The Foundation recognized that one of the key barriers to new homes being built is a persistent and consistent funding gap. We know that this is THE issue to solve in our area, and we are in a position to help solve it. Private developers and nonprofit organizations cannot do it alone.

“We need to be one of the risk takers in our community, because there are no easy problems left to solve.”

- David L. Jones (DJ), Executive Director

Ben Slocum Beards Brewery Co-Founder The Employer Story When Ben Slocum and Peter Manthei opened Beards Brewery in downtown Petoskey in 2012, they were a small enough operation that they could find the staff they needed locally. As their business grew and changed locations, however, the challenge of finding and retaining employees escalated.

“We noticed it about seven or eight years ago,” Ben Slocum recalls.

“We recruited our first brewer from the Detroit area, he moved here and, when he couldn’t find a place to live, stayed in a camper trailer on his uncle’s property for the summer. That was fine until summer was over and he couldn’t find a permanent place to live. He had to move away from the area.”

Since then the housing crisis has only gotten worse, and Ben notes additional impacts on their business.

“What we have seen is the demand for our services is higher,” he shared, “but our ability to meet that demand is lower as staff crunches get worse. Our hours of operation are getting hit pretty hard. We have cut hours but are still met with more and more pressure which leads to staff burnout.”

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Project Funding Model Left to Raise 21.3%

$3,700,000

Senior Mortgage Loan

$6,775,000

39.1%

Raised for Land Acquisition 2.6%

Grants

$450,000

$3,085,000

17.8% $2,500,000 MEDC Reviatlization and Placemaking Grant $585,000 MSHDA Missing Middle Housing Program Grant

$3,330,000

CRP Loan 19.2%

TOTAL REVENUE: $17,340,000

Call To Action Our community and our economy are impacted by the lack of attainable housing. We believe the Lofts at Lumber Square is part of the solution—one we know works—and you have an opportunity to play your part in creating housing for those contributing to our community who cannot find homes. Together, we will invest in our people, improve our community, and create long-term attainable housing solutions.

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$4M $13M+

in philanthropy will leverage an additional in other funding sources.

Every philanthropic dollar donated to this project leverages three dollars from grants and low-interest loans, keeping this housing attainable for community members.

WAYS TO GIVE Through your charitable gifts, you will be creating homes and making our community stronger.

Cash

You can make an outright gift of cash, or pledge your support. Pledges can extend two tax years (2023 and 2024) and donations may be eligible for tax deductions.

Gifts of Stock

Stock, or other appreciated assets, may qualify for a charitable tax deduction. If the stock has appreciated in value, you may avoid paying capital gains upon transferring it to the Community Foundation.

IRA Qualified Charitable Distribution

Individuals who are a minimum of 70 1/2 years of age can make a Qualified Charitable Distribution of up to $100,000 per individual IRA to the Community Foundation. *Consult your professional advisor regarding the most advantageous ways for you to give.

PROJECT LEADERSHIP David L. Jones (DJ), Executive Director djones@phsacf.org Sarah Ford, Director of Community Philanthropy sford@phsacf.org Petoskey-Harbor Springs Area Community Foundation 1349 US-131 Suite A Petoskey MI 49770-8334 (231) 348-5820 www.phsacf.org

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