TC faces another tall buildings lawsuit

·4 min read

Jan. 23—TRAVERSE CITY — A charter amendment requiring Traverse City voters' approval for new tall buildings is again in the crosshairs of a legal challenge.

The developer challenging the requirement that any new construction taller than 60 feet go to a vote is a familiar name as well: 326 Land Company and managing partner Tom McIntyre. Several of the arguments in a recently filed complaint echo past ones as well: the requirement violates state law and the Constitution, unfairly singles out 326 Land Company's project and allows voters to turn down a project on a whim.

What's new is the court. This time, the suit is filed in U.S. District Court's Western Michigan District.

McIntyre said the company, which plans a five-story, 60-foot-tall building with a few structures on the roof, had no choice to sue after the city issued a stop-work order in late 2021.

"The reason that we filed this suit is, I think our property rights have been terribly violated here, so we felt that we didn't have any alternative, really, other than to seek a legal remedy," he said.

That order came after 13th Circuit Court Judge Thomas Power ruled that rooftop structures have to be counted toward the height of a building. His decision put a halt to plans by Innovo TC Hall, which planned a building on Hall Street.

By city zoning standards, the building would've been 60 feet, as previously reported. Those same standards are referenced in the city's implementation policy for the tall buildings vote requirement.

But Save Our Downtown, a nonprofit that supported the tall buildings vote when it went on the ballot in 2016, argued that structures rising above roof level — an atrium that topped out at 76 feet, for example — are part of the building and, therefore, count toward the height.

Power agreed, and didn't buy the city's counterarguments that voters in 2016 would have understood building height to mean how city zoning defines it — from the grade to the roof deck of a flat-roofed building, in both Innovo TC Hall and 326 Land Company's cases.

Key to 326 Land Company's latest lawsuit is whether that ruling impacting Innovo TC Hall applies to its project across downtown on State Street, McIntyre agreed.

The complaint points to Power's words stating he couldn't apply it to projects that have already been approved, much less built, in part because they're not parties to the Innovo TC Hall suit.

But the city issued a stop-work order because 326 Land Company's building included two rooftop structures that would stand taller than 60 feet, according to the complaint.

"We've talked to the city and the city so far has taken what I would call a firm stand on their position," McIntyre said.

The developer quickly modified its building plans so it could keep construction moving forward, according to the complaint. But if 326 Land Company is forced to lop off the top floor to satisfy the city's interpretation of Power's ruling, that would cost the company damages of more than $7 million. That could worsen if customers who paid a deposit for a condominium opted to withdraw.

Messages for city Attorney Lauren Trible-Laucht weren't returned Friday. She previously defended the city sending the stop-work letter, rejecting the developer's arguments that it has a vested right to keep building.

While 326 Land Company had demolished the former law office at 326 State Street and started digging for the building's foundation at the time of Power's ruling, a court likely wouldn't consider that to be substantial progress required to give the developer a vested interest, she said previously.

The company previously planned a 100-foot-tall building at the same site, as previously reported. Power in 2017 dismissed the company's first suit against the vote requirement, calling it premature.

Then, voters rejected the developer's ask to build the building in 2018. The company refiled its suit shortly after, which Power ultimately dismissed. McIntyre and the company opted not to appeal, instead redrafting plans for a shorter building.

The latest suit asks a federal judge to rule that the tall buildings vote requirement is illegal and unenforceable because it violates the developer's Constitutional due process rights, among other reasons.

Power rejected similar arguments in June 2019 when he found it doesn't run afoul of the Michigan Zoning Enabling Act, nor does it unfairly single out 326 Land Company's plans. Nor was he moved by arguments that voters could reject a project for whatever reasons, noting democracy can be messy.

Jim Scales, an attorney for 326 Land Company, referred questions about the lawsuit to McIntyre, who in turn declined to discuss some of the complaint's specifics.