WLHS: An Update on Zoning, Referendum and Election

The City Council approved the zoning. Now on to a referendum.

The Brief

Despite overwhelming opposition to the zoning, on Monday May 20th, the City approved the new zoning ordinance.  We expected this.  Our plans are to file a referendum to rescind the ordinance, and to run a new slate for Mayor and City Council in the fall.

“If the City Council is willing to approve with this much opposition, why would they care what anyone thinks if a developer wants to do more?”
A Harbor Springs city voter

Recent Events

1. As of May 20th, we approached the city with the proxy of 1,000 area property owners and 391 Harbor Springs City property owners opposing approval. 

2. Of the 391 who signed the “Protest Petition,” their households represent about 200 city voters. For reference, 38% of the city's property owners are voting households.

3. Our group collectively asked the City to pause approval, engage the collective of constituents through the summer, and temper the zoning. (See What Needs to Change)

4. More than 50+ people in person and about 100 people online attended the City Council meeting on Monday, May 20th (See Replay) 

5. After citizen comments, which were universally against with a few for, the City Council approved the zoning without any material discussion and concluded the meeting. It appears the zoning will go into effect on June 1, 2024.

6. The city's decision to ignore property owners has strengthened the resolve of voters and property owners to drive changes in City leadership.

7. We anticipated the City would ignore the property owner's request, so we are launching a voter-backed referendum as planned. 

8. If we secure 300+ signatures from voters in the City of Harbor Springs on the referendum, it will pause the zoning ordinance and place it on the fall ballot.

9. Our long-term focus is zoning, a referendum, and electing new city leadership in the fall.  

10. The city needs leadership that can engage the entire community, navigating through the pressing challenges of growth, labor, and community. 

11. If you want to help the referendum, the election, run for elected office, or know a person that should run let us know (weloveharborsprings@gmail.com). We are looking for people with the capacity to lead and build consensus across multiple stakeholders.

Referendum

A referendum would rescind the zoning ordinance. We would then, under new city leadership, restructure the zoning as outlined in What Needs to Change. No one is against sensible development or the right to develop property. Our principal concerns are removing virtually all Planning Commission oversight, excluding property owners from the zoning discussion, removal of notice to neighbors and moving major approvals to an unaccountable administrative function.  

We need 25% of the voters to sign a referendum to get on the ballot.  The process for a referendum is the following:

1. Pick a start date

2. Gather signatures from 25% of the voters within 30 days of our start

3. The City Clerk then has 14 days to certify the petition

4. The zoning is then paused

5. The City General Counsel then fashions the ballot questions

6. It is placed on the fall Ballot

7. If more than 50% of the people voting support the referendum, the zoning is struck down

8. We would then work with the City to redraft and approve new zoning with the input of property owners and other interested parties. 

The Fall Election

The Mayor’s seat and two city council seats are up for election this fall.  We Love Harbor Springs was formed to improve the quality of city government. 

The city has a lot of challenges ahead that need good leadership. West Traverse, Petoskey and the region are growing. The population in Harbor Springs is changing, making it harder to find labor to run businesses, the fire department, and police. There are multiple unfunded improvements planned to improve the city.   

Part-time residents strongly support helping, but current city leadership continuously leaves stakeholders out of the conversation. We need city government focused on the breadth of strength across residents, property owners, visitors, and adjacent townships. City government needs leadership that engages these groups to keep Harbor Springs on track now and into the future. It needs a City manager who understands how to work with an array of talent and citizens to solve tough problems. We need leaders who understand how to run larger organizations with many stakeholders and who can bring people together.

Our intent is to support candidates for the Mayor and two city council seats. To run, you must have been a registered Harbor Springs voter for more than two years.  We will be spending this next month building a slate of candidates. 

Many of you can register to vote in Harbor Springs, even as part-time residents. This may have no impact on your homestead and tax status. Take a look at the State rules about registration online. Also discuss this with your children who may have registered at their college rather than in Harbor Springs.

Some Data on WLHS

Our group continues to grow. It includes the voters, property owners, area townships, and visitors who love Harbor Springs. The data from the last 30 days shows that:

• 918 Signed on the Property Owners Protest petition

• Newsletter with more than 1,013 subscribers, 3,082 readers, 8,000 views, and 70% open rate (Subscribe)

• Facebook: 145 Followers, 67 likes and growing (Please follow, like and comment)

• 5 followers on Twitter, but a start: Twitter

• 60+ Donors: (Please donate) - This is a 501(c)(4). All monies received will go towards legal action, public relations, and political impact.       

• 955 Supporters on Change.org

One of Many Problems with the New Zoning: Administrative Review

Under the new zoning, an Administrative Review replaces the Special Land Use Guard Rails and protections found inside the current zoning code.  The clear intent is to provide developers an avenue to shortcut the requirements of the long-standing Planning Commission review.

For example, the proposed Planned Development (PD) ordinance purports to solve a problem that the City’s zoning code adequately addresses in its variance procedures. The original zoning code is carefully designed to promote development within the code's carefully constructed guardrails, and the variance procedure is designed to solve problems where development needs are not met by strict adherence to the code. The proposed PD ordinance essentially hands developers a tool to remake the zoning code for their properties as they see fit.

The minimum requirements for approval of a PD under the proposed ordinance are not only vague but also do not impose any reasonable limitations on what can be done. This could lead to scattershot development throughout the city, notwithstanding promises to advance development in accordance with the City’s Master Plan. 

The administrative review functions by:

1. The City Manager

2. The City Assessor

3. The City Attorney

4. The Chair of the Planning Commission

5. A hired staff member of Beckett and Raeder (City Planner) and

6. A Planning Commission Appointee.

No neighbors, no discussions. Six people in a room with the power to decide without your input.

Will Developers Build?

The Mayor and City Council do not believe developers will accelerate development.  We are unclear how they know this or what talent they have to forecast future real estate markets.  

If the Mayor’s forecast is wrong and developers do turn to Harbor Springs, the new zoning removes all the firewalls to control development.  While it makes sense to simplify approval of garage remodeling and such.  It makes no sense to allow “by right” frictionless approval of duplexes and other concentrated developments. Under “By Right” the City has no control over the speed and scope of development. Towns like Austin, Aspen, Vail and the Hamptons have lost control of development because of developer-friendly “By Right” zoning.

What are the signs that lead us to believe development will accelerate? It is already starting.

The Greatest Transfer of Wealth: American baby-boomers, who make up 20% of the country’s population, own 52% of its net wealth, an estimated $76T.  Older parents will build family homes in northern Michigan. And/Or gifting $76T at death to millennials with families looking for second homes.

3rd Street Lot for Sale: A 0.44 Acre buildable lot on 3rd, enhanced by the new zoning,  was offered at $899K after the zoning approval.  This lot was last bought in 2020 for $298K.

Petoskey Planned Unit Development: A new 25-Unit Development of $3M per unit homes is offered for sale just east of Petoskey. Under the new Planned Unit Development provisions of the zoning the same sort of development could be built at Bluff Gardens or even nearby in West Traverse. 

What have we done

1. Shifted the conversation to transparency and accountability.

2. Dramatically increased digital outreach on how government runs in Harbor Springs.  Exceeding the City’s efforts by more than 10x, and far exceeding the reach of Harbor Light.

3. Created We Love Harbor Springs, a 501(c)(4) also known as a PAC (Political Action Committee) 

4. Established the core messaging and network for We Love Harbor Springs

5. Built an organization of 30+ volunteers helping to run WLHS

6. Raised seed money to launch the effort

7. Hired proper legal council 

8. Held two town hall meetings to improve understanding. 

9. Attending the various city subcommittees to elevate the discussion and broaden understanding

10. Assured the the Planning Commission and City Council meetings are well attended, presenting a public voice, and challenging city officials with facts and data.

Help Needed

This is a volunteer organization.  If you can help on any of these issues, please contact weloveharborsprings@gmail.com

1. Watch Dog: There are numerous sub-committees and meetings in City Hall.  Often poorly attended.  Our intent is to attend each meeting, summarizing important findings in this newsletter.  We need volunteers to cover these meetings during the summer.  

2. Form a slate for the Fall Election - Mayor and two city council seats.  

3. Raise funds for PAC to support the election and long-term positioning of good city government.

Why Now? DDA TIF

We keep asking, “Why Now”.  Why is it so important to make such a drastic change to the zoning?  

One reason is the DDA TIF.  The Harbor Springs Downtown Development Authority (DDA) is a designated zone for Tax Increment Financing (TIF).  The TIF is a way for the City to get more revenue from real estate development.  It works like this (Simplified for explanation, a bit different in practice)….

1. A property in the DDA Zone pays property taxes of say 20k/year

2. A developer rebuilds the property, increasing the property value, and taxes to say $35K per year.

3. If in the TIF Zone, Emmet County who collects the taxes returns the $15K difference to the DDA, which is controlled by Harbor Springs.  The money is used to improve related infrastructure to support the growth.

4. After several years, the taxes revert back to EMMET county to distribute using their normal schedule of taxes.

The city only gathers this extra tax revenue if the property is redeveloped and the value increases.  The bigger the increase the greater the TIF value. 

A benefit of the new zoning is the expansion of the Central Business District to fill the boundaries of the DDA zone.  The new zoning allows for commercial development of more valuable buildings in place of previously residential districts.

The new zoning also removes Planning Commission approval on many development decisions.  So a developer can now look at the zoning and plan out a development with less risk.  The City benefits from more revenue.  The TIF motivates the City Council to stream line development.

To protect some residential concerns over the larger business district, the city formed an “Overlay” zone that maintains some residential zoning in the Central Business District.  While this addresses immediate concerns about over-development, a future City Council eager to get more TIF dollars, could easily eliminate the overlay zone with a 3 of 5 vote on City Council.  

Overlay Zones are a new concept with no case law. A potential developer could threaten to sue the city challenging the overlay zone.  It is unclear how the courts would act.  More likely though the City Council would simply approve the change to wider commercial zoning to avoid a court case and to gather the revenue from the resulting TIF.

Recent Letters….

Letter to the Petoskey City Government.  

Background…..

This video of the May 15th, 2024, Petoskey Planning Commission was recently brought to our attention. This letter below was written in response to our review of that meeting, in which an employee of Beckett & Raeder, the Harbor Springs and Petoskey City Planner, characterized the Harbor Springs zoning opposition as conspiracy theories and unengaged summer property owners.

May 25, 2024 

Dear Shorn,

John Iacoangeli made some comments on your May 15 PC meeting that did not properly capture what is going on in Harbor Springs:

If it would help the Petoskey PCs process as they review new zoning, I am glad to provide a more accurate characterization of the issue.

By way of background, 62% of HS property is non-voting part-time residents who live here for 3-12 months of the year.  The city has been working on zoning for 2 years.  For the most part, in a sub-committee of 4 people with limited public oversight.  When public meetings did occur, they were typically held in winter.  The open houses were in the winter.  We have reviewed many of the meetings, and the discussions were superficial with regard to concerns of by-right, duplexes, and changing of zoning districts.

The Harbor Springs zoning update was not really in a comprehensible form until February of 2024.  When a few of us saw the scope of change was drastically more than we understood, we raised concerns.  We uncovered substantive errors the PC was not even aware of.  For example, somewhere in the editing process, the consultants or someone in the sub-committee converted a residential district into a commercial district, drastically changing the zoning for that neighborhood.  And still to this day, no one can say who made that change.  

As a result, with further review property owners discovered many errors and nuances. We raised these specific issues with the PC and were, for the most part, rebuffed as too late in the process. We asked the city to notify all property owners to help bring them up to speed; the city refused, instead pointing out that the owners should have been involved in all the meetings.  

We then created We Love Harbor Springs to communicate with the property owners the city refused to notify.  That process has built an engaged set of about 1100 area property owners that have property in Harbor Springs, or are active in Harbor Springs (restaurants, Marina, etc).  

390 of the property owners signed a petition asking the city to pause approval.  To allow them to engage.  28% of those who signed were voters.  The petition asked for specific changes in the zoning.  The bulk of the concerns was Beckett's recommendation that moved many decisions to "By Right", expanding duplex/triplex and removing the PC from many development issues.  

Our further concern is that private equity groups are very interested in building premium properties in Harbor Springs to tear down homes and replace them with higher-density duplexes at 1M+ per unit. While the degree of development is speculative, the changes in the zoning remove any ability of the city to adjust the pace of these changes.

John's comment about conspiracy theories or just seasonal property owners is irrelevant and baseless.  The property owners in question represent 80% of the property tax base and include a material set of resident voters who own property.  The concerns are about guardrails on the pace of development in a town with constrained space and resources.  The 390 property owners are concerned about the RRC recommended By Right zoning changes, not a take over by Lansing.

My lesson from this is:

1. Beckett's expertise is about streamlining development.  Which is an important component to the discussion.

2. The planning commission needs to ensure the pace of development is controlled by the community, or land prices will spin out of control.  Beckett is by no means an expert in this.  The City represents the people, not Beckett.  These changes are new property rights.  Changing them back if development increases would result in a 5th amendment claim the city would lose.

3. Contact every property owner.  Mail drop them.  Get their emails.  This is standard practice in the rest of the country.  Harbor would not do this.  That created a distrust.  When doing a massive overhaul, the legacy of inconsistent zoning over 80 years lands in your lap at the moment.  Only the property owner really understands the nuance of their property.  Empower them to help you.

4. Meet with people in an open discussion in each zone.  Do it this summer when the population is at a maximum. Do it outside of the rigidity of a PC meeting.  Zoning will improve through engagement.

5. Provide detailed minutes that list the names and positions of people who ask questions so that others can contact them and collaborate to build better ideas. Beckett has a zoning template. Every client basically gets the same standard set of recommendations. Tailor those to your community, even if that makes Beckett's job a bit harder. 1+1=3.  You want the one person with position A to engage with the person with position B, and have them realize a better answer C.

6. Do not delegate the discussion to subcommittees hidden from the Open Meetings Act (OMA).  That fosters distrust.

7. Over-communicate the scope of change.  In Harbor, until late Feb 2024, this was communicated as fixing idiosyncrasies in the code - like one neighbor's porch encroaching on another due to an artifact of old zoning code.  Once presented, it was a dramatic change to approvals and by-right.  Then, the city blamed the citizens for not paying attention.  Why would we think to pay attention, given the original down play of scope?  Don't make this mistake.  Help the city understand how this may change the pace of development.  Get their feedback. Does the city want to become the next overdeveloped Aspen or want to keep housing prices in check?  It's a tough balance.

8. Keep in mind there is a massive amount of private equity developer dollars that are looking for projects.  At a scale most can not imagine. Places like Blackstone develop 500k residential properties in a year.  These firms are looking for premium locations for second homes.  A blessing and a curse.  In a small town like Harbor Springs, that type of development would wipe out the middle class and replace it completely with high-end second homes.

I respect John's talent as a city planner, but he has no basis to represent the culture of Harbor Springs or Petoskey. His comments on the PC were not factually accurate. I have never spoken to him, nor to the best of my knowledge, have any of the 1,000 people in our group. He knows absolutely nothing about We Love Harbor Springs as a group. The supporters of our PAC represent every demographic in the HS community. The PAC was created to reverse declining transparency.  It has nothing to do with RRC concerns.  We are concerned about losing PC control over the rate of development.

I have looked at some of your PC meetings, and you are doing a massively better job. Your minutes are detailed, and your PC is asking constituent questions.  

If anyone would like to discuss our experience in more detail, I am more than happy to talk by phone and help in any way to avoid some of the challenges in Harbor Springs.

Good luck.  Petoskey is a great town.  You are doing great work.

Carter Williams 

carter@oiventures.com