This series, Block by Block, is supported by FHLBank Indianapolis, IFF, and CEDAM, and follows emerging and diverse developers building affordable housing in Michigan.
What happens when you mix affordable housing with a cafe, early child education center, co-working space and performance venue?
The answer: A co-operative aimed at fulfilling the missing needs of its surrounding community. Commongrounds -- located at 414 E. Eighth St., Traverse City – is a four-story, 47,000-square-foot multi-use building that also includes short-term housing rentals, a collaborative cafe called NoBo Mrkt, and an osteopathic center.
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CommongroundsThe exterior of Commongrounds in Traverse City. It opened late last year, following a multi-year development. The organization’s mission is to “build a more empowered community through cooperatively owned places that connect people and actively integrate wellness, arts, family and food.”
Kate Redman, co-founder of Commongrounds and project, said the co-op was a way for the community to influence development that would be serving them and fill in gaps that would be difficult for traditional developers. She said it also builds social infrastructure, which is especially important in rural areas.
“We’re, as a country, suffering such an epidemic of physical and mental illness that’s just tied to loneliness and people not being connected enough to each other,” she said. “So having these physical spaces where you don’t have to know somebody already to go, but you can go and connect with other humans in that space is really important.”
One of those spaces is The Alluvion, a mid-sized performing arts and events space located on the building’s second floor. It features a stage and a bar, plus a small built-in recording space that enables live streaming and professional audio and video recording.
It’s mostly used as a concert space, but it also hosts film screenings, live theater, comedy shows, poetry slams, book launches and public talks as well as private events.
With a capacity of around 150 people, the space fills a void of mid-sized performing arts spaces in Traverse City, said Matt McCalpin, The Alluvion’s director of operations. He said its high production value and curated performances make it unique, especially its ability to present big names -- like Cuban singer Omara Portuondo and American jazz guitarist Bill Frisell – in an intimate setting.
“We call ourselves a small venue doing big things,” he said.
Down the hall is Commonplace, a co-working space that largely serves non-profit organizations and entrepreneurs.
What sets Commonplace apart is a focus on creating a collaborative support network among these small groups, which are often crowded out by larger economic development organizations and service-providers, said Nick Beadleston, executive director who also sits on Commonground’s governance board.
While hard-skill training in things like marketing, board development and fundraising are available in the community, entrepreneurship can be incredibly isolating, and Commonplace offers an emotional support network, he said.
“We’re seeing really awesome things happening by just holding consistent and dependable space for entrepreneurs to get together, talk through what they’re facing and collaboratively develop solutions,” Beadleston said.
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Tyler Franz Alluvion staff photo at the house grand piano.
Co-founded by Redman in 2016, Commonplace was one of the founding organizations of Commongrounds. At the time, Redman was a practicing attorney working primarily with non-profit organizations and small businesses and created a space to share with her clients. Higher Grounds coffee shop owner Chris Treter approached her about joining him in a new location. The two combined their names, and Commongrounds was born.
“[The name] is pretty confusing as it turns out,” Redman said. “In retrospect, maybe a different name would have been better, but Commongrounds certainly fits what we’re doing.”
Redman said oftentimes locals feel current development is something that happens to them instead of for them, and it was important for organizers to create a space that they needed and wanted.
“We liked the idea of doing it as a community-owned real estate co-operative to also just give the community the confidence that this building is going to be what we say it is, and if we invest in it as a community, it will be here long-term,” she said.
Organizers sought out input from the community on what other development would best suit them before embarking on an investment crowdfunding campaign, encouraging them to invest in “Main Street.”
Redman said it was important to organizers to have a broad base of moderate-investing stakeholders than fewer, high-investing ones.
“So often who you owe as a stakeholder is often who invests in you and wants to be accountable to the community because that’s who we were trying to serve.”
They also offered equity-share ownership for $50 and currently have more than a thousand owners.
On their first round in 2018, organizers raised $837,000, Redman said, which they were then able to use to leverage additional funds to support the $20 million development, including a $3 million loan from IFF, a non-profit community development financial institution.
Chris Uhl, IFF executive director - Eastern Region, said some of the project’s most appealing aspects were its early childhood care and affordable housing, which are lacking in Traverse City. Apartment rents are determined by income and 75 percent of the units are offered below market rate.
Uhl said the co-op model lowers community resistance to affordable housing and is a creative way to solve a number of problems.
“I think in order to solve our housing challenges, we have to innovate,” he said. “There has to be integration across multiple spheres, including how those projects are funded.”
The co-op features 18 housing units over two floors, made up of studio, one-bedroom and two-bedroom apartments. The space also includes shared common rooms, laundry, a gym, deck and balcony. Apartment rents are determined by income and 75 percent of the units are offered below market rate, with units starting as low as $525 for a suite, which is a private bedroom with a shared bathroom and living areas.
The rooms are in high demand and currently at full occupancy. Residents are selected by lottery, with preference given to those who work in Traverse City.
The co-operative model is not without its challenges. Redman said the build was more costly than expected, and they’re still solving financing issues. Decisions must be made collectively, which can slow down the process. Space and expansion can be limited to not compete with existing tenants.
Coming out of the pandemic, Beadleston said many co-working spaces offered coffee/food service or event rental spaces for ancillary streams of income, which they can’t do, since those spaces already exist at Commongrounds.
He said a challenge with Commonplace and Higher Grounds specifically, is people would use the cafe as a free co-working space, which both took away potential users of the co-working space as well as held up tables at the cafe, reducing turnover. The cafe offers a variety of services, including meals from breakfast-dinner, a full craft bar, and incubator kitchens.
With The Alluvion, they had challenges when Commonplace was used unsupervised after hours as spillover space when acts were too large for its green room.
But finding solutions is one of Beadleston’s favorite aspects of working in a co-op.
In the case of Higher Grounds, his team worked with the cafe to develop messaging for its employees on how to communicate with customers that a designated co-working space exists in the building, which may better suit their work needs than a busy cafe.
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Katielynne GoughertyThe Alluvion offers musicians and other performing artists an intimate space. With the spillover from The Alluvion, Commonplace negotiated an arrangement where the co-working space could be used as a spillover in exchange for reduced rental rates for private events.
“It’s not easy to cohabitate a building, but we are all continually trying to figure out how we have models that are mutually reinforcing instead of competitive,” he said.
Going forward, Commongrounds is planning on opening spaces for programming that aligns with the organization’s focus on food, family, arts and wellness and would like to expand for similar projects throughout Traverse City, as well as offer training to other communities, Redman said.
Beadleston said he’s looking forward to sharing their lessons learned with others.
“I’m just continually grateful to be in this building,” he said, “and to be solving some of the challenges that we’re trying to solve both in our community and beyond with the group of people that are in here.”
Erica Hobbs is a writer based in Detroit with a passion for arts and culture and travel. She has reported for numerous news outlets including the Detroit News, Fodors, Business Insider, Reuters, WDET and AnnArbor.com (now the Ann Arbor News), among others.