03/22/2006

Condos eyed for office building

By
Record-Eagle business editor

Record-Eagle/Tyler Sipe
Developers propose converting the Harleysville Lake States Insurance Building on West Bay into residential waterfront condominiums. The building is located on M-22 near Cherry Bend Road.

GREILICKVILLE — Leelanau County's signature office building — the striking, bayfront Harleysville Insurance office along M-22 — would be converted to 70 high-end condominiums under a proposal from a Dallas-based developer.

Fritz Duda Jr. presented a preliminary "adaptive re-use" proposal to the Elmwood Township Planning Commission this month and outlined a $25 million-plus redevelopment plan for the 65,000 square-foot office building that went on the market last year.

"We think this project has a lot of merit," Duda said. "We see it as a unique product type in all of Traverse City."

The company wants to amend the township's Shoreline-Commercial zoning district to provide for additional residential housing, currently limited to nine units per acre. A specific amendment is still being drafted, but developers want to convert the office building into approximately 70 high-end condominiums known as the West Bay Yacht Club that Duda said would be priced with other "best in class" area waterfront condos that top $500,000.

The proposal comes as the township tries to craft a more cohesive land-use pattern along the M-22 corridor. Elmwood officials want to increase pedestrian activity between the public beach and marina, and other attractions like the Maritime Heritage Alliance and the Great Lakes Children's Museum.

"Each property seems to be independent of the other," township planner Bill Swanson said.

The township wants to insure that any use change at the Harleysville building would fit in with Elmwood's changing waterfront. Increased traffic from a residential use, and physical structural changes concern the township. Plans are to renovate the building with windows and balconies for the residential units, while an existing charter boat business would remain.

"I think our major concern is how big is too big?" Swanson said. "And what is it going to look like in the end?"

"My big question is how does it fit in with our plans for our waterfront?" Supervisor Derith Smith said. "If the use is changed, how does it impact the neighborhood?"

The building was constructed in the early 1980s as the Reef Energy Center by a local energy exploration company that never opened the structure because of a downturn in the oil and gas industry. It features amenities that set it apart from much of the area's commercial office space — 12-foot ceilings, spacious hallways, mirrored walls, an elaborate water feature and a small theater.

The structure is the township's top generator of property taxes, based on an estimated cash value of more than $8.2 million.

Harleysville put the building up for sale last year. Company officials said they like the space but it's the only office building it owns other than its headquarters outside of Philadelphia.

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