“What is the most magical building that we could build here? What would the community love to see that would be a great place to walk or bike to and really add to the quality of life for the people that live here and work here?” These were the questions that inspired Kate Redman and her team to create Commongrounds Cooperative, a nonprofit real estate cooperative currently under construction in the 8th Street Corridor of Traverse City, MI.
The four-story building will be a mixed-use cooperative owned by community members and tenants. Redman describes the project as building the physical space, or social infrastructure, that supports greater social capital, leading to stronger communities.
“We wanted this to be a space where everyone in the community felt welcome.”
“We wanted this to be a space where everyone in the community felt welcome,” Redman explains. “And we wanted to ensure people would feel ownership and pride and be engaged with what’s happening in the building.”
Commongrounds has received overwhelming support from the community. When Commongrounds first launched its early bird ownership campaign in November 2018, it exceeded its goal of 250 community owners by reaching over 350 owners within a month. Today, Commongrounds has over 600 community owners, 132 of whom have become community investors that have invested a total of $1.4 million to support the $15.7 million project.
Like co-ops elsewhere, Commongrounds’ approach will help build community wealth as a portion of earnings on the investment in the building are distributed to the 132 community investors who contributed a minimum of $500 each after securing ownership in the co-op by purchasing a $50 share. By setting a minimum threshold of $500 for community investors, Commongrounds sought to make participation in the project as accessible as possible to a wide cross-section of community members.
“I feel very fortunate that the community was willing to give us their trust and their help,” Redman says.
In a Nutshell
What: A new, four-story mixed-use facility for Commongrounds Cooperative, a nonprofit real estate cooperative with a goal to develop real estate that meets community needs and increases quality of life in the region
Sector: Community Development
Location: Traverse City, MI
Cost: $15.7 million
- Community investors
- Coastal States Bank
- U.S. Department of Agriculture
- Michigan Economic Development Corporation
- Grand Traverse Brownfield Development Authority
- Property Assessed Clean Energy (PACE) program
- $1.5 million gap loan from IFF
IFF Support: $1.5 million loan supported by an investment made to IFF by the Rotary Charities of Traverse City
Design: Environment Architects
General Contractor: Hallmark Construction
- 10 new affordable housing units
- 40 ECE slots created
The building was designed by local architect Ray Kendra of Environment Architects to provide a community-center feel and is being brought to life by Cunningham Limp. Commongrounds’ tenant owners reflect the building’s focus on four crucial aspects of community: wellness, arts, family, and food. All of the tenants are based in or near Traverse City, including:
- Higher Grounds, a coffee-provider and certified B-Corp
- Iron Fish Distillery, Michigan’s first farm distillery
- Groundwork Center for Resilient Communities, which will manage programming for a teaching kitchen focused on making culinary medicine accessible to all
- Crosshatch Center for Art & Ecology, which will continue its work building stronger communities through the intersections of art, farming, ecology, and economy
- Commonplace, a community innovation hub and co-working space also founded by Kate Redman
The facility will also include an early childhood education provider, housing for the local workforce, a performing arts space with seating for up to 150 people, and a food hall led by chef Tony Vu equipped with kitchens that will be accessible to local food entrepreneurs.
Commongrounds is working with the community to incorporate the early childhood education (ECE) center in the building in part because a 2020 IFF study, “Need for Early Childhood Education in Northwest Michigan,” identified that there was a substantial need for more affordable ECE centers in Traverse City. Commongrounds is exploring the Wildflower School model, which empowers teachers to run their own small learning environments, while providing high-quality early childhood education at an affordable cost to its community members. The Wildflower model is rooted in equity and cultivates diverse, inclusive learning environments designed to dismantle systems of oppression and honor the common humanity of all people. One of the ways Wildflower has accomplished this in other locations is through a dedicated effort to cultivate teachers of color and support them on their journeys toward leading their own schools.
To further provide for the needs of the community, the third and fourth floors of the building will contain residential units, the majority of which will be designated as workforce housing. The recent report “Northwest Michigan Target Market Analysis,” conducted by LandUse USA, analyzed the housing needs of the area and found a significant demand for lower-priced housing units. As such, Commongrounds will provide a range of pricing options that are affordable to people who work downtown and in the 8th Street Corridor of Traverse City.
Redman was familiar with IFF from her previous work as an attorney supporting small businesses and nonprofits and helping them with financing. Throughout the planning of Commongrounds, IFF and Commongrounds had conversations regarding the project. At the “11th hour,” there was an unexpected funding gap and an opportunity emerged for IFF and Commongrounds to partner together, with IFF providing a $1.5 million loan to Commongrounds. “IFF showed up in force for us and helped us move through that process quickly,” Redman says.
IFF’s loan to Commongrounds was supported by an investment made to IFF by the Rotary Charities of Traverse City, which “has done a lot for the community,” according to Redman. When asked about what Commongrounds means to Traverse City, Sakura Takano, Rotary Charities’ Director of Community Assets and Impact Investing as well as an IFF Board Member, said, “We have been delighted to see that IFF has the capacity to understand and support community-led projects in Northwest Michigan. This project highlights the impact that grassroots partnerships between community members, nonprofits, funders, and local government can have to create a lasting asset for our region.”
The Commongrounds team broke ground in December 2020 with a virtual celebration, and the project is estimated to be completed in spring of 2022. They have a live construction camera and provide regular construction updates to the community. When asked what she is most looking forward to, Redman shares, “I love picturing sitting in the café and hearing the pitter patter of people talking to each other and greeting people, and the smells of the food and the coffee, and hearing some music being practiced upstairs, and being able to walk through the building and see a lot of familiar faces and people running into each other.”