Planning commission OKs public hearing for ordinance allowing below-grade commercial and co-living uses in B-2 downtown district

The Petoskey Planning Commission on April 23 authorized a public hearing to consider an ordinance amendment that would formally allow certain below-grade commercial uses and limited co-living residential uses in the B-2 Central Business District.

City planner John said the amendment is intended to clarify existing practice: several downtown businesses operate on lower levels but the written ordinance, as currently drafted, can be read to prohibit below-grade retail and service uses. The proposed change would explicitly permit retail, restaurants, professional offices and certain civic uses below grade provided those spaces comply with building and fire codes.

Commissioners discussed the co-living definition in the draft, which limits co-living units to four private bedrooms and requires a central kitchen and living area. Members noted state-licensed group homes remain subject to state rules and would not be precluded by the local ordinance.

John said the downtown property owners’ group (DMP) had been informed and staff requested formal written comment from them. Commissioners agreed the revised language should be scheduled for a public hearing at the next council-cycle meeting and that staff should prepare an executive summary of substantive changes for stakeholders.

The commission also reviewed the broader zoning rewrite timeline. Staff reported committee work has progressed through multiple articles (supplementary uses, special uses, definitions), and the commission discussed an open-house style public engagement on the proposed district map and major policy changes in July or August, prior to any final commission vote to forward a compiled new code to council.

Commissioner Albert moved to set the proposed amendment for a public hearing at the May meeting; the motion carried unanimously.