Planning commission recommends ordinance allowing residential and limited hotel use below average grade downtown

The Petoskey Planning Commission voted to recommend a zoning ordinance amendment to the City Council that would clarify code language about lower‑level spaces and permit certain residential and hotel uses below average grade in the downtown central business district.

The change substitutes the phrase "below average grade" for the existing term "below grade" or "lower level" in the downtown use table and would list hotel rooms below average grade as allowable by special‑condition use (SCU) after commission and public hearing review. The commission moved the recommendation after a public hearing and a staff overview.

Staff member Dan (staff) told the commission the draft ordinance would bring existing downtown uses into clearer compliance with the zoning code, and would explicitly allow, with conditions, residential uses in spaces below the average grade of a building. Dan said the amendment also responds to a request from the Downtown Management Board to add hotels to the lower‑level column as a special‑condition use. Amy Tweeden, executive director of the Downtown Management Board, submitted an email supporting the change and asking that hotels be added; Dan said the request had been incorporated.

Architect Mike Petal of Shoreline Architecture spoke during public comment in support, describing projects that have converted lower levels to worker housing elsewhere and urging the commission not to assume safety concerns are unaddressed. "The Michigan building code addresses the life safety concerns ... the building code does define that," Petal said, noting egress, daylight and fire‑suppression requirements addressed by the code and giving a Charlevoix conversion as an example.

Commission members discussed the technical definition of "average grade" — the average between the highest and lowest points of grade on a building — and used downtown examples including McLean and Aiken (streets cited by staff) to illustrate how some established first‑floor/lower‑level relationships would be classified under the clarified language. Commissioners urged replacing ambiguous wording such as "lower level" with the code‑defined "below average grade" and adding a specific SCU entry for hotels in the table for the Central Business District.

After discussion the commission voted unanimously to forward the amended zoning language to the City Council with a recommendation. Roll call was recorded as: Denver — yes; Reid — yes; Kronberg — yes; Moss — yes; Newman — yes; Robson — yes; Wilmot — yes.

Why it matters: the change codifies how lower‑level commercial or residential spaces are treated downtown and creates a pathway (special‑condition review) for hotels and residential uses below average grade to be considered, balancing existing downtown building patterns against safety and compatibility review requirements.