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Petoskey ends option on 106 East Mitchell; two RFP bidders urged to negotiate directly with owner
Summary
After reviewing two proposals for 106 East Mitchell, Petoskey City Council directed staff to terminate the city's option to purchase the historic property and encouraged prospective buyers to work directly with the owner.
Petoskey City Council on Feb. 3 signaled it will not exercise the city’s option to purchase 106 East Mitchell and directed staff to terminate the option so private bidders may negotiate directly with the owner.
City staff had executed a 90‑day option to hold the property while soliciting proposals intended to preserve the building’s historic character. The option runs approximately through early March; City Manager Shane Horne said staff could ask the owner for an extension but recommended allowing prospective buyers to proceed with direct negotiations.
The city received two responses to the Dec. 17 RFP. Restore269 (represented in the meeting by Cody, an architect) proposed rehabilitating the main house, converting the space above the garage into two workforce apartments and relocating the bidders’ family to Petoskey. Restore269’s initial purchase price in the proposal was $300,000; Cody said he later indicated he could increase an offer to $500,000 and estimated roughly $1.2 million of private investment into the property’s restoration. Cody said Restore269 intends to pursue state historic tax credits and to keep the primary house as a family residence with workforce rental units above the garage.
A second submittal from James Group I LLC (representative name reported in the RFP materials) offered to purchase for $698,000 and proposed a larger mixed use concept that could include workforce housing, event space and additional structures; Council and staff noted that some of those concepts could face zoning or right‑of‑way constraints and that the state Department of Transportation controls a nearby bridge mentioned by that bidder.
Council discussion emphasized favoring a private partner willing to protect the building’s historic character. Councilmembers expressed concern about the city investing funds to acquire the property and instead encouraged the bidders to negotiate with the owner. City staff said the option could be closed early and that the owner and realtor would be informed so private negotiations can proceed; staff also said they would assist with permit and zoning review if a buyer advanced a proposal.
Public comment mirrored those points. Diana Guinee (address provided) asked whether terminating the option would allow local developers to contact the owner; city staff confirmed that an active option limited direct contact but terminating it would free the owner to negotiate directly.
Council’s direction to staff was recorded in the meeting as a directive to terminate the city’s option agreement and allow private negotiations. No formal purchase by the city occurred at the Feb. 3 meeting; staff said they will follow up with the owner and realtor.
