NORTHPORT — Rocked by an announcement that its hospital is closing, and plagued by serious and chronic problems with private septic systems within its borders, this tiny village near the tip of the Leelanau peninsula is facing challenges that few would expect of a community surrounded by so much natural beauty. Its downtown is steadily declining and its famously sparkling bay is enduring ever-higher pollution levels.

Northport’s list of competitive advantages is one that most communities would envy. It has sky-high lakefront property values, a stable population of both working class and well-off residents, and strong interest in preserving the mix of high-end restaurants, art galleries, and community services like a gas station, hardware store, and grocery store in the downtown. Yet businesses of all sorts have closed here; three years ago, this town even lost its chamber of commerce.

In fact, many residents and outside observers agree that the village’s challenges appear to be every bit as daunting — and pressing — as those of many other small towns in the region that, unlike Northport, are not graced with pricey lakeshore property or cursed with failing septic systems. The 2000 U.S. Census noted that most cities and villages in northwest Lower Michigan are losing population or remaining stagnant, while growth in surrounding townships is exploding.

The problem is so severe throughout Michigan that last August the Michigan Land Use Leadership Council, Governor Jennifer M. Granholm’s bi-partisan commission that studied the state’s galloping sprawl phenomenon, recommended steps that would help small towns regain their vitality. Governor Granholm employs some of those recommendations in her Cool Cities Pilot Project. And, earlier this week, a group of lawmakers proposed legislation that would define and establish “commerce centers,” a key technique, according to the leadership council, for saving downtowns and slowing sprawl.

The sprawl indicators are not good in Northport. In the past 60 years, the village’s population increased by only 42 people; yet surrounding Leelanau Township added 445 people in just the past decade. This has some Northport residents and businesspeople saying that their town needs to do more than fix its sewage problem. They say it must figure out how to attract new downtown growth and development to counter the sprawl that, if unchecked, will eventually drain its vitality into the countryside.

Darren Hawley, who owns Stubb’s Sweetwater Grill in Northport, thinks such development is crucial. “As a business owner,” he said, “I want to see the economy of the village expand. I think it’s necessary.”

Big-City Problem in a Small-Town Bay
Northport’s sewer problem has been growing for a long time. Its traditional “town center” design, which puts small residential lots in close quarters with commercial businesses, leaves few options for property owners when their aging septic systems fail. A recent survey found that only 35 percent of septic systems in the village and surrounding township have county health department permits. The remaining systems are either failing or predate the county’s permitting process.

Last summer, officials found significant water quality problems at the village beach and in Northport Creek; evidence points primarily to failing private septic systems. Village Administrative Coordinator Greg King knows that the problem is urgent. “We’ve got a restaurant with raw sewage in their back yard, and I’ve got three neighbors complaining to me,” he said. “We need to do something.”

A special wastewater treatment committee appointed by the village and neighboring Leelanau Township recently commissioned an $18,000 “needs assessment” study by a Grand Rapids engineering firm. The study, which village officials presented at the end of April to a public forum that attracted approximately 150 people, said that the village should build a municipal sewer and wastewater treatment system as soon as possible.

Mike Stifler, a Michigan Department of Environmental Quality official, told the forum that, while the state is unlikely to force a solution on Northport at this time, future state action is a distinct possibility.

“We’re not in a position to mandate a system,” Mr. Stiffler said at the forum, according to The Leelenau Enterprise. “But if there are continual documented health concerns, it can be done. You’d be much better off pursuing a system now than having us come in five to ten years down the road.”

Biggest Blow Yet
But some other news that reached the village in recent weeks is even more troubling. Last month the village’s largest employer and community anchor, the Leelanau Memorial Health Center, announced that it is closing because it has been operating at a loss for several years. The closing will deal a major blow to the village’s struggling downtown economy; worries about its effects are spreading beyond the village limits.

“In my opinion, it is not in the best interest of the township to see the village become a ghost town,” Leelanau Township Supervisor Jim Neve said. “There are a lot of things township residents need from the village — the school, the Community Arts Center, and the restaurants. Northport is a community gathering center.”

But several downtown restaurants have already closed and the area’s small school district, which has its building located within the village, is struggling to remain open. A year ago the Northport district proposed an arrangement with the nearby, much larger Traverse City school system for a merger of sorts: Traverse City would take over the Northport school and, in exchange, receive all of that small district’s per-student state funding. But the state squelched the proposed arrangement.

The school system’s only other option is to somehow increase its enrollment and, with it, its per-student state funding total. But attracting more families with children to the district is difficult, observers say, because of Northport’s high property values and a lack of available housing for people of more modest means.

At least one Northport resident, Bill Collins, is working to promote an affordable housing project within the village, which he would like to see located on a largely vacant 63-acre site here. Collins wants to launch a nonprofit organization that would buy the land and utilize a community land trust to retain ownership and keep the new housing — which would include independent living, multi-family, and single family units — within the price range of most middle class people. But he agrees that before there can be any residential — or business — expansion, Northport must solve its sewer problem.

“From my standpoint, I see Northport’s needs as a three-legged stool,” Mr. Collins said. “We need affordable housing, a sewer system, and enlarged marina for tourist traffic. We need all three to pull Northport up by its bootstraps.”

On Shaky Ground
But at least two of those legs rest on shaky ground. Some observers say that there are Northport residents who strongly oppose any expansion of the village, even though it would grow the tax base, boost downtown businesses, and allow more people who work here to live here as well.

There’s also a lively debate shaping up about just how large the new wastewater treatment system should be — either just big enough to meet the village’s present and future needs, or significantly larger so that it can provide service to the surrounding township, particularly along the township’s Lake Michigan coastline.

“Right now a joint system [between the township and the village] is the only one” being discussed, according to Phil vonVoigtlander, who retired to Northport three years ago, purchased a house downtown and then renovated it. “The township is selling it as if they are helping the village.”

But while a larger, shared system would somewhat reduce its price tag to individual users, currently estimated to be about $10,000 per household, it would come at another and, some say, higher cost. “The problem with a regional sewer system is that it will promote more sprawl outside the village,” Mr. vonVoigtlander said.

Meanwhile, according to Mr. King, the village administrator, Northport is working to change its zoning ordinances to allow higher density development within its borders. He said he favors a sewer system that reaches into the township and does not seem worried that it would cause more sprawl.

“It makes sense to bring them in,” he said of the township’s potential participation in treating wastewater. “This township government has most township residents convinced that it’s in their interest to keep a strong village.”

But it is unclear whether that means the township is also committed to the compact development that’s most efficient for sewer system construction and most effective for preserving the stunning vistas that make the countryside around Northport among the state’s prettiest.

Veteran planner Jim Lively directs the Michigan Land Use Institute’s Leelanau Smart Growth Coalition project. Reach him at jim@mlui.org.