It has been known for many years that dense urbanism creates more economic prosperity and wealth. The thinking was more people -> more ideas -> more businesses -> more employees -> more shoppers -> more people -> etc.
A recent study in London demonstrates concretely that a mode diverse social network correlates to greater wealth for an area. See SciAm: Diverse Personal Networks Linked to Strong Local Economy
What this tells me is that if a city wants to innovate, prosper, and thrive then it needs to encourage in-fill development and dense downtowns.
Carmel, IN is doing this. A suburb. Instead of building an industrial park or designating a "green zone"; it built trails, multi-use buildings and condominiums in the core, and replaced traffic lights with roundabouts.
If a suburb in Indiana can make these changes then surely Traverse City can.
See Urbanophile: Next American Suburb: Carmel, Indiana