An award-winning developer is getting ready to renovate two downtown buildings and members of the Grand Rapids Downtown Development Authority helped his project along by granting him a tax break on Wednesday.

“This project is going to do a great deal of good for South Division when it’s completed,” said DDA Chairwoman Kayem Dunn.

Karl Chew, CEO of Brookstone Capital, wants to historically redevelop the buildings at 209-217 South Division and 17 Williams St. SW into 42 one- and-two bedrooms apartments with live-work units on the ground floors. The units would be affordable housing, but without a rent subsidy, and the total investment would be $11 million.

The DDA granted the project a payment-in-lieu-of-taxes, or PILOT, which means that Brookstone will pay a percentage of the project’s total rental income instead of property taxes. The buildings would come off the tax roll for 18 years. In the past, the PILOT percentage has been 4 percent. City commissioners also have to approve the payment.

“The Commission believes this is a great project and would support the PILOT,” said Mayor George Heartwell, also a DDA board member.

Brookstone has also applied to the Michigan State Housing Development Authority for funding and Chew said he would know if his application has been approved on March 1.

“It’s a very competitive process that a lot of cities are competing for. If we don’t get it there is another round (of funding) in the fall,” said Chew.

Brookstone is also looking to capture brownfield tax credits, low income housing tax credits and federal and state historic tax credits.

“Our focus is on securing the funds to redevelop the buildings,” he added.

The University of Michigan and the Urban Land Institute honored Chew in October at their annual real estate forum for his restoration of 101 S. Division. They gave Brookstone their development-of-the-year award for a project that was done on the west side of the state. The DDA and the city awarded 101 South Division, the former Watson & Heald Building, a PILOT in 2007 and the project was completed last fall.