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Welcome To Hotel City
In the first half of the 1990s, Grandville was home to three hotels. Now the city, situated in the southwest corner of Kent County, has six, and the three newest hotels give Grandville its highest taxable values of all of them.
The annual values for each of the six range from $320,000 to $2.77 million and for all six the taxable value is just short of $8.27 million. With a rate of 7.199 mills, the half dozen are worth about $60,000 in property tax revenue this year for a city with a population of 16,263.
Ten years ago the total property tax value of the three was around $2.5 million, or $5.8 million less than today, and the city had 15,264 residents then. So, clearly, the hospitality business in Grandville has grown at a much faster clip than its population.
But don’t confuse the hotels’ taxable value with the assessed value of those properties, as the two are different. Because of Proposal A, Grandville can only use the former to figure its tax-revenue base, and the taxable value is set at 50 percent of a structure’s true cash value in its first year of operation.
“Then after that, the assessed value, as figured by the assessor, may increase year-to-year, but the taxable value is capped by the state. We can’t raise it more than the rate of inflation after Proposal A. So as time goes by, a gap grows between the assessed value and the taxable value,” explained Ken Krombeen, Grandville city manager.
Krombeen added that the city has to use the taxable value until a property is sold. After a sale the taxable value is uncapped and a new one is created. So he estimated that the current taxable value of the six hotels and motels in Grandville is slightly less than half of the actual value of those structures.
The Best Western Grandvillage Inn, the Grandmark Lodging and the Lands Inn are the three that have done business in Grandville the longest. The Comfort Suites, the Holiday Inn Express and the Residence Inn by Marriott have opened for business there in the last few years and have added nearly $6 million to the taxable-value roll.
As for what caused all the hospitality growth in Grandville, the reasons seem to pretty much run the gamut. An increase in the region’s population, low vacancy rates at existing properties, more attractions and events in the area and a solid local economy during the 1990s are all good reasons, but not the whole picture.
“It may have been the local development in Grandville with the mall and restaurants in town,” said Krombeen of the RiverTown Crossings Mall, a $160 million project done by General Growth Properties that fueled tens of millions of dollars in other developments since it opened three years ago.
Another explanation may be found by looking at the B2B side. With all the construction that went on in the city the past half-dozen years and the new businesses that opened during that time, rooms were needed for out-of-town workers, as were places for executives and employees to meet for strategy and training sessions. So the hotels likely added business traffic to its usual tourist trade.
But whatever the exact reasons for all the extraordinary growth, the Hotel Grandville may still not be overbooked — at least not if the developers of the former Herman Miller Pavilion have their way.
Early in the project known as the Grandville Marketplace, JDN Realty Corp. of Atlanta identified a couple of parcels on the south side of their property at I-196 and 44th Street as future sites for hotels.
“I don’t know if they are continuing to work on that. But I do know that there were a number of hotel chains that were mentioned as possible. Certainly there are additional chains that aren’t represented in the southwest Grand Rapids and Grandville market,” said Krombeen.
“We haven’t heard anything yet, but I guess I wouldn’t say that we’re probably saturated because I know that there are a couple of sites that are being looked at.”