Rockford Buys Milner Hotel

July 23, 2002
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GRAND RAPIDS — The plan to develop the Milner Hotel into a Howard Johnson’s is officially down and out, a condition that the century-old building may find itself in soon.

Local developer Chuck Calati, president of Calatico Inc., tried for the better part of four years to revive the seven-story structure at the corner of Oakes and Ionia SW into a modern, 100-room, franchise hotel.

But the plan fell through for various reasons. And now the Milner may fall down for one reason: The building is impeding development.

Last week, Rockford Development Co. entered into a buy-sell agreement for the Milner property with Owens-Ames-Kimball Co., the general contractor that took possession of the parcel after the hotel development failed.

“This is just a continuing effort of what we’ve been doing down there, and we have a vision of what we would like to see happen on Ionia as far as an entertainment area,” said Mike Maier, president of Rockford Development.

“We’re just trying to do whatever we can to clean up the area and to continue Cherry Street Landing and what’s going on to the north of it,” he added.

Maier said the deal should close within 90 days. Terms were not disclosed.

At a recent meeting of the Downtown Development Authority, Rockford Construction Co. CEO John Wheeler told board members that the Milner Hotel was hindering development of Cherry Street Landing — a $40 million project on Ionia and Commerce avenues between Cherry and Oakes streets.

“We’ve been trying real hard and we’ve got one major blockade in place, and that is the Milner Hotel property. It is so visible. It’s not an in-line building that we can jump around because it’s on the corner,” Wheeler said to board members.

“I can tell you very honestly that in the last two-and-a-half years we have probably lost 30 to 40 opportunities to lease space at 38 Oakes,” he said of the five-story building that is part of the Landing project.

“The building is in terrible condition. The building has four or five feet of standing water in the basement. Sewage water. It’s bad stuff,” he said of the Milner.

According to numbers provided by the DDA, the 100-by-125-foot parcel the hotel sits on could sell for up to $375,000, a sale price that was figured at $30 a square foot. But the land and the building are carrying a price tag near $700,000 from the attempt to renovate it.

The cost to raze the Milner and clear the property was estimated at $300,000.

Renovating the building also would be costly because the rooms are small. The walls are concrete and some are structural, so removing walls to enlarge rooms could bring the Milner tumbling down.

Wheeler told the DDA that because of the Milner’s condition and location he had two options for the Landing project. One was to stop developing that area. The other was to develop the project further by picking up an option he has on a city-owned parking lot on Ionia at Oakes, and then build a center with shops, restaurants and housing on it and on the Milner site across the street.

“We can’t hop, skip, and jump the development down Ionia Street,” he said “We have two national restaurant users for this corner.”

City approval is needed to raze the Milner and a new use for the property has to be in place before it can come down. The DDA may be interested in helping on the project.

Rockford and SIBSCO, the real estate firm owned by the Peter Secchia family, have been renovating buildings in Cherry Street Landing for about four years, and Wheeler neatly summed up the project’s current situation in just 10 words.

“We think we have one shot to finish Ionia Street.”          

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