DDA To Help Rockford Buy Milner

August 19, 2002
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GRAND RAPIDS — Rockford Construction Co. will get some help from the Downtown Development Authority to rebuild on the Milner Hotel site, if the firm picks up its option on the property.

The Belmont-based general contractor and developer also is looking for public support to raze the nearly century-old hotel at Oakes and Ionia SW. The seven-story structure, which has been vacant for much of the past 20 years, has historical status and is protected by law.

The DDA, however, agreed last week to explore an option that would assist Rockford in buying the building from Owens-Ames-Kimball Co., a local construction firm that won the property in a foreclosure suit from a developer who tried for years to turn the Milner into a franchise hotel.

Rockford Construction signed an option with O-A-K for the property last month.

DDA Executive Director Jim Knack offered a plan that would have the board contribute one dollar for every two dollars that Rockford Construction lowers an expected $700,000 asking price for the building and its 12,500-square-foot parcel.

For instance, the DDA would give Rockford $50,000 if the firm could seal the deal for $600,000 — which would reduce the sale price for Rockford to $550,000.

Knack told board members that they should put a limit on how much they spend on the incentive to get the property developed. He suggested no more than $100,000, and the DDA told him to work out the details and bring a proposal back to the next meeting.

“This is by no means a done project. You’re on the front end of it,” said Knack.

“This is not going ahead unless we get involved,” added Mayor John Logie.

The Milner property is valued at $375,000, a figure based on $30 per square foot, and the cost to raze the building has been estimated at $300,000.

If the purchase price remains at $700,000, Rockford Construction would have to spend $1 million just to buy the property and clear it. The site would be included in a larger project the company has planned for the Area 3 parking lot on Ionia between Weston and Oakes.

SIBSCO, the Peter Secchia family-owned real estate company, has a five-year option on the lot from a property trade the firm did with the DDA almost three years ago. SIBSCO is willing to make the site available to Rockford Construction and Design Plus for a block-long development that would feature restaurants, entertainment and loft apartments.

Besides the expense involved in acquiring the land for the project, Rockford Construction COO Kurt Hassberger told the DDA that his firm was facing other hurdles with the project. He said Rockford Construction needs approval from the city, state and federal governments to demolish the Milner.

To accomplish that goal, Hassberger said the firm needs support from the public sector. Logie told him he needed to provide evidence that renovating the Milner was too costly a project to do, a claim that Rockford Construction has already made.

“We just don’t feel that rehabilitating the Milner Hotel is economically feasible,” said Hassberger. “We are a long way off here, as Jim said. But we can’t do anything, we feel, without the DDA’s participation. So we appreciate that and we’ll give this our very best shot.

“We’re not looking for any handouts here. We’re just looking for a way to make some economic sense to get that building out of there.”

The proposed development for Ionia is part of the firm’s Cherry Street Landing project, a four-year-old renovation effort that has already done $27 million worth of projects on Ionia and Commerce avenues between Cherry and Oakes streets.

“We are under construction with the rehabilitation of the Huizen Furniture property. We are also taking bids to re-do the parking lot at the corner of Cherry and Commerce,” said Hassberger. “So as all of those things are happening, the entire streetscape for about half of a block is being rehabilitated.”           

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