Rooks Moves In The Ren Zone
Jonathan Rooks, owner of Parkland Properties of West Michigan LLC, is the new owner of the People’s Building, having purchased the 14-story structure from the Renucci Family Trust last month. Rooks plans to convert the People’s, an office building at the northeast corner of Monroe Center and Ionia Avenue, into four commercial condominiums and 26 residential condos.
Earlier this year, Rooks bought Monroe Terrace, the old Ammerman building on North Monroe Avenue at Trowbridge Street. A previous owner renovated that former industrial building into commercial and residential space, but didn’t sell it out. Rooks took over and sold the 11 remaining vacant condos and the first-floor retail space in just two months.
His marketing proposal had him doing that in two years.
So how did Rooks knock 22 months off his game plan? By lowering the price tag on the condos and by pushing the financial benefits that the Renaissance Zone offers, especially the rewards the nearly tax-free area has for residents. And his tactic is to use the same technique that filled Monroe Terrace at the People’s, as both buildings are in the zone.
“I came up with a way to promote the Renaissance Zone that was more personalized to each individual’s situation by developing a worksheet. People could give me their income, their tax bracket and their proposed purchase price of their condo, depending on which one they were interested in,” said Rooks.
With that information, his worksheet spelled out monthly mortgage costs for potential tenants with annual incomes ranging from $50,000 to $750,000 after the federal mortgage deduction, the zone’s elimination of property tax payments, the state income tax and the city income tax were deducted.
For instance, an $180,000, 30-year mortgage would cost someone with $50,000 in annual income $279 a month for the zone’s duration. If someone takes home $150,000 a year the numbers get even better. For the same home mortgage, this individual would pay only $227 a month over that period because the personal tax deductions and a waiver of the property tax are worth more than the interest expense on the mortgage.
“That saves almost $8,000 a year in city and state income taxes. Add to that $4,000 in property taxes and you’re almost to $12,000 per year. They can take $1,000 off a mortgage payment, and now a $1,200 a month mortgage payment turns into a $200 a month mortgage payment,” said Rooks.
“By demonstrating that to the customers, I turned a situation of showing a condo 20 times and selling it once into showing it twice and selling it once,” he said of his sales effort at Monroe Terrace. “I sold out in two months instead of two years.”
For the People’s Building, the zone runs until 2018 or for 15 years, which is three times the average length of time that Michigan residents own a home. But Rooks doesn’t see the tax benefits of the zone as the reason someone buys into his building. Rather he sees the breaks as the deal-clincher for those who are already interested in living downtown.
Rooks plans to market the People’s to a wide array of customers, from the 24-year-old entry-level buyer to the successfully retired empty nester. The condos will range from 850 square feet to 2,700 square feet. All will have 12-foot-high ceilings and large windows. Some will have balconies. Prices will start at $160,000 and might reach $600,000 for a half-floor penthouse with a private rooftop garden.
Four architects have submitted designs for the condos. Rooks said he likes all four and hopes to have one selected within a few weeks. Once he chooses a design, renovation work should take from nine months to a year.
“I would have made a decision by now, but all four are great designs. So I’ve been talking to potential prospects and customers to try to help get to the point where I can make the decision,” he said.
But Rooks also needs some help from the city for him to go ahead with the residential units. He hopes that commissioners will soon approve a plan to set aside 100 spaces in the new Monroe Center ramp for downtown residents. The ramp should open later this month and city commissioners have to ratify the plan before it opens because of federal tax rules on municipal buildings. Planning commissioners gave the concept a green light last month.
“It’s a one-of-a-kind place,” said Rooks of the People’s Building. “There will probably never again be a condominium project where you can walk in amongst 35-foot-tall, 4-foot-diameter, granite pillars in the lobby and see an inlaid ceiling 35 feet in the air.”
Select Bank and Citadel Broadcasting are the commercial tenants. Select is moving from Bridgewater Place into the lower levels at the People’s, space that was originally designed for a bank back in 1916. Citadel has the third and fourth floors. Cornerstone Architects drew up the plans for the commercial condominiums.
Rooks started in residential real estate at 15 when the Grand Rapids native bought a share of a house at McReynolds and 7th Street NW. He and his partners fixed it up, sold it, and a few years later Rooks was in the business of providing second homes along the serene West Michigan shoreline to city dwellers wanting to get away from hectic metro areas.
“That led to a career of specializing in waterfront development on lakes and rivers connected to Lake Michigan within an hour of Grand Rapids,” he said.
Rooks has built condos, home sites, marinas and boat-storage facilities. Many are located on White Lake near Montague and in Grand Haven, and most are multi-use projects.
So how does a devoted waterfront developer, who drives a speedboat, wash ashore in the zone to do urban housing?
“I’ve always lived the inverted lifestyle of my customer,” he said. “They came to my projects on the weekends, and on the weekends I’d usually come to the city.”