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Mercantile Moving To Brownfield Site
WYOMING — Mercantile Bank of West Michigan is using the brownfield redevelopment program to return an old property at 310 Leonard St. NW to productive use — as the company's new headquarters.
Brownfield designation for the site was approved locally last month, and approved by the Michigan Economic Growth Authority (MEGA) board Tuesday, said Rick Chapla, vice president of redevelopment for The Right Place Inc.
"The driving force for the site's brownfield designation was Mercantile's redevelopment initiative," Chapla said. "It happened as a direct result of Mercantile's investment and redevelopment interest in that site."
The company intends to re-establish its headquarters in the downtown Grand Rapids area, moving administrative offices from Wyoming into a new 60,000-square-foot, four-story building to be constructed on the 2.75-acre site at Leonard Street near U.S. 131.
Plans call for demolishing a single story office building on the south side of Leonard between Scribner and Front avenues. The structure's previous occupant, which relocated earlier this year, was a branch of Adecco Employment Services
Mercantile intends to invest $10.3 million in preparing the site, making infrastructure improvements and building the bank's new main office, which will include a branch banking center.
According to COO Robert Kaminski, a building the bank currently leases at 216 N. Division Ave. downtown will cease to be a Mercantile branch upon completion of the new office in the first quarter of 2005.
Demolition of the old structure on Leonard should get underway by the end of this month, he said. Once demolition is complete and the site is prepped, work on the new building will begin.
Kaminski said about 50 employees will relocate to the new headquarters, the bulk of them from the current North Division location and Wyoming administrative offices
The Wyoming administrative offices, opened in October 2001, will then be used for another bank department, he said.
Under the brownfield redevelopment program, the state allows qualified businesses to claim a credit against the Single Business Tax.
For a brownfield, the SBT credit is based on the percentage of investment in the project, said Susan McCormick, spokesperson for the Michigan Economic Development Corp.
MEGA, which is administered through the MEDC, makes the determination on the SBT credit.
"It's based on 10 percent of the investment and not to exceed 10 percent. In this case it's $1.03 million," she said. "Once the project is completed they apply for 'eligibility of completion' through the MEDC. It's at that time that we apply the credit. The work has to be done before the tax credit is awarded."
Through the city's brownfield development authority, the city of Grand Rapids will capture more than $1.8 million in local property taxes, which will be applied directly to rehabilitation and preparation of the site for the new building, she said.
She said the tax increment financing timeline varies per project because it extends to the end of the project's work plan.
Over time, Mercantile's Leonard Street project is expected to create up to 100 new jobs.
"The way we're growing and the capacity of that building will allow us to add 100 new jobs," Kaminski said. "It's a fairly large building so it will house a lot of people."