Buchanan Hopes Resilience Pays Off
After all, the CEO of Blue Bridge Ventures, which has partnered with Hines Interests LP of Houston to form Gallium, first thought of building a hotel on Calder Plaza back in 1994 — probably before some of your children were born.
The award went Monday to DeVos Place, but nobody could fail to note that Gallium not only had persistence but resilience.
At least three times during 2003, public officials — once Kent County and twice the city of Grand Rapids — publicly told Buchanan to go away.
And each time those officials told him that his plan didn’t work, he bounced back with even more self-assurance to say that it did work.
His resilience, by the way, surfaced long before the three encounters last year.
The former mayor of Grand Rapids, John Logie, accused Buchanan nearly four years ago of trying to bribe city officials when he made a $21 million offer for City Hall, Calder Plaza and the Government Center parking ramp.
Buchanan said $11 million of that bid was for the properties and $10 million was for the city’s moving expenses.
Logie, a real estate attorney by trade, said Buchanan’s offer was twice what the property was worth.
With that accusation in mind, Buchanan made an $11 million bid for the same parcel last June and added that he would build the city a new City Hall designed by noted architect Richard Keating.
But this time, the city told him his offer wasn’t high enough because it would cost the city $67 million over 30 years.
Logie then tried to cut short the one-year option Gallium had to buy the property. His attempt failed, though, when city commissioners voted down his motion.
Just weeks before that June meeting with the city, the county told Buchanan his proposal would cost Kent $27 million over three decades, and administrators felt they could stay in the current building on Calder Plaza for up to 20 years. But Buchanan said he hadn’t made the county an offer when Kent rejected his proposal.
In October, city commissioners gave Buchanan 90 minutes to explain his plan.
He had the backing of local economist Marvin DeVries, who testified that that the deal wouldn’t cost the city any additional funds.
Buchanan also brought in structural engineers who detailed the costs of keeping the current City Hall, plus experts on the Americans With Disabilities Act who pointed out the building’s non-compliance areas.
A month later, the city countered that entering into an agreement with Gallium would cost it nearly $80 million over 30 years — up $13 million from its June representation even though the parking ramp wasn’t on the table on that occasion.
According to the Gallium proposal, the city would spend $52.3 million over 30 years for a new headquarters and parking ramp.
In return, the city would receive $47.5 million over that period from income, tax revenue, and savings from being in a new building. The developer would then give the city $4.8 million in cash for the current City Hall to bring the transaction total to $52.3 million, the amount the city would pay out.
Buchanan and Gallium have said they’ve spent close to $2 million on the project in less than two years and they plan to go forward with their proposal this year.
The 400-room hotel, targeted for Calder Plaza across Monroe Avenue from the new convention center, would cost roughly $60 million to build.
Buchanan admits being frustrated with the reactions he has gotten from the county and city to his plan, perhaps even more so with the response he got from the city in November.
“That was the third set of numbers that they’ve come up with on the same proposal and nothing has changed. They just keep changing their numbers,” said Buchanan.
But one number hasn’t changed.
The Business Journal again has recognized Buchanan and Gallium as a Newsmaker of the Year finalist for the second straight year. Resilience, after all, shouldn’t be its own reward.