County Buys Riverfront Property

February 27, 2004
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GRAND RAPIDS — Kent County Commissioner Dick Bulkowski said he was skeptical at first about the county buying 1.28 acres of riverfront property on Monroe Avenue, as real estate agents told him the three parcels were overpriced.

But after he learned more about the transaction from Commissioner Fritz Wahlfield, who chairs the county’s building task force, Bulkowski said he changed his mind and saw the purchase as a good investment for the county.

So did the rest of the commission last week, as board members unanimously agreed to spend up to $2.45 million on the property, which is located in the city’s SmartZone and is just north of the intersection of Monroe Avenue and Michigan Street.

“I think this is the right thing to do and I think it’s visionary,” said Roger Morgan, vice chairman of the commission.

The seller is listed as Frank Freund, an executive vice president, treasurer and CFO for American Physical Capital Inc. of East Lansing. The sale price is $2.35 million, but closing costs and commissions are likely to bring the county’s total cost closer to $2.425 million.

The county will now issue an eight-year bond package to purchase the Monroe property and the building at 82 Ionia NW.

Kent has been leasing 72,000 square feet in that building since 1998 and plans to exercise its option to buy the structure from SIBSCO LLC in March 2005. The building is expected to cost the county $5.3 million. The Peter Secchia family owns SIBSCO.

Kent County Administrator and Controller Daryl Delabbio said Fiscal Service Director Robert White would likely have the debt instrument before commissioners in about 60 days.

Some saw the riverfront property as ideal for a commercial development. Years ago, a medical office building was proposed for the site, but nothing of consequence was ever suggested for the land after that project faded — even while it was listed. Still, at least one development company had started to look at it.

Blue Bridge Ventures LLC recently thought about building on the site, about two blocks north of the new convention center. But the firm never considered putting up a hotel that would cater to the convention business there.

“We did not look at it for a hotel,” said Blue Bridge CEO Jack Buchanan, while adding that Calder Plaza, across Monroe Avenue from DeVos Place, is the only good location for a new downtown hotel.

Instead, Buchanan said his company looked at the site for a mixed-use project, residential with some retail and entertainment. But when he started making inquiries about the property, Buchanan learned that the county had just made an offer on it.

“We were beaten to the punch by the county and at a number that was far more than what we thought the property was worth,” he said.

“We do have an interest in that property, it just wouldn’t be for a hotel,” he added. “It is a pretty significant development that we’re interested in putting there, if their acquisition of it doesn’t go through.”

The county has the land under contract through March 25 and a clause in the agreement gives Kent 90 days to cancel the deal after closing on it. The closing will take place after a baseline environmental assessment on the land is done.

The county hasn’t announced a specific use for the property, which is large enough to accommodate a new administration building. Kent may turn the site into a surface parking lot for the interim, as a county-owned lot sits across Monroe Avenue from the parcels.

“We’re not sure what the highest and best use of that property is. But it’s been up for sale for a long time,” said David Morren, commission chairman.

“There are some things we are looking at,” said Delabbio without identifying potential uses other than parking.

Kent said it plans to stay in its current Calder Plaza building for at least eight more years.

As for trying to locate a hotel on Calder Plaza, Buchanan said the Gallium Group, an investment partnership between Blue Bridge and Hines Interests LP, hasn’t thrown in the towel, yet — even after being rebuffed at least once by the county and twice by city officials.

“We haven’t dropped the hotel idea,” said Buchanan. “We’ve been approached by some other national chains who have an interest in partnering-up on it and we’ve carried on with those conversations. So we’re looking at what our different options are at trying to satisfy all of the competing interests.”           

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