City View Condos Have Sold Fast
GRAND RAPIDS — Only three are left. When Jonathan Rooks bought the People's Building at 60 Monroe Center last year and announced he would build 26 condominiums on the structure's top seven floors, he said he made a good investment.
And that must be the case because, since August, Rooks has sold 23 condos, mostly to owners from outside the downtown area.
Rooks credits his sales success to the design of the condos, which offers owners a great view and much privacy, and to city officials for a number of things — including locating his project within the nearly tax-exempt downtown Renaissance Zone.
"We have the right mix of benefits: light and spacious rooms, high ceilings, wood floors, lots of huge windows with views of downtown life, location and convenient parking," said Rooks, owner of Parkland Properties, a residential and commercial real estate development firm.
"Add on the tax-free status owners will enjoy until 2018, and it is really a no-brainer for people who want to live in the heart of the city," he added.
Perhaps a bit of Rooks' humility underlines that statement.
Buying those units, now known as City View Condominiums, may well be a no-brainer. But it does take a certain amount of brainpower to market that point successfully, and Rooks has done that job as well as anyone could have.
For each potential buyer Rooks personalized the benefits that come with living in the Ren Zone. He combined their annual income and tax bracket with the purchase price of their condo, then deducted the tax savings to arrive at a monthly mortgage rate.
Doing this showed a number of prospective owners that their payments would be lower than if they rented.
"Interestingly, I found that most of my prospects didn't really understand there are actually three forms of tax savings under Renaissance Zone regulations," said Rooks.
"In addition to zero property taxes, owners also realize savings from the waiver of Michigan income taxes and city income taxes. For most buyers, the income tax savings resulted in the most benefit," he said.
Last August, Rooks showed the Business Journal that some buyers could save as much as $12,000 a year in taxes by moving into his building. Still, Rooks seems genuinely grateful for the help he has received from the city.
In addition to the Ren Zone status city commissioners awarded his property, the Downtown Development Authority gave his firm a $50,000 grant to help with the renovation of the residential floors.
Normally the DDA doesn't add awards to projects in the zone, but board members felt that the long-term payoff of having homeowners downtown was worth more than the grant.
"With all things considered, this makes good sense for us right now," said Verne Barry, DDA chairman, last summer.
It seems Barry was right.
As strictly an office building, the People's paid $35,000 worth of property taxes in 2002.
Rooks said that in 2015, when the full Ren Zone exemption runs out and a quarter of those taxes are due, the largely residential building will be worth about $60,000 in property taxes. In 2016, that tax bill rises to $120,000, then to $180,000 in 2017, and to roughly $240,000 in 2018.
But while the Ren Zone status and DDA grant were huge for Rooks, he would be the first to admit that another factor plays a vital role in being able to sell downtown living. And that is parking.
When the city approved a plan put together by Economic Development Director Susan Shannon, DDA Executive Director Jay Fowler and Parking Services Director Pam Ritsema, that role was filled. The plan sets aside spaces in the new Monroe Center ramp exclusively for downtown dwellers and gives them 24-hour access.
"No bank would finance a project for downtown homes without a long-term guarantee of parking, and it certainly wouldn't be attractive to buyers," said Rooks, who encouraged city officials to create such a program.
Condo owners aren't the only residents of the People's Building enjoying tax savings. The structure's commercial tenants, Citadel Broadcasting and Harvey Kruse Law Offices, are free from the Single Business Tax and the personal property levy.
Another commercial business, Select Bank, is close to exercising its option to buy several floors of the building.
Rooks said he has about 3,000 square feet of office space left to lease or sell, along with the trio of condos, before the People's is completely filled.
Parkland owns another downtown property at 600 Monroe Ave. NW.
Known as Monroe Terrace, its Ren Zone condos sold out within three months last year.