City OKs Alticor Hotel Tax Break

July 2, 2004
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GRAND RAPIDS — Why can’t Alticor Inc. integrate the Israels building into the design of its new hotel?

After all, said Jennifer Metz, Alticor’s predecessor (the Amway Corp.) did exactly that when it put up the luxurious glass tower around the former Pantlind Hotel that opened in 1913 and incorporated both buildings into the plush Amway Grand Plaza Hotel.

Well, Metz, a board member with the Kent County Council for Historic Preservation and the Michigan Historic Preservation Network, a past chair of the city’s Historic Preservation Commission, and a leading figure in the local preservation movement, just may get her wish.

At a public hearing last week, when city commissioners granted brownfield status for the site of Alticor’s planned hotel, Bert Crandell said they hadn’t decided the fate of the four-story Israels building yet and wouldn’t until the architectural drawings were done, which likely won’t be until December. So, the design could include the Israels building.

“We’ve deferred a decision on the building until they can bring an architect in to design the site plan,” said Crandell of HP3 LLC, the company Alticor formed for the hotel project.

The structure is pegged to go up on the downtown corner of Pearl and Campau NW, a site with two parking lots and Israels Designs for Living. Alticor owns the lots and bought an option on Israels last fall. The sophisticated furniture and design firm is getting ready to move to a building it owns on Broadway NW.

Crandell told commissioners the hotel would have from 300 to 400 rooms, a 1,500-square-foot ballroom, at least one restaurant and one lounge, and parking for 500 cars. He said the project would cost from $60 million to $70 million, create 250 jobs, and pay about $650,000 in lodging excise taxes each year.

If Israels has to come down for the hotel to go up, Alticor will have to go before the city Historic Preservation Commission (HPC) and explain why the building should be razed. But because Israels isn’t in an historic district, the HPC can only recommend whether it should stand or fall. The final say on that matter will rest with the City Commission.

Metz felt Israels has some historical significance.

“It was built in 1899 for a shoe company. Then it was a warehouse and had other uses until it became Israels,” said Metz of the business that opened at 226 Pearl St. NW in 1977.

“It is historically significant,” she said.

But, in her view, the building isn’t as significant as City Hall — a 35-year-old structure that Gallium Group LLC wanted to raze for a 400-room hotel on Calder Plaza. Metz was part of a contingent that urged the city to reject the Gallium proposal and leave City Hall standing on Calder Plaza. She wasn’t certain, however, whether preservationists will fight the razing of the Israels building if the hotel design calls for it to come tumbling down.

“I know that would be hard for most people to understand because the city and county buildings are so unpopular.”

Metz said City Hall, the county building, and the sculpture combine to make the plaza nationally important, while Israels has a local importance. Skidmore, Owings and Merrill, an internationally known architectural firm, designed the public buildings. The name Alexander Calder speaks for itself.

“I’m not saying I want the Israels building to come down in any way, but I just feel it’s the lesser of two evils,” she said. “What I really wish is that we had better protection for historic buildings in Grand Rapids.”

If the Michigan Economic Development Corp. (MEDC) awards a brownfield to Alticor on July 13, the date the HP3 LLC application is expected to be reviewed, the firm will get a Single Business Tax Credit for up to 10 percent of the hotel’s cost. Crandell placed the SBT figure at $5.9 million.

The city and its Brownfield Redevelopment Authority feel the Alticor site, including the Israels building, qualifies for the designation and tax credits. But the state has new approval standards that better reflect the “Cool Cities” program initiated by Gov. Jennifer Granholm.

Whether the project will get a brownfield will depend on how well it supports downtown redevelopment, how well it re-uses existing facilities, how well it preserves and creates jobs, and how well Alticor demonstrates a “critical need” for the tax credits and can prove that “the project would not happen” without it.

According to the state, the city also has a criterion to meet. It has to make a “reasonable contribution to the project through local funding sources including tax-increment financing and property-tax abatements.”

The city wasn’t willing to make either of those available to Gallium for its hotel. During that debate some commissioners vowed not to spend a public penny on a new hotel, period.

Israels Designs for Living has to be out of its stately building by late October; about the time that Alticor should have a better idea of what its new first-class hotel will look like.

“Why can’t they incorporate the Israels building into their design?” asked Metz. “I think both (City Hall and Israels) should stay up.”    

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