The Beat Just Goes On At RGDC
GRAND RAPIDS — Even as manufacturing suffers through a long downturn, the Robert Grooters Development Co. (RGDC) keeps producing industrial sites.
The area’s largest developer of industrial properties hasn’t missed a beat the past few years and has continued to add manufacturing and warehousing space in the region.
The most recent developments being offered by RGDC are a four-building complex near the airport and the new M-6 highway in the southeast corner of the county and an expansion of Union Station just south of downtown.
RGDC purchased the former site of the now-bankrupt Consolidated Freight Co. That buy gave the company another 10 acres behind Union Station, which is situated along U.S. 131 at the Hall Street exit.
Pete Colvin of RGDC told the Business Journal that the firm will build another 250,000 square feet there and the new facility will look just like the original Union Station.
“The footings are in and the steel is going up right now,” he said. “It will be ready in September.”
The second station will also be in the city’s Renaissance Zone, just like the first one, and that means almost all state and local taxes will be exempted for five more years and partially excused for another three.
Among the levies being erased or discounted over that period are personal property and Single Business taxes.
But RGDC went a step further and requested a tax-abatement overlay district for Union Station from the city, which complied with the firm’s request.
This means that a tenant there can ask the city for a 50 percent abatement on its personal property and real property levies when the Ren Zone runs out.
“That gives us some good recruiting power. If a company doesn’t have a tax abatement at this time, they need to call us at Grooters,” said Colvin.
“We have a couple of big users that we’re working with right now to make sure they fit in the building. But it’s still wide open and available,” he added about Union Station. “It divides really well into 40,000, 50,000 square feet and up.”
RGDC is also developing the Cascade Aero Center, roughly 650,000 square feet of space over four buildings at 5101 Kraft Ave. SE.
One building with 165,000 square feet is finished and open. It has a unique look to it, hardly the typical industrial structure that dominates the market. David Boorink, a graphic artist with Arts & Letters, designed the buildings.
“He did a concept drawing for us to get something a little more innovative. We pulled it out for a company that was looking to go there and they loved it. So we built it exactly like that,” said Colvin.
Erwin Quarder, a German firm, is the tenant that liked Boorink’s design.
Three more similar buildings are planned for the 50-acre Aero Center site that RGDC bought from the DeVos and Van Andel families.
Colvin said his firm was getting ready to put up a 40,000-square-footer next to the existing center and that it would take about four months to finish it.
A 127,000-square-foot building in a wooded setting will follow and 325,000 square feet will be the size of the fourth and final industrial building on the site. RGDC also has a tax-abatement overlay district for the Aero Center.
So why is RGDC continuing to build when the manufacturing economy is so tough and about nine million square feet of industrial space is available to lease and buy in the region?
Colvin said it was a combination of business factors that range from having the right properties for clients, to customizing a deal that meets a company’s needs, getting various types of tax breaks for tenants and financing the purchase of a building.
“We can help offset their moving costs, and we can usually sell or take their old building in on trade,” he said. “We’re doing that a lot and it’s really working out well.”
Then Colvin named the internal Grooters factors. These include offering tenants value-added services, like assisting them with price discounts on racks, hi-los, material-handling products and telecommunications equipment.
At RGDC, the group that handles that task is known as the firm’s SWAT team, which is made up of vendors that work closely with the industrial and office builder.
Another Grooters factor is the networking functions the company promotes and holds. Colvin said the firm encourages its tenants to network and provide support for each other. Grooters does this through a series of breakfast meetings and other gatherings.
“We’ve had at least a dozen nice contracts as a result of introducing one company to another and getting the purchasing agents to work together,” said Colvin.
“So we’ve built an incredibly strong business system that is really priceless.”