Riverfront: Fit To Be Tried
GRAND RAPIDS — Exercising an option has taken on a whole new meaning for Blue Bridge Ventures LLC, as the commercial real estate adviser recently bought the Riverfront Building, the former home of the once successful Riverfront Fitness Center.
Blue Bridge CEO Jack Buchanan said the firm purchased the mortgage on the 60,000-square-foot, two-story structure at 975 Ottawa Ave. NW from Republic Bank and also assumed some of the former owner’s liabilities. The deal, he said, closed last month.
Nearly 30 percent of the building is leased to Spectrum Health. The region’s largest health care system signed a 10-year lease, with options, to keep its occupational health center at the site. Spectrum has 17,380 square feet on the structure’s lower level.
Blue Bridge plans to turn the rest of the first floor and the second level into a fitness center. Buchanan said the firm, which also develops properties, would lease that space to an experienced health-club operator instead of trying to develop the business itself. Two operators are putting together proposals to lease the space and operate the center.
The transaction was attractive for Blue Bridge on a number of fronts. One was that the Riverfront Fitness Center had 1,400 members when it closed its doors less than three years ago. Blue Bridge Partner Michael Sytsma said the fitness center was profitable, but went dark because the firm that owned it had financial problems from other holdings. According to county records, Cascade Management Group was the previous owner of the building.
Another reason behind Blue Bridge’s decision to buy was the growth the North Monroe Business District has experienced since the fitness center closed. With more businesses and more employees in the district — the same one that Blue Bridge is located in — the firm is pretty sure that membership at a new club can top the roll of the old one.
“Not knowing who exactly the operator will be, we don’t know exactly what all the plans are. But our plan is to have a very nice club that is consistent with downtown and the North Monroe area,” said Buchanan.
“We think there is a need for a club here,” he added.
Sytsma said when they’ve visited the building, people have stopped them and asked if they were reopening the fitness center.
“These are people who were there before. They are familiar with the facility and the convenience of the location, and they want that again,” he said.
Another reason for the purchase is the infrastructure for a fitness facility is already in place. The courts, pool, weight room, exercise areas and locker rooms are in good condition. Finally, the building itself is physically fit — meaning renovation costs are manageable with the biggest expense likely to be fixing the roof.
“It’s premature to figure out what the numbers exactly are because from a planning standpoint that has to be determined,” said Sytsma.
“Where the money is needed is in finishing it (more) than what the style is going to be. But, structurally, it’s not a gut and redo — it’s in great shape,” said Buchanan.
Buchanan said he couldn’t identify either operator bidding to run the fitness center due to contractual agreements, but he added that one currently owns fitness centers in the area. He said he hopes to be able to name who will run the club by late winter. By then, he will know what the center will look like.
“It depends on which way we go and who leases the space,” said Buchanan. “From what we’ve seen right now, it’s definitely going to be a club.”