Restaurant Theater In Gilmore Plan

February 22, 2005
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GRAND RAPIDS — The city's Community Development Committee Tuesday discussed the prospect of selling a piece of an existing city surface lot to pave the way for construction of a mixed-use development that would be connected to The BOB.

Developer Greg Gilmore, representing a newly formed company known as 20 Monroe Building Co. LP, is requesting an option agreement on one-third of the westerly portion of the city's surface parking lot at 26 Monroe Ave.

The property is adjacent to The BOB, which is owned by the Gilmore Group.

Gilmore's vision is for a 20,000-square-foot entertainment complex with a 1,200- to 1,400-seat performance theater, family style restaurant and, potentially, a "boutique" hotel of 200 rooms or less on the building's upper floors. He expects to invest at least $3 million toward the project.

"The main goal here is the theater," Gilmore said. "The hotel is still under study."

He's seeking an exclusive, three-year option agreement that would reserve his right to secure the property, which would be combined with existing BOB property to accommodate the project.

Under terms of the agreement discussed last week, Gilmore would get a one-year option on the property and the right to renew it for two successive years. Cost of the option would be adjusted upward over that period of time, from $10,000 the first year to $20,000 the second year and $50,000 the third year.

The option price would be credited toward purchase price of the property if Gilmore closes on the deal.

According to the agreement, if the transaction were to close by Jan. 1, 2006, the sale price would be $498,818, or $43.91 per square foot for the 11,360-square-foot piece of property. The sale price would be $513,813 ($45.23/sq. ft.) if closed by Jan. 1, 2007, and would be $529,262 ($46.59/sq. ft.) if closed by the last day of the option period.

The agreement also calls for the development to be "substantially completed" within three years of closing.

Economic Development Director Susan Shannon said Gilmore wants a three-year option agreement because it would give his company the time necessary to conduct due diligence, undertake site and environmental evaluations, pursue engineering and architectural design work, work through the zoning process, secure financing and line up tenants or partners for the development.

Deputy City Manager Eric DeLong said city staff has been working hand-in-hand with Gilmore for more than 18 months on the proposed development and that the staff is fully confident of Gilmore's ability to pull the project off.

The project would require slight adjustments to Ferry Street right of ways, and Gilmore has agreed to pay "some reasonable costs" associated with doing what's necessary to make the project possible.

Gilmore said there's a potential for some new parking underneath the building but that it would be limited.

Parking Services Director Pam Ritsema said the city would lose an estimated 25 metered spaces in the lot, each of which generates $6,700 in annual revenue. The city would continue to operate the lot for the duration of the option period.

After construction is completed, another seven meters could be installed along an easement that would run between 50 Monroe Place and The BOB, according to the parking department.

Shannon indicated that the loss of the metered spaces could be easily absorbed by several ramps located within a block of the project site.

"This is a good economic project for the city to support," Shannon said. She said the economic development team believes the proposed development would become a downtown destination point that would enhance the vitality of the core city.    

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