End Of Discussion

December 23, 2005
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GRAND RAPIDS — An $85 million project proposed for the Monroe North Business District has seemingly been scuttled by the City Commission, as commissioners decided last week to end year-long negotiations with the developer.

"We know how to put complex deals together. We know how to work with developers," said Mayor George Heartwell.

"I'm satisfied that we've given this our best effort and I can't support this," added the mayor, who called for a motion to kill further discussion.

But Blue Bridge Ventures LLC, headed by CEO Jack Buchanan and doing business as Split Rock Development V LLC for the project, wasn't satisfied and felt the firm had been blindsided by the commission.

"We were shocked. We had a meeting yesterday and it was not at all an impasse, it wasn't even close. We were down to finalizing a couple of things," said Buchanan of a meeting his firm had with the city a day before the vote.

"(Assistant City Manager) Eric (DeLong) said he was going to give a report saying we were making progress, but that we were going to have to wait until the next meeting. That is how we left it," he added. "We had an agreement on price and it was just the structure we were trying to finalize."

Too many unanswered questions regarding the city's financial involvement, characterized by the city as being too risky, was the underlying reason why the city will no longer talk with Split Rock Development about the mixed-use development planned for the corner of Monroe Avenue and Newberry Street NW.

"What we have here is a proposal that doesn't protect the public interest, and I can't recommend it to you," said City Manager Kurt Kimball.

Split Rock Development asked the city to build a 480-space underground parking garage that would cost $20.6 million and sit beneath a 300,000-square-foot building. The city felt the facility's price tag was too high at $40,000 per space, and should have been priced closer to the $27,000 the city agreed to pay for the 149 spaces it proposed to buy in a development planned for

Fulton Street
and
Division Avenue

Split Rock said the development couldn't go forward without the underground garage and they couldn't afford to build it. The firm said the city would recoup its investment from taxes the project and its tenants would generate and from parking revenue it would get by operating the facility. The property targeted for the project contains the former Western American Mailers building, which is vacant, and a small parking lot to the east.

"The frustration is clear; they don't want us to develop," said Buchanan. "That's why we're surprised that they did this. We're looking at our options, but I can't develop without parking and they've pulled the legs out from under us on every way that we could go to try to make the parking work."

Buchanan added that talks had lowered the ramp's per-space cost to $21,000.

But DeLong told commissioners that he couldn't get Split Rock to document the costs. He also said questions went unanswered about the cost of the land and the ramp, and how much parking revenue the city could expect to receive.

"These questions add up to a significant risk," said DeLong, who served as the city's point man in the negotiations, but didn't offer any information on the costs. Earlier this month, DeLong told commissioners that progress had been made in the discussions and that they would receive a detailed account of that progress prior to last week's meeting.

Two commissioners, James Jendrasiak of the 1st Ward and Robert Dean of the 3rd Ward, said they thought they were going to get a report on the latest round of talks at last week's meeting, as was listed on the meeting's agenda. Both expressed surprise when they learned they were being asked to vote to end negotiations, and both voted against doing so.

"I thought we were going to have an update on the project," said Jendrasiak, "and we're going to have a vote?"

Media reports labeled 3rd Ward Commissioner James White as "the City Commission's leading champion for developer Jack Buchanan's" project, but White voted with four other commissioners to end the discussion. At the meeting that evening, commissioners defeated a resolution to build the parking garage by a 6-1 margin. Dean cast the lone dissenting vote.

White, Dean and Jendrasiak weathered criticism regarding campaign contributions from Buchanan and his associates, but Buchanan defended the practice and said questioning the character of the commissioners was unfair.

Buchanan said he has made campaign contributions to local and state candidates for a long time, before this project was even on the drawing board.

"There is nothing wrong with making campaign contributions and I like those guys," said Buchanan of White, Dean and Jendrasiak. "Those guys are the only ones that really give anybody else a fair shot of trying to do something in the city. The people I don't give campaign contributions to are the ones that are in bed with the cronies in town."    

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