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DDA Pledges Money To Big Projects
GRAND RAPIDS — Members of the Downtown Development Authority approved a new policy last week that provides financial assistance to developers of major projects, and then gave a major downtown condominium project $2 million in financial assistance.
The policy offers direct financial assistance for approved construction expenses, such as Americans with Disabilities Act requirements. It also offers reimbursements with interest for public improvements, such as streetscape work, for privately funded brick-and-mortar projects of $5 million or more.
“We’re already allowed to do this,” said DDA Executive Director Jay Fowler, of the state law — Public Act 197 of 1975 — that lets the agency offer construction assistance. “But we didn’t have guidelines.”
The guidelines state that a DDA reimbursement can’t exceed the estimated 10-year Tax Increment Financing capture generated by the project or the life of the Tax Increment Financing plan, whichever happens to be less. Nor can a reimbursement exceed the cost of the approved expenses being installed in the project.
In addition, a reimbursement can’t top 75 percent of the annual TIF capture generated by the project. TIF is the difference in the taxable value of a property before a project begins and after it is completed. The DDA gets $16.20 of every $1,000 of increase in the property tax of all completed projects within its boundaries.
Another guideline requires developers to provide the DDA with a project’s anticipated expenses and revenue to help the board determine the level of financial assistance. Also, a project must either create new jobs or new residences to qualify for assistance.
“These are for the public’s benefit and are also a benefit to developers,” said Fowler of the guidelines contained in the policy.
Immediately after approving the policy, the panel acted on it by awarding Bridgewater Condos LLC $2 million in financial assistance via reimbursement payments with an interest rate not to exceed 4.5 percent. The DDA will make those payments from TIF captures. The total amount is $200,000 more than the developer first requested last fall.
Board members assigned $1.3 million of that award to public improvements for barrier-free design planned for the building at 377 Bridge St. NW, and nearly $700,000 to public upgrades that Bridgewater Condos will make to Scribner Avenue.
The $71 million, 200-unit condo project is going up on the northeast corner of Bridge and Scribner, next to Bridgewater Place office tower.
“We’re ready to go. We’re 99 percent there,” said Robert Grooters, whose firm, Robert Grooters Development, is behind the condo project known as River House at Bridgewater Place.
Grooters told the DDA last week that the project’s financing is in place and that 107 of the 200 units have been pre-sold. He also told board members that River House would not be a LEED-certified project, which disappointed Mayor George Heartwell.
“The one going in at Fulton and Division will be LEED certified,” said the mayor of the Two West Fulton condo and retail project planned for the former City Centre parking ramp site.
“I would see that as a marketing plus and I would encourage that,” said Heartwell to Grooters.
The right lane of westbound Bridge Street will be closed during construction of River House, which could take up to two years to complete.