Massive Riverfront Project Afoot

February 17, 2006
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GRAND RAPIDS — For well over a year, an unknown developer has been quietly working with property owners and high-ranking city officials on an ambitious project to redevelop a massive tract of land along Market Avenue between U.S. 131 and Wealthy Street.

The planned development —  which is believed to include the 19-acre parcel of riverfront land the city began marketing last month — would absorb over 30 acres in one of the largest investments ever in downtown Grand Rapids.

Judging by options placed on neighboring properties, the project will border the Rapid Central Station on Grandville Avenue to the east, the Grand River to the west, the highway (with a ramp directly into the property at Cherry Street and Market) to the north, and Wealthy Avenue and Bartlett or Williams streets for an L-shaped southern boundary.

The largest concern, according to insiders, remains whether property owners can be convinced to sell. Deborah Shurlow, real estate adviser and retail specialist for Grubb & Ellis/Paramount, has been actively soliciting property owners for an unnamed outside interest. She declined to comment, stating that, "As rumors get out, it makes my job harder to do."

She said the project will likely go public within the month.

"The very fact that there is a single developer in that area already, and he has been looking for a year or more, I think bodes well for the future of that district," said Grand Rapids Mayor George Heartwell of the area just south of the Van Andel Arena.

Heartwell said he, City Manager Kurt Kimball and Deputy City Manager Eric DeLong have been working with the developer for over a year. Heartwell did not divulge specifics of the project, as he signed a confidentiality agreement last year, but did share details of the city's initial RFP for the 19 acres of city-owned land at 201 Market Ave. SW, commonly referred to as the Public Works Island.

"I think there is tremendous potential on both sides of the street," he said. "This will be the next hot real estate market."

He envisions mixed use, likely with high-rise residential along the river, incorporating retail and entertainment. He does not foresee any commercial office space, unless a large company opted to relocate its corporate headquarters there.

"It becomes a blank palette for people to have an urban mixed use. It won't be just low-rise buildings," said DeLong. "This is a strategic property we've thought about for a long time."

Susan Shannon, economic development director for the city, said any development will include public access to the river, with possibly a marina or kayak park. The winning proposal will also interact with the rest of downtown, she said, and incorporate its growing arts and entertainment district.

Shannon was not included in the initial discussions, and last week said she was not aware of any proposals. Like most of the city, she first became aware of intentions to market the property in December as one of a half-dozen city properties presented by 3rd Ward Commissioner James White as targets for economic development.

It is unclear whether White had any knowledge of the Shurlow development. He did not return calls made to his office. White, Shannon and DeLong sit on a committee that recently met with the Michigan Economic Develop Corp. to discuss marketing the parcel.

One individual who was aware of the efforts is Eric Wynsma of Terra Firma Development. Shortly after acquiring roughly $1.5 million worth of property at 206, 207, 212 and 220 Grandville Ave. SW, he was approached by Shurlow to sell the property.

Wynsma agreed to an option at market rate, but is actively pursuing redevelopment of the 150,000-square-foot property as a mixed-use complex. He hopes to capitalize on the growing residential density of the downtown area, and eventually contribute to it. An early tenant already fits that model: Downtown Self Storage.

"It's very big and elaborate," said Wynsma, who is also under a confidentiality agreement. "I don't really know if it'll happen or not, and I can't say anything more because I'll get sued … But my understanding is that most of the properties in the neighborhood are under option."

Joel Langlois, president of Delta Properties and owner of the Intersection Lounge at 133 Grandville Ave. SW, said that he has been approached with a dozen offers, but has not signed an option.

"Real estate is an interesting animal," he mused. "The value and use can change overnight depending on what your neighbor does."

Dan Ronda of Ronda Tire at 130 Market Ave. SW indicated that the company had signed an option, but was not sure if it would sell.

"It sounds like they need to get all the options in place," he said. "If they can't get all the options in place — if there are three or four people who won't sell — who knows?"

Dave Custer, president and owner of Custer Office Environments at 217 Grandville Ave. SW, said he was excited about the new development in the neighborhood, but at this time has no intention of selling.

"We're a unique situation," he said. "We've put a lot of money into this, more so than anyone else here.  Secondly, this is where we want to be. Where else downtown can we find office, showroom and warehouse space all in the same facility?"

With a value of more than $3.2 million, Custer's multi-unit facility, with large tenants including contract manufacturer The Tech Group, will be a difficult piece for Shurlow to attain.

At 234 Market Ave. SW, another holdout could potentially derail the entire project. Mark London, proprietor of Sensations nightclub near Centerpointe Mall, is in the midst of renovating the former Sennett Steel building into an adult entertainment complex.

"I'd sure rather not have Mark London's project there," Heartwell said. "It's not the kind of thing people want to live near, or the kind people want to work near or have their recreation."

The mayor admitted that London's Sensations has no detrimental impact on its surrounding neighborhood, but felt this would be a different story.

"His other club is fairly isolated on the perimeter. … This is a tight, walking neighborhood — a similar club is bound to have an adverse affect," Heartwell said. "The only thing I could imagine that would be positive would be if someone bought him out and he just wasn't there."

London was approached by Shurlow last year, and he turned her down.

"They indicated it was something huge," said London, who is not bound by a confidentiality agreement. "I didn't question it, but they were talking 10,000 jobs. … I wracked my brain, and I can't imagine anything that would even approach that."

London was convinced it was a casino or an amusement park, especially since he was offered help to relocate his project nearby. "They just didn't want me right across the street."

With his project quietly nearing completion, he turned down that offer, as well. But upon hearing of the city's possible involvement, London indicated he was open to compromise.

"I will not hold up the city from developing whatever they want to develop," he said. "I'm hearing this is a property of national significance. … If it's going to help the city for me to not go into business or to buy me out shortly after we're in business — we're talking two to three years from now, anyway — I'm certainly not going to hold the property hostage."

Next door at 235 Grandville Ave. SW and 248 Williams St. SW, Moch International is in the early stages of a nearly 200-unit apartment complex.

"We haven't been approached (for an option)," said Joe Moch Jr. "But we see this as a fantastic project and couldn't see getting out of it. It will be very interesting to see what will be proposed for the rest of the area."

Jim Decker of Taatjes & Tol, listed agent for the former Valley Retreading Service at 330 Market Ave. SW, referred questions to Shurlow.

Currently, the city has issued an initial request seeking interest, qualifications and financial capability concerning its parcel. A detailed RFP will be issued to respondents this spring. The property is being appraised, while administrators are investigating the cost involved in relocating the city services currently headquartered there, including the Parks and Recreation Department, the Streets and Sanitation Department and the Computer Center.

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