London Deal Falls Through

March 24, 2006
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GRAND RAPIDS — Signifying that the downtown riverfront “mystery development” has either fallen apart or will tolerate nearby adult entertainment, the undisclosed developer has allowed an option on Grand Rapids businessman Mark London’s planned Showgirls Galleria at 234 Market Ave. SW to expire.

The $3.2 million full-nude strip club and retail store will now open on May 1.

London signed a 15-day sale agreement on his roughly two-acre property on March 8 after weeks of negotiations with local real estate broker Grubb & Ellis/Paramount, which is representing the development interest.

Weeks shy of his grand opening, London attached stiff terms to the option, including a $100,000 nonrefundable deposit and an increase of $20,000 on the sale price for each day until the sale closed. Had the developer closed on last Thursday’s deadline, the sale price would have been $300,000 higher — assumed to be the price of the ongoing construction.

With no closing date set early last week, London was concerned that a last-minute closing request could put him into default. He sent a letter to Grubb & Ellis designating a close for Thursday at the Transnation Title Insurance branch at

921 N. Division Ave.
No representative of the developer showed, but London was contacted that afternoon.

“They said that maybe something could be done if they had more time, but did not specifically ask for more time,” he said. “And that wouldn’t have been a possibility — we had been pretty clear from the start that this was D-day.”

The night before, London had been all but certain that the sale would not close. Even after seeing a media report to the contrary on WOOD TV-8’s newscast, London still had no answer from Grubb & Ellis. He spoke with Paramount principal Bill Bowling as late as

An hour before the scheduled meeting, London received a fax from the realtor and the developer’s Atlanta counsel, Powell Goldstein LLP, requesting he sign a confidentiality agreement. London has publicly stated for months that he would sign no such agreement, and this was the first occasion in which he had been formally requested to do so. The sale agreement had no stipulation to do so.

“They were pulling anything out of their hat they could in that last hour,” London said. “They were doing anything they could, they just couldn’t get the buyer to the table.”

London does not believe the affidavit played any part in the decision. No representative of the developer told him that the deal would close if he signed the agreement.

He also said that there are no ongoing negotiations, and he has no intention of selling before his club’s opening.

“Granted, if the buyer rolled up with an armored truck full of cash, I would sell if there were enough money in that truck,” he said.

He added that the sale price would be “millions” higher than the believed original price of $3 million to $4 million.

“If they can’t close on my deal, I can’t see how they’d be able to put together something worth a billion dollars,” London said.

London’s Florida retirement will have to wait another few months, he said, but he would still have the opportunity to open the adult entertainment complex he feels will be a regional attraction in its own right. He plans to renew efforts to transfer a liquor license to the property, at which time he will forego full nudity, as the state’s liquor regulations require.

He also now has an additional $100,000 to battle a proposed adult entertainment ordinance proposed by city officials, which he suggested may have been influenced by the development efforts.

“All the offers have coincided with actions by the city,” London noted. “But one of my arguments in selling the property was to help out the city. If in fact there was a developer out there with thousands of jobs, I wasn’t going to stand in the way of it.”

While London is rolling ahead, a neighbor of his is now in an even worse situation.

Eric Wynsma of Terra Firma Development could be facing a tough decision this week. He is the only landowner to delay efforts as a result of the mystery development, ceasing his development plans for his $3.5 million property at 206, 207, 212 and

220 Grandville Ave. SW.
He reached a verbal agreement with Grubb & Ellis real estate agent Deborah Shurlow months ago, but despite his best efforts, has not received a deposit or binding contract.

He has since received an offer to sell two of the four buildings for another use. If neither deal comes through, he still has a concept to develop the property, but has had to keep his Plan B on hold until he knows the mystery development’s status.

“My own speculation is that they just got sick of dealing with London,” Wynsma said. “They can live without his property, his use can coexist with theirs, just like they can live without mine and they can live without Custer’s,” referring to Custer Office Environments, another property the developer hasn’t been able to secure.    

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