- change ups
GRAND RAPIDS — If a multiplex opens downtown, the odds are pretty good that former mayor John Logie will be the first to buy tickets to the initial screening.
When Logie left office, after leading the city’s involvement in the revival of downtown for a dozen years, he said the sector needed three businesses to complete its recovery: a bookstore, a grocery store and a movie theater.
The Grand Central Market and River Bank Books & Music opened on Monroe Center in December. And with the Downtown Development Authority hearing a proposal last week from a southeast Michigan firm that wants to build a new downtown cinema, Logie still might collect on his trifecta.
Farmington Hills-based KG Development told board members that it wants to buy the Area 4 parking lot for a movie theater with up to 14 screens that would also offer 12,500 square feet of separate retail space and a few levels of parking above the theater.
The DDA owns the lot — located on Oakes Street SW, just south of Van Andel Arena — and the board told Executive Director Jay Fowler and legal counsel Dick Wendt to enter into sales negotiations with KG Development, which is a joint venture between Gershenson Realty and Investment and Kirco Development of Troy.
“It’s perfectly located,” said Richard Gershenson, a principal with Gershenson Realty, which has opened 90 shopping centers in 13 states.
“We certainly want to throw our hat into the ring,” he added.
A companion project might be a mixed-use development that would be built just east of the theater on the Area 5 parking lot. That development would offer 55,000 square feet of retail on the ground floor and residential units on the second story.
The two projects would be connected by bridges spanning the northbound U.S. 131 exit ramp that separates the two parking lots.
The city owns the Area 5 lot and is likely to put it up for bid next month. The DDA isn’t required to open the Area 4 lot to bids, but board members must approve the use for the site and get market value from the sale before the lot can be sold. Fowler said Area 4 has an estimated value of $3 million.
The entire lot is about 2.8 acres, but part of it runs under the U.S. 131 highway and may not be easily developed. If that is the case, then the project would go upon about 2 acres or 87,120 square feet.
KG Development has enlisted Rockford Construction, Fishbeck, Thompson, Carr & Huber and Commerce Realty to help with the project. Rockford Co. COO Kurt Hassberger told the Business Journal last week that they would place a bid on the Area 5 lot.
Gershenson said the DDA and Commerce Realty interested his group in considering downtown as a market for the theater. He also said he was impressed with all the residential construction that is underway and with the number of college students that use downtown’s entertainment district.
Fowler and Wendt are expected to return to the DDA next month with a term sheet on the sale and an update on their negotiations.
“We did receive an offer from the developer for this property,” said Fowler. “I think the spin-off from this for other businesses would be tremendous.”
The city would pay for the parking spaces above the theater, should the deal close. The theater would then lease spaces from the city for its patrons, who would have their parking fee validated by the theater.
But Parking Services Director Pam Ritsema said she didn’t want to see the Area 5 lot sold before the new ramp at Cherry Street and Commerce Avenue SE opens next spring. Her department is also losing the Area 3 lot on Ionia Avenue SW, just east of the arena, and the former City Centre parking ramp site to two of the many condominium projects planned for downtown.
“We’re willing to entertain different types of proposals, but we want to own the public parking,” said Ritsema of the Area 5 lot.
Gershenson didn’t identify a theater operator, nor did he present an estimate of the investment that would go into the project because that figure is still undetermined.
But Gershenson did say that his development wasn’t a “mystery” project.
“As things get firmer and more concrete,” he said, “we will offer more information.”