- change ups
'Island' Letters Get So-So Review
But members of the 201 Market Steering Committee weren't all that impressed with the Moch project. Nor were they even a tiny bit awed by the plans that came from the Grand Rapids Development Corp. and Barnes-Stevens Redevelopment.
The city put the nine-member committee together to review the letters and make a recommendation to the city commission about the sale of the Public Works Island, which carries a $35 million price tag. Only five of the nine members attended the review session.
The three structures, which total 212,775 square feet, offer theaters, galleries and studio space for all forms of the visual arts. The center cost $94.5 million to build. Public money accounted for nearly $91 million of the total, which came from a "quality of life sales tax" that voters approved in 1998.
Moch International has proposed much of the same for the
So the largest of the four theaters in the project would have from 2,200 to 2,500 seats.
"We had really been only thinking about doing a smaller, 400-seat place, and thought that 2,500 seats would be ridiculous. But then we started talking to some people, and it certainly sounds like the potential is there," said Joseph A. Moch, who owns the firm with Joseph W. Moch, his father.
"It's been amazing what has happened in the last five years. Five years from now, there is absolutely going to be the demand. I think if we don't do it now, when we look back, we will probably regret not having done it," said Moch.
The other model for the Moch development is the North Market, which operates in a renovated farm-implements warehouse on
"The urban market is something that we're really excited about. I think it gets a little overlooked because of the other stuff that we're proposing," said Moch of the $3 million market that is part of the project.
"That has been down there for 130 years. It's amazing to think that in
But committee member Samuel Ojo, president of architectural firm SKO & Associates Inc., didn't see the center or the market as exciting. He said a riverfront project should be more like
"Those are fun places, but I don't see that in this proposal. Maybe I'm thinking too big of a city," said Ojo. "I think you want something vibrant. As long as it's got water, you should be able to sell it."
Mike De Vries, of Ed De Vries Development, thought $150 million for a performing and visual arts center was exorbitant. He said that amount was equal to what it cost to build Van Andel Arena and the new art museum that is going up on
"What amount of revenue would they need to support that investment?" De Vries asked. "Maybe they have some users in mind. That would be important to know."
Downtown Development Authority Chairwoman Kayem Dunn said the plan's emphasis on entertainment and culture fit other downtown efforts. But she also said that some of the proposed uses for the center duplicate those already being done at the art museum and the Urban Institute for Contemporary Arts, and those offerings aren't being overused.
"Is that the best use of this land?" asked Dunn, executive director of the Foundation for Interior Design Education Research.
The Moch development also would include a hotel, a parking ramp, a watersports activity center, restaurants, and an apartment complex that Ojo didn't think would be successful.
GR Development Corp.
Committee members made the fewest remarks about the "River Grand" development because much of it still remains a mystery. What they do know is contained in the letter that
"The River Grand vision is consistent with the objectives and policies of the City of Grand Rapids 2002 Master Plan," wrote Faust. "Total investment is approximately $1.5 billion to $2.5 billion dollars creating 3,000 to 10,000 new jobs."
Of the three letters, counsel Dick Wendt said the one from GR Development Corp. was the only one that contained confidential information he couldn't share with the committee. But Wendt did reveal that the actual developer isn't Faust.
He said it's someone who lives in the metro
Wendt said this mystery developer sent a personal financial statement and three letters of reference that are to remain confidential. He also said the committee would recognize some of the local members of the River Grand team, whose identities were also withheld, and he mentioned that some of them have previous experience with mixed-use projects.
"I don't see what they're envisioning," said Ojo.
The River Grand plan seemed vague to Ojo and the other committee members because the letter didn't explain what the developer wants to build on the city property. The public correspondence only listed, and in the most general terms, the mixed-use nature of the 36-acre development.
"If it's a $2.5 billion project, he needs to delineate what goes on the property," said De Vries.
And Ojo expressed some skepticism about the developer: that a first-timer would be able to deliver on such an expensive project.
"A developer who qualifies may not see a project through," he said. "We're talking about a lot of money. I'm a little disappointed and I need more information."
Gregory Stevens, a partner in the firm, said the entire 750,000-sqaure-foot development would be built around a town-square-style pedestrian plaza and include a new riverwalk that would stretch for eight miles.
"We will develop the riverwalk for pedestrians, handicapped, bicycle and marine access through our complex. We will develop a small marina giving boaters a destination and providing public excursions and catered river cruises," wrote Stevens.
"This development is designed to be a complete live, work, play environment," he added.
Despite the riverfront uses included in the development, it was the project's office space and hotel that drew comments from the committee.
In his letter, Stevens said local real estate experts told him that a lack of new Class A downtown office space had driven some companies to the suburbs. And to fill a void in the market, he wrote that Barnes-Stevens was ready to include from 200,000 to 300,000 square feet of modern office space in its project.
"I don't see a huge demand for 300,000 square feet of office space in
"We have enough hotels," added Ojo.
Committee member Lisa Haynes, though, wasn't so quick to write off a hotel that Barnes-Stevens and Moch International included in their respective letters.
"I don't know what model of hotel we need to get conventions here, but we do need something to complement what we have," said Haynes, who directs downtown building operations for
But a key point of the Barnes-Stevens development, which would cost from $150 million to $300 million to build, is that Stevens said the firm has the money to buy the property.
"We have very strong financial backing and can close quickly," wrote Stevens.
"Our primary funding source, CERF, has $300 million in available funds for the acquisition and management of environmentally challenged properties (and has) verbally approved a loan to finance our purchase of this property."
CERF is the Continental Environmental Redevelopment Fund, a Buffalo-based coalition of banks that makes loans to companies to redevelop contaminated properties. Reportedly, the Bank of America is part of the lending coalition.
"On the face of it, CERF has substantial revenue," said De Vries.
A letter from CERF Vice President Craig Carbrey, which Barnes-Stevens included in its mailing to the city, confirms the firm would get the $35 million to buy the property, if the loan committee agrees to the transaction.
Stevens provided evidence that his company has done waterfront reclamation projects in the past, mostly of the single-use variety.
"Barnes-Stevens has done waterfront (projects), but not of this scope," said Deputy City Manager Eric DeLong, who moderated the committee review.
But Dunn said Barnes-Stevens, like the other developers, wasn't given enough time to present a specific project for the site that was based on a market study of what downtown needed. Even with that restricted timeline, Dunn said the firm still did a good job.
DeLong said the property will qualify as a brownfield, meaning that whoever buys it will get some public assistance to develop it, and he told committee members that the next step was up to them.
"You could decide not to accept any letters of interest, or accept one, two or all three of them," said DeLong.
But City Economic Development Director Susan Shannon tried to direct the committee's attention to an important fact before the review process began.
"We're not looking at what is proposed, but if the developer can follow through on the project," said
Footing The Bill
The sale price for downtown property usually runs from $50 to $55 per square foot, but the cost to develop that land can run at least four times the purchase price. Here is a comparison of the square-foot development cost from the three firms that expressed an interest in purchasing the city-owned Public Works Island, 15.8 acres of land on the market for $35 million.
Minimum Investment Maximum Investment
Company Investment Per Sq.Ft. Investment Per Sq. Ft.
Moch International $150 million $217.95 $250 million $363.25
Redevelopment $150 million $217.95 $300 million $435.88
Corporation $1.5 billion $956.53 $2.5 billion $1,594.22
Note: The investments from Moch International and Barnes-Stevens Redevelopment are for the 15.8 acres of city-owned property, while the GR Development Corp. investment is for 36 acres that include the city-owned land. There are 688,248 square feet in 15.8 acres and 1,568,160 square feet in 36 acres.