Land Transfer In The Works

June 30, 2006
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GRAND RAPIDSGrand Rapids city officials will take their first step next week to bring some property currently located in Wyoming into the city. A public hearing on the land transfer is set for July 11.

The deal, which is allowed under state law, would reallocate the jurisdiction of a small triangular parcel of the 200 acres that Steelcase Inc. intends to sell to Ashley Capital, shifting it from Wyoming to Grand Rapids. Most of the land already resides in Grand Rapids. The shift would give the city complete control over the property's zoning for the next 50 years.

Under the agreement, the two cities would share property and income tax revenues, and Wyoming would be held harmless from decisions made by Grand Rapids

Deputy City Manager Eric DeLong called the potential transfer a "powerful example" of two cities coming together to promote economic growth.

Steelcase signed a letter-of-intent to sell the property that borders its headquarters on

44th Street SE
to Ashley Capital earlier this year. The New York real estate firm has developed a reputation for redeveloping industrial sites.

Ashley Capital renovated a former General Motors plant of over 1 million square feet in DeltaTownship into a distribution center for Ryder Integrated Logistics. The company also turned the old Detroit Race Course into a new corporate and retail center.

What Ashley Capital has planned for the Steelcase site isn't clear yet, and the property transaction isn't expected to close until late this year.

"They are working on their conceptual design for the project, which is a mixed-use development," said DeLong.

"We don't know how many jobs or how much investment yet, but it will be a super project," he added.

Hanging over the deal, however, is a tax issue. City Treasurer Al Mooney said last month that Steelcase owes Grand Rapids $127,391 in abated taxes from an exemption the company received five years ago, but which it has failed to follow through on. At the heart of the matter is the Leap chair plant, as equipment purchased for the factory was granted the tax abatement.

The plant is situated on the land Steelcase intends to sell to Ashley Capital, and the firm will move production from the site if the sale is completed. Doing that would violate the exemption certificate Steelcase sought and accepted, and would likely mean that the office furniture maker would be responsible for the taxes it didn't have to pay the past five years.

But city officials haven't decided yet whether they will require Steelcase to repay those taxes. First Ward Commissioner James Jendrasiak, though, is convinced the city should go after those dollars. He said Steelcase can afford to make that payment, especially since the company announced it recorded a net profit of $18 million during the first quarter of this year.

Another city commissioner said the matter should be set aside for another day and kept separate from the proposed land transfer with Wyoming

"The tax issue is another thing that can come to our table," said 2nd Ward Commissioner Rick Tormala.

Wyoming has scheduled a public hearing on the land transfer for July 18.    

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