Time To Ramp It Up
GRAND RAPIDS — Even with one new downtown parking structure on the books now, the city could be adding up to three more shortly.
The deadline date for proposals to develop the city-owned Area 5 lot on Ionia Avenue SW between Oakes and Cherry streets. The 68,992-square-foot lot sits just south of Van Andel Arena and carries a price tag of $4 million.
Parking Services Director Pam Ritsema said she had received unsolicited inquiries about the lot from developers before city commissioners agreed to put it up for sale in May. She also noted that surface parking wasn’t the best use for the site in an area that is emerging as an entertainment sector.
The RFP the city issued months ago obliges the buyer to meet all parking requirements for whatever development goes on the site and also provide at least 460 public parking spaces. Either the developer or the city could build those spaces, according to the RFP.
City Economic Development Director Susan Shannon told the Business Journal that she hadn’t received a reply to the RFP as of last week. But that isn’t unusual because responses normally don’t arrive until the deadline last Friday.
Talks are continuing between KG Development of Farmington Hills and the Downtown Development Authority over the potential sale of the Area 4 lot, which is immediately west of the Area 5 lot. KG Development, a joint venture between two southeast Michigan real estate firms, has said it wants to build up to a 14-screen movie theater and about 12,500 square feet of retail space on the DDA-owned property.
“We’re working on it, but we’re not ready to do anything on it. We really don’t have a deal yet. There is a lot of technical stuff that we’re working on. Our deadline was October and that is looming large here now,” said DDA Executive Director Jay Fowler.
“We are hoping to bring something to the DDA by October.”
The lot is 121,968 square feet. But Fowler said the DDA would retain the property under the U.S. 131 overpass, leaving 87,000 square feet for the project. KG Development offered the DDA $3 million for the parcel in April and signed an exclusive negotiation agreement with the board that is good through Oct. 2.
“I think it will be an anchor to bring people downtown, over and over again,” said Fowler of the movie house. “I think they like the visibility of the site. The visibility to arena patrons is certainly one thing, but the fact that it’s right off 131 is probably more important.”
Parking will also have to be part of the development, and it’s likely a ramp would be built above the theater complex.
Two West Fulton has until January to close on a sale with the city for the former City Centre parking ramp site at Fulton Street and Division Avenue. Two West, a collaboration between RSC Associates of Chicago and Second Story Properties of Grand Rapids, plans to build a mixed-use development there that would include condominiums.
The lot measures 37,000 square feet and Two West agreed to the city’s asking price of $2 million. For this project, Two West will build the parking structure and Parking Services will pay $4 million for 149 public parking spaces in it.
City commissioners gave Parking Services the OK last month to purchase a parcel at the northwest corner of Cherry and Commerce SW from Cherry Street JV LLC for a new ramp with 318 spaces. The 20,576-square-foot property will cost the department $950,000, which is part of the $9.4 million the structure is expected to cost.
City CFO Scott Buhrer recently told parking commissioners the department has enough working capital to afford the project. He estimated the department would use $2 million of the $6 million in that account for the project and then bond for the remainder. Buhrer also thought the department could handle a larger expansion than just the Heartside ramp.
“I believe the system does have the ability [to do so],” he said.
Parking Services is currently paying debt service on three ramps that totals $31 million through 2032. The department owes roughly $8 million on the Ottawa Fulton ramp, $19 million on the Monroe Center ramp, and slightly over $4 million on the Pearl Ionia ramp. Those figures include principal and interest payments.
“By and large, it’s a pretty stable organization,” said Buhrer of Parking Services.
Construction on the new ramp is set to get started in November and could be finished a year later. Buhrer projected the garage would return about $700,000 in revenue in its first full year of operation and cost about $225,000 to operate.
So while one parking facility is a go, green lights also may be given to three others over the next six months or so.
“I’m conservative and my preference is to finish one [ramp] and get it fully occupied before we start the next one. But I don’t know if we can do that or not,” said Ritsema.
Revenue to the department has been fairy steady the past year as the number of monthly parkers has remained stable at downtown lots and ramps. Last month there were 6,388 cards issued to monthly parkers. A year ago, there were 6,363.