Mystery Development Waiting On City

September 1, 2006
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GRAND RAPIDS — The momentum the massive River Grand development carried when first unveiled has been eroded by the uncertainty of acquiring its largest target, leaving the one-time “mystery developer” carefully considering its options.

The brainchild of Atlanta businessman Duane Faust, president of operating entity Grand Rapids Development Corp., River Grand is believed to include 36 acres of downtown property and a multibillion-dollar investment. Little else is known about the project, other than it will be a mixed-use development with office, retail, and residential components. The largest and most significant parcel of land is the 15.8-acre tract of city-owned property at

201 to 301 Market Ave. SW
, commonly known as the Public Works Island. It is currently the subject of a competitive bidding process between GDC and two other firms.

Tuesday’s city meeting limiting the selection to those three was good news (see related story) according to River Grand broker Deborah Shurlow, a realtor with the Grubb & Ellis|Paramount office in Grand Rapids

“But we’re formulating a new game plan based on the new time frame,” she said. “Everything will move along based on that decision.”

In June, GDC announced a team of 10 local firms that had been selected to participate in the project “in the event GDC is selected to participate in the city of Grand Rapids’ Request for Proposals.”

With internal debate concerning the sale growing increasingly contentious, there is a growing possibility that the parcel will remain city property. If that happens, or if the $35 million property is sold to another interest, whether the project will continue remains to be seen.

“While the focus is clearly on the contiguous set of parcels, including the city riverfront property, there are many different scenarios for River Grand to contemplate,” said Don Hunt, a partner with local communications firm Lambert Edwards & Associates and spokesman for River Grand. “If something were to happen in the city process, it would not rule out the project moving forward on the remaining parcels in some configuration of the private land.”

Local architect Tom Dowling, principal of Design Pinnacle Group, is the lead designer for River Grand. He was not as certain the project would continue without the city property, saying it is a decision Faust would address if the need arises.

“Right now, we’re looking forward to the RFP process,” Dowling said. “It’s frustrating from our end, but I can understand where the city is coming from. They’ve had some other property sold recently, and with this they’re trying to make sure all their bases are covered.”

Recent headlines have included a number of former city buildings in which developers have failed to achieve their original plan. One South Division property is currently listed for sale at a significantly higher price than what the city got for it.

Dowling said that no design work has been done on the River Grand project since the bidding began, but negotiations continue on the private property. Another consultant on the project indicated that most of the ongoing work involves lining up the necessary financial resources to move the project forward.

“It’s no secret we have properties under option,” Hunt said. “And no option lasts forever. They’ll make the appropriate decisions depending on the city’s timetable.”

Hunt said his group does not expect to see an RFP for four to six weeks.

As such, the private landowners are now on standby. Dan Ronda, of Ronda Tire at

130 Market Ave. SW
, was one of the first to sign a right-of-first-refusal option with GDC. “We’re just waiting on the city to make a decision,” he said, indicating that the company has no plans for an immediate move, with the River Grand groundbreaking potentially years away.

Next door at

133 Grandville Ave. SW
, it is believed that the Intersection Lounge is still under option. Owner Joel Langlois signed an option months ago, and stands to gain some incredible secondary benefits if the deal goes through. He is the largest landowner in the neighborhood immediately south of River Grand’s
Wealthy Street
southern border, with many of those buildings currently listed for sale.

Langlois was unable to be reached for comment, as was Eric Wynsma of Terra Firma Development, originally a vocal supporter of the development. When Wynsma last spoke publicly, he indicated there was only a verbal agreement between him and brokers Shurlow and Bill Bowling, both of Grubb & Ellis|Paramount. He had never received a deposit, he said, and his 150,000-square-foot property at

202 to 216 Grandville Ave. SW
is currently on the market with a $6.5 million price tag.

Other landowners once closely linked to the project have indicated they are not currently involved. Dave Custer, president and owner of Custer Office Environments, said he has “had zero contact since we hosted the press conference in my building” in June.

Representatives of J&H Oil Co., which leases

248 Cherry St. SW
to Eli’s Mobil Mart, stated that “it will continue to be a Mobil station for the foreseeable future.”

Mark London is continuing efforts to open a strip club at

234 Market Ave SW
, where he has since opened an erotica store. A deal to sell his property to River Grand fell through in April.

“I have not heard from any Realtor, mystery developers or representative of the city since then,” he said. “It’s as if they all fell off the face of the earth. I have heard from reporters, apparently Duane Faust has said we are still negotiating.”

Next door at

235 Grandville Ave. SW
and
248 Williams St. SW
, Moch International has yet to break ground on a 200-unit apartment complex. As recently as May, it was still listed for sale, but no longer is. Moch is one of the two firms competing with GDC for the city parcel.

Another parcel of land recently listed for sale at

330 Market Ave. SW
has since been leased to a small industrial firm, Custom Powder Coating. With that, what would have been the original core of the River Grand project — roughly 10 acres of recently vacant land — is now in the hands of new interests. With the exception of the Wynsma and London properties, no significant investment has been made to any.

“No single property is critical,” Hunt said. “Right now, there is no reason that River Grand won’t take shape in some form.”    

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