Lear Plant Enters Next Phase
WALKER — Walker city officials could take another step soon to continue the revival of the massive former Lear Corp. plant on Alpine Avenue NW.
In a few weeks, city commissioners may vote on two agreements that are vital to getting the 750,000-square-foot building ready for lease. A development contract and a loan agreement with Blue Bridge Ventures CEO Jack Buchanan are set to come before the commission on Sept. 28, as long as the city receives the loan payment schedule from the state by then.
Walker officials were recently informed by the Department of Environmental Quality that the loan application the city filed on behalf of Buchanan was approved for $1 million, the amount that was requested. It’s a 15-year, low-interest loan, and a payment doesn’t have to be made for the first five years.
But the city won’t be making the payments; Buchanan will.
“The obligation (of) paying the loan goes back to the developer. We do that through a development agreement; it’s separate from the loan agreement. And we just finished negotiating that agreement on (Aug. 30) with Jack,” said Walker City Manager Cathy Vander Meulen.
“So he will be responsible to pay back that loan. As security to ensure he does that, he will be required to submit to the city a letter of credit. From a public policy standpoint, this is not an obligation that the city will have.”
Having the city apply for the loan gives Buchanan a lower interest rate than he would have been charged had he borrowed the same amount from a commercial lender. And not having to make the first payment for five years gives Buchanan time to build equity in the project from tenants’ rent payments before having to write that check.
Vander Meulen told the Business Journal that $700,000 of the loan would be spent on replacing the flooring in the southern portion of the plant, and the remaining $300,000 would go toward additional testing and remediation that may be needed in other sections of the building that General Motors Co. built.
“GM did this in a lot of their plants. They put a wood floor on top of the original floor. So there is actually six to nine inches of concrete underneath about a two-inch wood floor. It’s just something that nobody would really want, the wood floor, and it does have some light levels of PCBs in it. It’s not a major issue,” said Buchanan.
“We will wind up with what will look like a brand new floor. We’re going to resurface it, and we’re still trying to figure out the best way to do that. But at the end of the day, it will look like a brand new building. It will have a new paint job, lighting and flooring, so it will be a pretty nice facility when it gets done,” he added.
Buchanan has been joined by his father, John C. Buchanan, in the project. It’s the first time the two have worked together on a development. John Buchanan has done real estate deals in the past, mostly in Kentwood and Cascade Township. The two formed The Alpinist Endeavors LLC, a name chosen for the 41.5 acres on Alpine Avenue the plant occupies.
“It’s a great project, and I’m kind of excited,” said John Buchanan. “I really think the people of Walker are great and progressive. This building is very important to them.”
One tenant is in the building. Amstore, a Coopersville company that makes shelves, display racks and other items for retailers, has about 50 employees working there.
If commissioners approve the upcoming contracts, then the city and Buchanan will get together to hammer out an agreement to put the plant in a Renaissance Zone — a move that will make the property nearly tax-free for 12 years and require only partial tax payments for the following three years. If the city gives the zone its blessing, then the contract will go to the Michigan Economic Development Corp. for its review.
“The city will help Jack put together a plan for that property, and we will help Jack work that through the MEDC, because they, ultimately, are the one that will say yea or nay on the Renaissance Zone, even though that site is eligible through the effort Rep. Hildenbrand made and one that we’re very appreciative of,” said Vander Meulen.
State Rep. Dave Hildenbrand, R-Lowell, led the charge to qualify the Lear site as a zone by adding the plant to PA 116, which was passed last April.
“The Ren Zone was the second piece I did. The first piece was to allow them to take advantage of the brownfield redevelopment tax incentive, as well. That was signed into law, and now this one was, too,” said Hildenbrand last spring.
DEQ Director Steven Chester said his agency is keen on helping communities transform abandoned industrial sites into vibrant developments.
“This project is a great step forward for the environment and the economy of Walker,” said Chester.
If the plant gets the zone designation, it will make it easier for Buchanan to draw tenants to the industrial building and fill the facility with workers. According to a recent survey from Grubb & Ellis/Paramount, a commercial real estate firm, leasing in manufacturing buildings was up for the second quarter, and that could be a good omen for Buchanan.
On top of that, Vander Meulen said she had a good feeling that the plant will be placed in the zone.
“It’s going to take a bit of work to hammer it out,” she said. “But I’m very confident that we’re going to be able to do that.”