Hopson Flats Part Of New Direction
GRAND RAPIDS — A decade ago, developers were transforming vacant downtown buildings into commercial uses, usually office with some retail. And the result a few years later was that a lot of quality loft-style offices and specialty retail shops and restaurants had moved into restored buildings such as the Peck, Brass Works and Arena Station.
But the trend has turned. There is plenty of available office space downtown, especially with another 60,000 square feet under construction in the district, so developers have turned their attention to building residential units for a specific group of potential tenants.
One such project is coming from The Elevation Group and the D.A. Gulker Group of Fusion Properties. The project is called Hopson Flats, and it should open by August at the latest.
The work involves renovating two former five-story warehouses at 212-216 Grandville Ave. SW into 44 rental apartments and 7,500 square feet of retail space on the ground floor. The buildings have a total of 100,000 square feet.
The conversion will cost the developers nearly $9 million, which includes the purchase price, and they plan to target college students as their tenants. At least seven colleges and universities are situated within a few miles from Hopson Flats.
“What we’ve seen is, there is a large demand for student housing and it’s been underserved in our marketplace, with the expansion of Grand Valley State, Cooley Law School and some of the other schools downtown. We feel it was the right time to bring this product to the market,” said John Green, a veteran developer who left Second Story Properties after six years to start The Elevation Group.
Green said Hopson Flats would help fill an “increasingly large gap” in the number of rental properties available downtown by supplying housing opportunities for over 150 students. Rents would run from $400 to $600 per bed and the development would have a study lounge, a fitness center, a game room, and free Wi-Fi Internet access. Most of the apartments will have four bedrooms, but two- and three-bedroom units also will be available.
“We primarily picked the project because of its location, and it’s just the type of building that we can give the kids the environment they are really looking for. It’s going to have that really cool factor that we think is going to be appealing,” said Doug Gulker of the D.A. Gulker Group.
The project’s location, at Grandville and Cherry, is near The Rapid Central Station.
“One of the biggest selling points of the project is we’re adjacent to the DASH bus system that allows students to get to school, or to even go beyond downtown. For instance, there is a shuttle service between downtown and the GVSU Allendale campus. That allows students to come into the city and live in the city even if they’re taking classes outside of downtown,” said Green.
Green said the development would also create a minimum of 20 new jobs, be a catalyst for continued economic growth in the southwest sector of downtown, and increase the property’s taxable value by more than $2.6 million, or 10 times the current value.
As of last year, the property was worth $13,699 in taxes to the city. But by the summer of 2008, the developers figure that Hopson Flats will pay a tax bill of $137,239. They also said the property will yield over $32,000 a year in tax-increment payments to the city.
The building is within the area covered by the Downtown Development Authority. That’s why the developers received some financial assistance from the DDA last month, when board members agreed to reimburse them the $365,000 that they will invest to make public and ADA improvements to the building.
The DDA won’t pay interest on the reimbursement and won’t use the increment revenue it receives from the school tax to make that repayment. The payment can’t top 75 percent of that revenue in any given year and the reimbursement period ends on Dec. 31, 2017.
As for their part, the developers have to begin construction this month, finish by the end of the year, and prove that they spent a minimum of $5 million on construction costs. The developers also have to follow state construction codes throughout the renovation.
“The fact that this is happening right next door to The Rapid Central Station is exciting,” said Mayor George Heartwell, also a DDA member.
Hopson Flats LLC, the company the firms created for the project, paid nearly $3.9 million for the buildings. Green said a metal sheeting company once worked from the site and cigar boxes were made there, too, when it was known as the Hopson Building.
Kentwood Office Furniture was the most recent tenant, but that was five years ago.
“I put the building under contract and I approached John because of his downtown experience. Between the two of us, we had a construction background with finance and downtown development experiences,” said Gulker. “It’s working out well.”
The Gulker Group will direct construction. URS Corp. designed the renovation.