Sligh Proposal May Get Another Shot

January 12, 2007
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GRAND RAPIDS — The city may revise its policy on extending Renaissance Zone status to properties in the city's first zone. And a revision may make the guidelines friendlier to projects that include residential units.

If so, Parkland Realty may get a second look. City commissioners refused to give the development company owned by Jonathon Rooks an extension for the old SlighFurnitureBuilding last month, even though Rooks pledged to invest $30 million in its renovation.

Rooks' request was largely rejected because his plan included 400 rental apartments, along with some ground-floor retail space, in the 665,000-square-foot structure at

446 Grandville Ave. SW.
The current policy gives more weight to businesses that create good-paying jobs rather than to developments that create more places for residents to live, even if the amounts to be invested are the same.

Last week, 3rd Ward City Commissioner James White remarked that if rental units weren't going to be acceptable for zone extensions, the policy should reflect that. But he said he saw Rooks' project as a good opportunity for middle-income people to live near downtown, where the residential market mostly features pricey condominiums.

"Evidently I was in the minority, as other commissioners didn't feel that way," he said.

Only White and 3rd Ward Commissioner Elias Lumpkins voted to give Rooks the 15-year extension, which would have handed the development and its residents 10 years of nearly tax-free status. The current zone and the extension would have overlapped for five years, so even with a 15-year extension, the tax breaks would have lasted for 10 years.

Deputy City Manager Eric DeLong suggested amending the policy to make it more favorable to residential, if the housing units were part of a mixed-use development with either a commercial or industrial element. DeLong said the city's Economic Development Project Team would revise the policy and bring it to the city commission for review and comments.

Economic Development Director Susan Shannon said commissioners should revisit the proposal Rooks submitted.

The extension policy only applies to properties that were included in the first zone that the city established in 1997. Those properties are out of the zone in 2012.

The Economic Development office also plans to bring commissioners a new incentive policy for their consideration. This one centers on the Commercial Rehabilitation Act, which became state law in 2005 and was amended last year. It is similar to the tax incentives tied to the Obsolete Property Rehabilitation Act, but has two chief differences for property owners.

A building doesn't have to be qualified as obsolete to gain the tax break under a CRA, it just has to be at least 15 years old. In addition, a CRA can be used in any municipality in the state, while the obsolete law only applies to core cities, such as Grand Rapids, and to selected townships.

"If everyone uses this, it's not an advantage to us," said City Manager Kurt Kimball.

The CRA abates local taxes on the value of improvements made to a building, but doesn't exempt state and local school taxes. In addition, county governments can opt out of CRA-approved projects, meaning county property taxes wouldn't be abated.

A CRA abatement can last up to 10 years and a CRA district has to be at least three acres in size.

Economic Development Coordinator Daniel Oegema said converting a former industrial plant into office space could make for a good CRA project.

"It wouldn't hurt, I guess, to try to write up something and then discuss it," said White.

No timetables were set for either policy to come before the city commission.    

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