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Two West Time Added
GRAND RAPIDS — City commissioners gave Two West Fulton six more months last week to close on its purchase of the former City Centre parking ramp site at Division and Fulton.
The six-month extension was the second Two West requested and received this year. The first came in January, which extended the closing date until July 31. The new deadline to seal the deal for the city-owned property is Jan. 31, 2008. Two West has to begin construction on the 37,000-square-foot site within a year of the final closing date or by Jan. 31, 2009.
Two West offered the city $2 million for the land two years ago and outbid four other developers for the site. But with the new amended agreement, the purchase price will rise by the urban CPI figure at closing time.
In addition, the developer will give the city another $15,000 in earnest money on top of the $10,000 Two West gave the city in January for the first extension.
“Two West Fulton is very close to executing a purchase agreement with UICA,” said Parking Services Director Pam Ritsema to commissioners last week.
UICA, the Urban Institute for Contemporary Arts, is the lead tenant for the development Two West is calling The Gallery, which also includes retail shops, an extended-stay hotel and parking. UICA, a nonprofit organization that promotes local arts, is conducting a fundraising campaign to move from its current home at 41 Sheldon Ave. SE to The Gallery.
“This is an important project for the city, a good fit for the Fulton-Division corner,” said Ritsema.
Most commissioners agreed the development would be a good fit for the Avenue of the Arts galleries and the apartments that artists occupy just south of the would-be UICA home on Division. Only 1st Ward Commissioner James Jendrasiak asked if the city could put the site up for bid again because the parking-ramp property has been cleared and vacant for a year-and-a-half.
“I’m going to support this extension wholeheartedly,” said Commissioner Rosalynn Bliss of the 2nd Ward.
Two West is a partnership between Second Story Properties of Grand Rapids and RSC Associates of Chicago. Second Story Properties President Sam Cummings said the project has changed over the past year, mostly due to a slumping housing market that made building condominiums into the development a bad investment, and a rental market where rates would be too low to support apartments.
Cummings said the project is going through its fifth design and that Two West has spent more than $350,000 on design, engineering, marketing and legal fees for the development so far. He added The Gallery will likely need some public incentives to help with the financing, and Two West may apply for New Market Tax Credits, a brownfield and a green roof grant. Two West might also approach the Downtown Development Authority for help.
The city is interested in seeing the project go forward because some of the parking would be available to the public. Parking Services plans to buy about 150 spaces at The Gallery for $4 million, a move that would help fill the current parking void that exists in an area around the east end of Monroe Center.
At the request of merchants and nonprofits, the Downtown Alliance asked Ritsema earlier this year to build a temporary lot on the site. Ritsema said the cost to build a bare-bones lot with up to 100 spaces would be $158,000. But she decided in April not to build the lot because she wasn’t sure Parking Services had enough time to recoup its investment if Two West closed on the sale by the end of July.
With a second extension in place, 2nd Ward Commissioner Rick Tormala asked Ritsema if she would put a lot on the site now. Ritsema said her department’s situation was the same; that there wouldn’t be enough time to recover the cost of building the lot.
“What we really want to see there is a mixed-use building,” she said.