DDA Backs Toughies
GRAND RAPIDS — A pair of demanding renovation projects received support last week from the Downtown Development Authority.
Board members gave Ojibway Development Partners a $50,000 building reuse grant for the firm’s planned renovation of the former Fox Jewelry Store at 83 Monroe Center. The DDA awarded two earlier grants to previous owners of the building, but neither grant was collected because renovating the structure proved to be overwhelming.
“This has been a particularly difficult building to develop,” said DDA Executive Director Jay Fowler.
Ojibway Development Partners is based in Troy. Rockford native Bruce Michael is a principal in Ojibway. Steur & Associates of Farmington Hills is joining Ojibway in the renovation effort and the two firms are creating Fox Lofts LLC for the project.
The partners propose to have commercial space on the ground floor and 16 market-rate condominiums on the four upper levels. The lower level space is being split into two store fronts and one is being reserved for a local restaurant group that doesn’t have a downtown presence. Floors two through five will each have four condos.
The developer told the DDA that reservations have been placed on nine of the 16 condos, and the project would cost $1.3 million. The grant will be used to upgrade the fire suppression system, install a fire-rated stair tower and provide barrier-free access throughout the building.
“I think this is a good proposal,” said Fowler.
The DDA also threw its support to Brookstone Capital LLC last week, as the Midland-based firm plans to renovate the Watson & Heald building at 101 S. Division Ave. Brookstone, which recently bought the 123-year-old structure from Bantam Capital Investments LLC, plans to build commercial space on the ground floor and 21 subsidized rental apartments for the two upper levels. The Watson & Heald has had multiple owners.
“This is a very challenging building to develop,” said Mayor George Heartwell, who added that he supports the project because the building is an eyesore in a redeveloped area.
To make the project viable and create equity in the development, Brookstone needs to capture Low-Income Housing Tax Credits from the Michigan State Housing Development Authority. The DDA agreed to back Brookstone’s application for those credits with a letter of support to MSHDA, which awards the credits through a lottery.
“We won’t know until next year whether they will be successful,” said Fowler.
Brookstone will also be requesting a different tax structure from the City Commission for the building. The developer wants taxes on the apartments to be based on rental income and will seek a PILOT, or Payment in Lieu of Taxes, from the city. But the standard property tax will apply to the commercial space, and the DDA will get a share of the tax revenue.
Fowler said Brookstone was spending $500,000 to renovate the commercial space, and Brookstone principal Karl Chew said the entire renovation will cost about $6 million. Chew added that he also hopes to capture historic tax credits from the state for the project.
“They have the resources to pull it off and are experts at using these tax credits,” said Fowler.
Brookstone received housing tax credits for the Metropolitan Park Apartments, a 24-unit complex it built at 350 Ionia Ave. SW. Fowler said the DDA helped make that project a reality by rebuilding Ionia Avenue and creating the Heartside Park. The apartment complex is located across Ionia from the park.
One downtown project may have hit the skids. KG Development of metro Detroit had talked to the DDA about building a multi-screen theater with retail and parking on the Area 4 parking lot, which the DDA owns. But Fowler said last week that KG Development has backed off from the project and wasn’t actively negotiating for the property that sits just south of Van Andel Arena on Oakes Street SW.