- change ups
Knitting A Neighborhood
GRAND RAPIDS — Paul McGraw and his partners want to knit a new neighborhood, and they plan to start with a former bicycle factory site at 514 Butterworth Ave. SW, just a short pedal south of Fulton Street and the GVSU downtown campus.
McGraw, president of McGraw Construction and managing member of Bicycle Factory LLC, has a date next month with city commissioners to revise tax credits the city and state ratified earlier for the renovation of the 110-year-old bicycle factory building.
But a mysterious fire last winter destroyed the structure and also torched the $800,000 worth of historic renovation tax credits the project would have given the partners. The cause of the blaze was never determined, but the partners were very determined to go ahead with a project for the site, especially after all the parties involved in the first blueprint told the developers they would also be there for the second one.“We’re setting the tone for future development in that neighborhood,” said McGraw. “One of the architects said it best when he said, ‘We have to knit the neighborhood back together.’”
That appropriate phrase came from Ted Lott, principal of Lott3 Metz Architecture, the project’s design architect. BETA Design is the architect of record, while Williams & Works is the project’s engineer.
“They’ve all worked hard. Everybody is just killing themselves to get this thing done,” said McGraw, whose construction company will manage the project.
What they’ve come up with is a five-story, 70,000-square-foot building with three floors of commercial and office space on the lower levels and a dozen two-bedroom, 900-square-foot apartments on the top two levels that will sit back a bit from the three lower stories.
“We wanted to be sensitive to the scale of the building, and we don’t have all five stories at the front elevation because we wanted to be pedestrian friendly. We didn’t want it to be cold and overwhelming at the street, so we pushed those apartments back,” said McGraw.
“We needed a combination of new architecture but to still keep it soft because we’re trying to bring that neighborhood back. The most stressful thing about this project is trying to get the right building in there.”
All the commercial space is leased. We Market Success (WMS), a food broker, has agreed to take the second and third floors. WMS is one of the parties that stuck with the partners after the dream they had for the bicycle factory building went up in smoke last February.
“They’re disappointed that they didn’t have the original loft stuff going on; they loved the original building. They were our original commercial tenant. But they hung in there. The guys over there are great guys for staying with us,” said McGraw of WMS.
The ground floor is also leased, but McGraw said that tenant isn’t ready to be identified yet. The apartments will be priced at market rate and will offer an unobstructed and unusual view of the downtown skyline from the Grand River’s west bank.
“It’s going to be something,” said McGraw of the panorama. “A lot of people have not seen that view because they’ve never been back in that neighborhood.”
McGraw said the building, appraised at $5.3 million, will cost $8.3 million to construct. Fifth Third Bank has agreed to finance the construction at the usual 75 percent of appraised value, so that makes the updates to the tax credits the partners are seeking very important to the financial well-being of the project.
Because the partners lost $800,000 in approved historic renovation tax credits when the factory burned and $560,000 in attorney and accounting fees, the project had to get larger to offset those losses and to make fiscal sense. And because WMS and the yet-to-be identified tenant kept their commitments to the commercial space, the project will go forward.
“If we were to have mimicked the size of the original building, the project would not be happening,” said McGraw.
McGraw said he hopes to meet with city commissioners in mid-November to explain the new project, which costs more to build partly due to the damage the fire did to the site, and to ask them to adjust the brownfield and business tax credits they’ve already approved.
“We have to dig out all the old foundations. We know the soil is contaminated. We’re assuming we can’t build on the soil. The old building was probably built on bad fill, so we have to remove that fill to put new fill in,” he said.
The partners have $200,000 in their budget for lugging the toxic soil to a certified landfill, most likely the one in Coopersville, but the cost could end up being more than that.
Despite the higher price tag and the misery the fire brought to the project, McGraw said he and his partners feel good about going forward with the development because others want to see them knit a new neighborhood in an area desperate for development.
“Everybody came together on it. We had a pre-paid parking lease with Grand Valley (State University), $800,000 before the fire, and they called the next day (after the fire) and said, ‘We will work with you, we won’t hold you to it,’ even though it affected them financially and they were planning on it in their budget,” he said.
“The state, the city, the bank — everybody just came together and said, ‘We realize this is a crazy situation, so let’s work together and get this done.’”