2007 Year in Review part 1
The new year dawned with one of the most historic and poignant moments in the history of West Michigan. The late President Gerald R. Ford made his final journey to his hometown, as the community paid last respects to its favorite son, who died Dec. 26, 2006, at age 93. As the family of the nation’s 38th president brought his body home for an unprecedented outpouring of affection from local citizens, the impact of the life of a single individual was measured around the world, and the global media focus was put squarely on Grand Rapids. City Manager Kurt Kimball said more than 1,000 local, state and federal personnel were involved in the tribute to President Ford, an event that included two motorcades, public viewing and his funeral and internment. The city’s cost for the tribute was listed as just under $289,000, with the Police Department accounting for $237,000 (the city would have spent $107,000 on police staffing over that period in normal circumstances).
As economic life went on, the future of retail on downtown’s main street was again tested, as one of two much-sought-after anchor stores, which had opened nearly a year prior, closed its doors. The departure of River Bank Books & Music at 86 Monroe Center raised the question of how successful a retail business can be downtown when an owner advertises regularly, offers goods perceived to be in demand, stocks the shelves fully and promotes the store constantly.
As retail outlets struggled, downtown residential prospects continued to hit the drawing boards. Seen as possibly the last major condominium project in the massive wave of recent development downtown, the developers of Tall House at 45 Ionia Ave. SW hoped a first-quarter marketing blitz would push it over the presale groundbreaking quotient. The $30 million, 11-story Tall House was the last of several major projects to be announced, so it did not surprise Tall House principals that its occupancy commitments didn’t keep pace early on with competing construction projects such as River House and Icon On Bond.
Health sciences continued to be the current and long-term spark to the region’s economy. MichBio, the state’s life science industry trade association, began construction of a Life Sciences Pipeline that’s expected to promote the growth of life sciences in Michigan. The Michigan Economic Development Corp. selected MichBio to develop a network linking life science researchers and businesses with vendors as a means of accelerating the commercialization of new health-related products and services in the state.
The Michigan State University Board of Trustees voted in early January to purchase the “Unit 5” building in the Michigan Street Development medical complex to house the MSU West Michigan Medical School. The building is being named the Secchia Center in recognition of MSU alumnus Peter Secchia. Secchia’s gift will total $20 million toward the $40 million in private support that’s needed for the project.
Plans were unveiled to put design in the forefront in helping West Michigan’s economy, as members of the regional design community drafted a proposal for a design council as one of the 12 Workforce Innovation in Regional Economic Development (WIRED) grant innovations. Goals would include creating a cluster of design services and bringing together people from various areas of design.
Entertainment and meeting venues continued to fill in Grand Rapids. Halfway through the fiscal year, revenue to DeVos Place was consistent with the SMG forecast at just under $2 million. But revenue at Van Andel Arena at the midway mark exceeded the SMG projection by $400,000, reaching $2.7 million. Arena revenue was up because the building hosted some hot-selling concerts during the first half of the fiscal year.
The Convention and Arena Authority planned to choose a producer for a first-ever wine-tasting event that would be more like a full-blown tradeshow to be held in DeVos Place. The event would be based on the success of a three-day annual event held in Ottawa, Canada’s capital city.
Celebration corks were not popping in Muskegon, however, as — after constant losses since 2000 — Magana Entertainment Corp. announced that the 2007 race season would be its last at Great Lakes Downs, causing potential financial loss to related businesses and the agricultural industry. Magna determined that it couldn’t continue to lose money year after year, waiting for legislation to allow for other forms of gambling such as off-track betting, online wagering and slots.
Footballs were ready to fly at Van Andel Arena. The Grand Rapids Rampage kicked off the marketing campaign for its 10th season with a 30-second regional advertisement during the Super Bowl, seen locally on CBS affiliate WWMT-TV3. The ad strived to capture the fast-paced action of the Arena Football League. It featured footage of downtown Grand Rapids and 86 local volunteer extras running through the street near the Van Andel.
West Michigan manufacturers gained a new opportunity to be lean, clean and green with a $396,800 grant from the Environmental Protection Agency. The West Michigan Strategic Alliance and The Right Place Inc. will collaborate to use the grant to increase participation of area manufacturers in the Green Suppliers Network. The network is a national program that helps support implementation of sustainable business practices.
Alticor Inc. companies reported annual sales of $6.3 billion in 2006, down from $6.4 billion posted in fiscal 2005. Company officials attributed the decrease in sales to a “period of regulatory uncertainty that chilled sales in China.” The Amway group posted sales increases in 45 of 55 affiliate markets in 2006, with the most substantial increases in Europe, where sales jumped more than 40 percent.
Construction industry optimism was the prevalent theme in early 2007. With cranes dotting the skyline, a ballooning health care cluster and even the occasional industrial expansion, West Michigan was outperforming the Michigan construction market as a whole. In most non-residential sectors, volume was up in 2006 over 2005, and the market was expected to experience steady or increased volume in 2007. A commercial real estate forecast from Grubb & Ellis|Paramount Commerce indicated strong retail and industrial investment, with Grand Rapids office construction at its highest point in a decade: Nearly 400,000 square feet was on the books in 2006.
Downtown Holland continued to thrive as it was announced the city would be the flagship location for a new chain of boutique hotels. Ground was broken Feb. 6 for Charter House Holdings LLC’s new hotel at 7th Street and College Avenue, with plans to open later in the year. The hotel was slated to have 11 different room layouts with a unique design in each of the 56 rooms. A penthouse restaurant featuring seating for 150 indoors and 50 outdoors also was included in the plans.
After seven years of lobbying and litigation, it appeared all but certain there would be a tribal casino in West Michigan’s backyard, leaving stakeholders anxiously planning their next move. In a surprising turn of events, Gov. Jennifer Granholm signed a compact with the Match-E-Be-Nash-Se-Wish Band of Pottawatomi to allow Class III gaming at its Gun Lake Casino in Bradley near Wayland Township. The tribe also anxiously awaited a federal appeals court decision on whether the U.S. Department of Interior would be allowed to take the former Ampro manufacturing facility into trust for renovation as a 147-acre casino.
In Grand Rapids, the ballyhooed “mystery” project was no more. A reliable source told the Business Journal that many city officials had doubts that Grand Rapids Development Corp., headed by Atlanta businessman Duane Faust, could finance the River Grand project, a scheme that would have invested up to $2.5 billion in downtown properties.
The same source said the media coverage of the so-called “mystery development” pushed city officials to act on the plan in an effort to be accountable to the public — despite their misgivings of the project’s credibility. The constant reporting of a potentially record-setting investment coming to downtown drove the city to offer for sale 15.8 acres of riverfront property at 201 Market Ave. SW — the Public Works Island — for $35 million, through a two-tiered process that first involved letters of interest and then requests for proposals.
“We are rejecting this proposal as incomplete and as non-responsive,” said Eric DeLong, deputy city manager, at a news conference. “We will send them a personal letter,” he said, adding he hadn’t told Faust before he told local reporters. DeLong said GR Development Corp. owed the city some money but wouldn’t reveal the figure. He added that the city probably wouldn’t pursue those dollars.
Meanwhile, it was no mystery that an ugly national economic trend was also taking hold in West Michigan. More than 1.2 million foreclosures were reported in the United States in 2006, up 42 percent from 2005, according to RealtyTrac, a company that follows trends in foreclosure. A 70 percent increase in foreclosure activity in January pushed Michigan’s rate to second highest among all the states.
“While foreclosures are not at historically high levels, a 42 percent, year-over-year increase is certainly noteworthy,” said James Saccacio, CEO of RealtyTrac.
Michigan was among the top 10 states in the nation with the highest foreclosure totals and highest foreclosure rates in 2006, RealtyTrac’s U.S. Foreclosure Market Report shows. Detroit was especially hard hit.
In Kent County, there were 2,478 foreclosures recorded with the Kent County Register of Deeds in 2006. That compares with 1,427 foreclosures in 2005 and 1,264 foreclosures in 2004. Those are only the recorded foreclosures, noted Jerry Czaja, chief deputy register of deeds.
With all of the grim news, however, a shining light continued to emerge. Van Andel Institute and Spectrum Health announced the establishment of a $6 million Center for Molecular Medicine to research diseases such as cancer, heart disease and mental illness at the DNA, RNA and protein levels.
The two institutions announced the joint venture at the Grand Valley State University Cook-DeVos Center for Health Sciences. The top floor of the building houses the Center for Molecular Medicine.
Richard Breon, president and CEO of Spectrum Health, said the center will lay a foundation for personalized medicine and for future initiatives that will advance the development and delivery of highly targeted, individualized diagnostics and therapeutic treatments.