2007 Year in Review part 3

January 4, 2008
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July

Convention and Visitors Bureau President Steve Wilson would become busier than usual for the next few months because a bill introduced by state Rep. Michael Sak, D-Grand Rapids, made it through both chambers. The legislation gave the CVB a chance to collect another $2 million annually in lodging taxes, but Wilson said he would settle for half that amount. That $1 million, with revenue from other new sources, such as the Convention and Arena Authority, would allow the bureau to raise its annual marketing budget from $3 million to $5 million. Wilson said the additional dollars were necessary now that his staff was competing against larger urban areas such as Columbus, Milwaukee and Indianapolis to bring convention business to DeVos Place. A bigger budget would also let the bureau extend its marketing reach to bring more tourists to Michigan's "West Coast."

As lawmakers offered myriad proposals for changes to the state tax structure, House Speaker Andy Dillon, D-Redford Township, said his chamber was looking to raise $1.5 billion in new revenue to fill the projected deficit in the general fund for the next fiscal year. Part of that plan was to raise the state's income tax. Another proposal would extend the 6 percent sales tax into new areas. If passed, tickets to sporting events, concerts, shows and movies would be taxed. So would the cost of a round of golf, a game of bowling and membership in a health club. The addition of the tax to those items was pegged to bring in more than $100 million annually in new revenue. But lawmakers were hard pressed to find anyone in those businesses to praise the levy, called a luxury tax, in Lansing.

Bata Plastics, a leading member of the local sustainable business community, was the first company to commit to the Grand Rapids Commerce Center being developed by Ashley Capital on 206 acres in southeast Grand Rapids. Bata is the largest industrial plastics recycler in the region and is leasing a building and 10 acres from Ashley Capital on the former Steelcase Inc. campus between 44th Street and Eastern Avenue SE. Bata Plastics has an option to purchase the property, and Ashley Capital Vice President of Leasing Kevin Hegg told the Business Journal Bata is likely to exercise that option. Ashley Capital, a New York-based real estate developer, bought the property from Steelcase Inc. earlier in the year and planned to redevelop the site for retail, office and industrial uses. Principal Paul Rubacha said his company plans to place the site back into full productive use. Hegg said Ashley would lease or sell buildings on the campus.

City commissioners made the Brikyaat Plan the first to be admitted into the city's Master Plan. They also agreed to a required review process for the five-year-old planning document. Brikyaat is in the Midtown neighborhood, and residents there took it upon themselves to develop a plan to advance residential and business activity in the area. They devoted three years to the process, raised more than $70,000 in grants from a handful of foundations to fund it, hired a professional planner to guide them through it and got their plan officially recognized by the city in March. Brikyaat is in the city's 2nd Ward, has about 250 households and a dozen or so small businesses.

Physician representatives and project neighbors were enthusiastic about Spectrum Health's proposed $98 million renovation and expansion of Blodgett Hospital. East Grand Rapids, a 10,373-resident suburb, which grew up around Blodgett, also was abuzz over the announcement. Spectrum announced it would, over the next three years, to build a five-story, 125,000-square-foot addition along the Wealthy Street side and to renovate nearly the entire 284-bed hospital. Operating rooms are to be enlarged and added, with the capacity to expand from 14 to 18 in the future. Four-hundred full-time jobs are expected to be added over five years to the 1,400 current employees. Blodgett is East Grand Rapids' largest employer.

It was announced that work on a four-story parking ramp and an improved terminal building at Gerald R. Ford International Airport was tentatively scheduled to get off the ground in September, marking the single-largest infrastructure development project in the airport's history. The airport was set to open construction bids, and planned to close sections of its long-term parking lots and establish alternate parking on Aug. 1 to get ready for the $115 million project.

Walker set a timetable for key steps in the $200 million Orchard Park retail/tourist/residential project that a developer wants to build around a Cabela's sporting goods superstore. Meanwhile, Walker Mayor Rob VerHeulen received a letter, dated July 20, from Cabela's Michael Callahan, senior vice president of retail operations, stating that Cabela's wanted to be part of the project "so long as all of the various components of the financing package can be satisfactorily finalized in a timely manner. We understand that the timeline suggests that final approvals can be provided by the end of September. We could potentially be under construction early next spring with an opening by spring 2009."

August

A new $25 million Class A office development was planned for the Glenwood Hills Office Park along I-96 near the M-6 junction. Rockford Development Group and The Hinman Co. joined forces to develop the property, the last available parcel in the prime office park. The project marked the first time the two firms collaborated on a joint venture. They formed Glenwood Development Partners LLC for the project, which had been in the works for the better part of two years.

While the hotly-debated application process for the state's Tool and Die Recovery Zones might soon be at an end, the program is set to remain in full swing until at least 2022. Whether it will succeed in saving the state's tool and die industry over that time period remains to be seen. "This is not a gift to survive a few more years without changing," said Jay Baron, president and CEO of the Center for Automotive Research in Ann Arbor and the driving force behind the collaborative tool and die business model. "You need to change, and this is an opportunity to do that: It will be a huge mistake to pass it by. You'll be even worse off than you are now." Arguably the most controversial incentive program in a generation, the program was launched in 2004 to entice tool and die firms to adopt a collaborative business model piloted by the Center for Automotive Research in 2002 that brought together a diverse group of 17 companies from across the state.

Because most of its manufacturing facilities are in Kentwood and Gaines Township, and because the firm sold more than 200 acres of its main campus to Ashley Capital, Steelcase Inc. went about remaking its property in the city to better reflect its current identity. Work got started on a $17 million project to integrate the Steelcase Global Headquarters building at 901 44th St. SE with the nearby Learning and Exploration Center. At the same time, the office furniture designer and manufacturer planned to make major physical changes to portions of the longstanding corporate property.

A pair of area communities appeared on the verge of landing one of the largest national retailers/tourism magnets of all: Cabela's. And they used some clever financial public partnership strategies to make sure they secured the project, which could have an impact of at least $200 million on West Michigan. Wyoming City Council members decisively followed the lead of their peers in Walker to approve a Public Act 425 agreement. The plan would allow tax-increment financing for the proposed Orchard Park project by transferring jurisdiction for taxation of the 300-plus acres from Walker to Wyoming for up to 30 years. Wyoming's tax rate is almost eight times the Walker rate of 1.36 mills. Wyoming also is a state designated "core city" — Walker is not, which means Wyoming can, under state brownfield regulations, use some of the tax revenue from the Orchard Park site to pay off long-term bonds that would finance the estimated $20 million in infrastructure and environmental cleanup.

Existing life sciences companies in the region can assist The Right Place Inc. and Southwest Michigan First in their efforts to draw more life sciences investment, research and entrepreneurs to the greater West Michigan area simply by doing business together. The two regional economic development organizations banded together to leverage the life sciences assets of both metro Grand Rapids and Kalamazoo. They believe the region already has significant momentum as a developing life sciences center and want to ramp it up. The assets in greater Grand Rapids and Kalamazoo are so complementary and in such close proximity, said Ron Kitchens, president and CEO of Southwest Michigan First, that it makes tremendous sense to combine efforts. 

A new three-story downtown office building was set to go up on the west bank of the Grand River, staking its claim as the largest new development along the river's west side. Developer Front Street Property LLC made plans to redevelop contaminated property at 678 Front Ave. NW about a block south of the Sixth Street Bridge. The new building is to feature 46,000 square feet of office space atop a two-story parking deck. Plante & Moran plans to occupy two floors of the $8.5 million building, and Christman Co. will occupy half of the third floor, said Joe Hooker, development services manager for Christman Co. The 3,000 remaining square feet will be available for lease. The structure will be called the Plante Moran Building. Hooker said neither his company nor Plante & Moran are partners in Front Street Property.


September

Construction crews continued to pound out the initial phase of the $70 million Grand Landing development in Grand Haven. Half of the condominium units in The Village at Grand Landing were already spoken for, with a pair of model units opening during the month as part of a marketing push leading to a projected Oct. 1 ribbon-cutting. Designed as a resort property and not a housing development, The Village saw condo sales evenly split between primary residences, second homes and rental properties. The retail space on the ground floor was 80 percent leased, with an eclectic mix of new and relocated shops. The waterfront condos, ranging in price from $400,000 to more than $1 million, were planned to break ground in the fall for a summer 2008 ribbon cutting, along with a boardwalk several feet above the shore and a 300-foot outdoor theater that would double as a skating rink during the winter months. All but three of the 24 waterfront units were reserved. Construction of a 123-room hotel, 17,000-square-foot convention center, 18,000-square-foot market, four stand-alone restaurants and two additional housing projects was planned for subsequent phases.

Third Coast Development LLC sought approval from the Holland Charter Township Planning Commission to move forward on a $10 million professional or semiprofessional baseball stadium near downtown Holland. With the special-use request eventually granted by the township, construction on the first phase of the 45-acre Hart & Cooley property for the $50 million to $70 million Federal Square mixed-use development could begin in early 2008.

The dedication of the JW Marriott luxury hotel on Sept. 19 included a familiar name as a guest of honor: J.W. "Bill" Marriott Jr., chairman and CEO of Marriott International, joined Rich DeVos in dedicating the new $100 million hotel in a private ceremony for VIP guests, followed by a reception that included tours. The hotel opened to the public on Sept. 21. The JW Marriott Grand Rapids is the only one in the Midwest: There are 16 in the United States, and a total of 36 worldwide. Plans for the facility featured an idea that didn't survive, but resulted in some high-profile publicity for the new hotel. In May, General Manager George Aquino announced that the JW would be one of the nation's first hotels to have a female-guests-only floor. The thought was that having one entire floor — 16 rooms — just for women would offer the maximum opportunity for security and comfort to women travelers. That sparked a flurry of worldwide publicity and a debate about the legality of excluding males from lodging because of gender. The plan was even a hot topic of debate on NBC's "The Today Show."

Hackley Health and Mercy General Health Partners announced intentions to merge operations into a $500 million regional health care system to be owned and operated by Catholic health care conglomerate Trinity Health. Effectively ending a century of competition in the Muskegon market, the long-rumored move was a direct response to growing financial pressures and increased regional competition, primarily from health care providers in Grand Rapids. Leaders from both hospitals were candid about intentions to elevate Muskegon as a regional health care destination that would provide an alternative to Grand Rapids for both lakeshore residents and outlying areas.

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