DDA Buys Parking Site
GRAND RAPIDS — The Downtown Development Authority took its first action in some new territory recently, a move allowed by the City Commission’s expansion of the board’s district about a month ago.
The DDA spent slightly more than $2 million to buy four parcels totaling 3.7 acres for a new parking lot that will be used by the downtown shuttle service system. The action came just days after the city approved the expansion plan on Dec. 18, immediately following the plan’s public hearing. Prior to that vote the property was out of the board’s reach.
The land spreads out onto Ionia Avenue and Logan Street SW, near Wealthy Street at the southern edge of the Heartside Business District. The DDA paid Sohogo Inc. $1.3 million for a three-acre parcel and West Michigan Leasing Inc. $731,908 for the rest of the property. The payments were made last month; the money came from the board’s local increment-tax fund, revenue the DDA gets from property owners in the taxing district.
A portion of the site, though, is contaminated. An underground storage tank, which has been removed from the property, leaked gas and diesel fuel. DDA Executive Director Jay Fowler said the seller is responsible for the clean-up, estimated to cost $350,000, and has to have the remediation work done by the end of April.
Fowler also said one of the buildings on the property is occupied by three tenants, and they will remain there until they can find a new location.
“This will generate about $1,000 worth of income for the DDA each month,” he said of the rental revenue.
Because the DDA is financing the purchase of the site and will finance the construction of the lot, Fowler said the board will reimburse itself some of the costs associated with the project. That repayment will come from the bond proceeds that will fund the lot’s construction.
“The purchase of this property exceeds the amount we have in the line item for parking,” he said.
But a date for construction hasn’t been set. Fowler said it could start this summer or it might wait until next year. Work, however, on alternative designs for the lot has begun.
DDA Treasurer Jana Wallace told board members they spent $1.7 million more than the agency took in during the last fiscal year, which ended on June 30. But she said she wasn’t worried about the deficit spending because the tax revenue the DDA captures is meant to be spent.
“In my mind, spending more than you took in is not a concern. There are a lot of things going on downtown,” she said.
Wallace said the board’s audited report listed equity and pooled cash investments of $13 million, and she said that was a healthy fund balance.
“The DDA is very strong financially,” she said. “But when you’ll be talking about your five-year plan, which is coming up soon, you’ll need to be cautious.”