Project's Fate Lies In City's Hands

February 1, 2008
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GRAND RAPIDS — A renovation proposed for the former Junior Achievement building will get a second go-around with city commissioners on Tuesday, as the owner’s request for the city to amend a brownfield was tabled the first time around.

Developer Robert Tol, doing business as Two East Fulton LLC for the project, plans to invest $3 million into the two-story structure that sits directly across Division Avenue from the city-owned site on the southwest corner of Division and Fulton, where Two West Fulton LLC proposes to build The Gallery On Fulton.

Tol has told the city that he will rehabilitate the building and make public improvements that include reconstructing Division Avenue from Fulton to Weston streets. He also told the city that a bank branch has agreed to lease much of the ground floor.

The city awarded the building a brownfield in 2005. But the project Tol planned for the structure at that time included adding four stories of condominiums to the existing two floors. Since the brownfield was awarded, though, the building has sat vacant. And since the project has changed, the brownfield has to be amended.

“Market forces have had an impact on this building,” said Kara Wood, economic development director for the city, to commissioners last week.

But 2nd Ward Commissioner David LaGrand saw the situation differently. He said the property has languished since Tol has owned it, and he remarked there was no guarantee that condition would change if the city granted Tol’s latest request.

LaGrand also wasn’t enthusiastic about Tol’s decision to market the building as retail and office space, with it being situated across the street from The Gallery and a block north of the Avenue of the Arts development.

“I don’t think this is the best use for this, especially on the corner,” he said.

First Ward Commissioner Walt Gutowski also questioned whether Tol’s leasing plan was the best use for that corner. Second Ward Commissioner Rosalyn Bliss said she toured the property and found it untidy. She also said some of the building’s windows were broken.

Tol is asking the city for $471,000 at 4 percent interest for the interior demolition, site preparation and public improvements that Two East Fulton intends to make. Reconstructing Division is expected to cost the developer $1 million in up-front money. The 2005 award gave the building a business tax credit worth $443,800, and that figure hasn’t changed.

LaGrand was concerned with the 25-year payout period that goes with the amended brownfield. He said values of commercial properties don’t normally last as long as residential ones, and felt the payout period should be shortened.

LaGrand then made a motion last week to table the commission’s vote for a week, and commissioners agreed to his request. He also suggested that a revised brownfield agreement include penalties for Two East Fulton, if Tol doesn’t go ahead with the project.

“This property has been languishing for a long time,” said Bliss. “This corner is in dire need of some revitalization.”

The city’s Brownfield Redevelopment Authority amended the award in December.

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