Third Coast Plans New Building

March 10, 2008
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GRAND RAPIDS — City commissioners will hold a hearing next week on a brownfield request made by Third Coast Development Partners LLC for a new commercial structure that is planned for the former Bishop’s Furniture site.

Third Coast would build and own the single-story, 22,000-square-foot structure at 1697 Michigan St. NE, located roughly a mile east of the Medical Mile. Third Coast plans to lease the entire building to Spectrum Health. The region’s largest health care system would develop and operate a child development center there and provide child care for its Grand Rapids and East Grand Rapids employees.

“If you think about it strategically, it’s located kind of at the nexus of Kent Community Hospital, Spectrum Health Butterworth and Spectrum Health Blodgett. It’s about a mile from each of those three campuses that Spectrum runs,” said David Levitt, a principal with Brad Rosely in Third Coast.

“And that’s kind of good for them.”

Spectrum plans to transfer its employee child-care services to the new building from a site on Lake Drive SE and from one on the Blodgett campus.

“This helps pave the way for the development Spectrum is doing in East Grand Rapids,” said Levitt of the provider’s planned addition to the Blodgett campus.

Levitt told the Business Journal he hopes to have brownfield approval by mid-April so demolition of the longstanding Bishop’s Furniture building can get started. He also said he hopes to have construction work finished by September.

Integrated Architects designed the building and Cunningham-Limp will manage the construction, which has an estimated price tag of $3.4 million.

The city’s Brownfield Redevelopment Authority gave its blessing last week to the project, which is asking for a nine-year tax-increment reimbursement of $380,500 for demolition of the current structure, asbestos and lead removal, site preparation and a few other activities. Third Coast is also seeking a credit worth $344,425 from the state business tax. Both the city and the state have to approve the brownfield.

“It meets the criteria for an obsolete building,” said Levitt. “The building has all kinds of issues with it.”

City Economic Development Director Kara Wood reported that Spectrum will have 30 full-time workers in the building, and 15 of those employees will come from outside the city, most likely East Grand Rapids. Wood said those new jobs would add about $5,600 of income-tax revenue annually to the city.

“It qualifies because it’s an obsolete structure,” said Dan Oegema, the city’s business advocate. “We expect to have some 30 people working there and quite a few kids.”

Third Coast is working on another project in the city. Levitt and Rosely are hoping to bring a five-story, 149-room Hyatt Place Hotel to Mid Towne Village, a development of 16 acres they started a few years ago just north of Michigan Street.

Levitt said he’d like to see work on the hotel start this summer and have it open by the following summer. But they’re waiting for a report on a feasibility study the ownership group has commissioned before the start date can actually be set.

“They have to go through their process and that could take a few more months. And depending on the outcome of that, it’s not certain yet. I would say it’s highly likely,” he said of the project going forward and starting this summer.

Levitt said the report would reveal whether there is a need for a hotel on the site and if it would be a successful venture. Three entities are working together on the project. Joining Third Coast is Hyatt Hotels and an out-of-state ownership group that prefers to remain anonymous at this point, which may also operate the business.

Levitt said Third Coast might end up owning a portion of the hotel.

“Right now, we’re negotiating with them as to whether or not they want us to stay in the project as owners, or if they just want us to develop it for them and hand them the key. We’d kind of like to be a partner,” he said.

The city amended the Mid Towne Village Planned Unit Development recently so the hotel’s zoning requirements have been met.

The Women’s Health Center, Park Row Condominiums and The Omlette Shoppe restaurant have already located in Mid Towne, which is bordered by I-196 to the north, Michigan Street to the south, Paris Avenue to the west and Benson Avenue to the east.

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