- change ups
Extended Stay To Get Extended Review
GRAND RAPIDS — City commissioners will hold a public hearing next week to amend a brownfield awarded to Icon on Bond LLC almost three years ago. The brownfield plan needs to be revised because the development listed for one of the sites has changed.
Instead of building an apartment complex on the northwest corner of Trowbridge Street and Bond Avenue, Icon on Bond wants to put up an extended-stay hotel. The hotel would be across Trowbridge Street from the Icon on Bond condominium building, a nine-story complex with 118 units and enclosed parking that cost $35 million to build.
Joseph A. Moch and his father, Joseph W. Moch, comprise Moch International, the parent firm of Icon on Bond. The Mochs are doing business as SSGRCC LLC for the hotel project, a $20 million investment being financed by a Chicago firm. The hotel would be nine stories, the same height as the condo building, and have 90,000 square feet of space for 137 rooms. The rooms would be a mix of studio units, one-bedroom and two-bedroom suites.
“We hope to break ground within three months after the MBT is approved,” said Joseph A. Moch.
The Mochs are requesting a Michigan Business Tax Credit of $3.2 million. City Economic Development Director Kara Wood said the Mochs plan to sell the tax credit and invest the proceeds into the project. The state has allowed the MBT credit to rise from 10 percent to 12.5 percent for the next few years. The Mochs’ overall investment in both projects will reach about $56 million.
The original brownfield tax reimbursement of $1.8 million at an interest rate of 4.5 percent remains. It will take the Mochs about 23 years to be repaid for the site preparation and public infrastructure improvements they have all but finished near the condo and hotel properties.
“There is no change in the tax-increment finance plan,” said Wood of the brownfield the city and state approved in 2005.
Wood said the hotel would bring up to 30 new full-time jobs to the city, with wages ranging from $10 to $17 an hour, and add $8,100 a year to the city’s income tax roll.
City commissioners approved a parking lease agreement for the hotel last September that lets the Mochs rent up to 70 spaces in the city-owned North Monroe lot on Monroe Avenue at Trowbridge Street. The lot is a block west of the hotel site, and guests will have 24-hour access to the lot.
The Mochs hired PKS Consulting to conduct a market study on what type of hotel they should build, and the extended-stay version emerged as the best option. Joseph A. Moch said the average stay at an extended-stay hotel is eight days. But he also explained that many guests stay much longer than that.
“They have had people that have stayed in some of them in the country ever since the hotels have opened. Some people do a snowbird-type thing in some of their properties down south, so some people stay for three or four months,” he said.
“Then some corporations will have accounts with the brand, nationally. So if somebody is moving into Grand Rapids and they don’t want to buy a house quite yet, they will put them up for three or four months until they find a place or get a feel for the area.”
The national brand he referred to — the one they are bringing here — is Staybridge Suites, an InterContinental Hotel Group brand. IHG is the world’s largest hotel group, ranked by the number of rooms, with 585,000 rooms in 100 countries under its banner.
Crowne Plaza, Holiday Inn, Holiday Inn Express and Candelwood Suites are also hotels owned, leased, managed or franchised by IHG. IHG has 115 Staybridge Suites in the U.S., five in Canada and 157 more in the works, with 139 of those targeted for this country.
The condo and hotel properties are in the city’s Renaissance Zone until 2012, meaning many state and local taxes are exempted, at least partially, for nearly four more years. The hotel construction will be managed by the Wolverine Building Group, the same firm that directed the work for the Icon on Bond project.
Wood said the change to the brownfield would likely go before commissioners for approval on May 27.