New Commercial Project Set For Vacant Property

August 24, 2008
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GRAND RAPIDS — Because the city recently revised a three-year-old brownfield, a new commercial development will get started on Michigan Street next spring, one that not only has the strong support of city officials but also the backing of neighborhood and business associations.

“It’s an important project for the city,” said Kara Wood, the city’s economic development director.

Rylee’s Ace Hardware, doing business as 1234 Michigan Holdings LLC for the project, plans to construct two commercial buildings for office and retail use at 1234 Michigan St. NE, once the site of a U.S. Army Reserve Center.

Rylee’s owner, Lori Terpstra, told the city’s Economic Development Project Team that one building will have two stories and 20,400 square feet of space for a larger hardware store and a full garden center. The second building will be 8,700 square feet; Terpstra said the space will be leased to office and retail tenants. Rylee’s will invest about $2.4 million into the project.

The Rylee’s expansion comes at a time when big box hardware and lumber chains dominate the market in suburban-like locations, driving longtime neighborhood hardware stores out of business. Terpstra told the city that Rylee’s considered moving to a suburban address.

The existing Michigan Street store has about 10,000 square feet of space, so the new building will double the size of the business.

The current Rylee’s is situated about a block from the new site at 1121 Michigan St. NE, just west of Fuller Avenue. Rylee’s plan is to lease or sell that property to Spartan Stores for the new D&W Fresh Market the grocer is building on the former Duthler’s Family Foods site, which is near the intersection of Fuller Avenue and Michigan Street.

The city first awarded a brownfield in April 2005 for a two-story, 40,350-square-foot medical office building that would have cost $7.2 million to build. But that project only got as far as demolishing the U.S. Army Reserve Center, and Rylee’s bought the property from the developer.

City commissioners approved a tax reimbursement of $517,750 to Rylee’s over a 16-year period for site preparation, infrastructure improvements and an environmental assessment. Wood said the reimbursement awarded to Rylee’s was about $200,000 less than the amount the first developer was granted due to the difference in investments.

Wood also said Rylee’s will ask the state for a Michigan Business Tax credit of $300,000, or 12.5 percent of its total investment in the project, and will create 10 new jobs that will pay from $16,700 to $20,800 a year at its new location. Terpstra said she hopes to begin construction next spring and complete the project within the next few years.

Rylee’s Ace Hardware has been on Michigan Street for about 50 years and has been a family-owned business for several generations, a fact appreciated by five nearby groups. The Heritage Hill Neighborhood Association, the Neighbors of Belknap Lookout, the Fulton Heights Neighborhood Association, the Michigan Street Area Business Association and the MidTowne Neighborhood Association expressed support to the city for Rylee’s brownfield application.

Rylee’s also owns and operates a second store at 4300 Remembrance Road NW in Walker.

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