True North looking to move south
True North Architecture, Construction and Investments has plans to move from Belmont to a near downtown neighborhood on the city’s west side.
But whether the firm relocates to 607 Dewey NW, a half-block east of the Third Street and Seward Avenue intersection, depends on whether the property’s Renaissance Zone status gets extended. A decision on the extension should be coming soon.
True North is set to spend $1.9 million to renovate and add a third floor to the vacant, two-story structure. The firm would occupy the top floor and lease the lower levels.
True North President Dan Henrickson said he has had his eye on the structure for the better part of two years and decided last fall to move on the building, if he could add a third floor to make the investment worthwhile and gain exposure from the traffic onI-196 nearby.
“Then we’ve got some real opportunities for visibility,” he said.
“What I was struggling with was, the price for the property was a little too high compared to what you could get out of it, from a developer’s standpoint. But once we added the third floor, it kind of made the numbers start to work.”
The existing building has 5,000 square feet on each floor. Adding a third level would give True North 15,000 square feet, which makes the building more marketable and raises the income level the firm would receive from leases.
The property is a brownfield site, and True North is looking to get a Michigan Business Tax credit of $380,000 for the remediation work it will do there. The building is also near the renovations that American Seating, Parkland Properties and Robert Israels have done, all projects that have revived a once-struggling section of the city.
“We wanted to come back downtown. We’ve been up in Belmont for five years; we were in downtown previously. We wanted to do it. But we wanted to do it by making an investment in downtown and not just rent space,” said Henrickson.
Besides the location, the building offers two amenities not readily available in urban buildings.
“We had looked at a couple others. But this sort of stuck out as a great opportunity, as it has on-site parking. We have a construction arm and a development arm, and a downtown building that has a loading dock is pretty rare and unique,” he said.
True North plans to build a green roof that will feature solar panels and wind turbines to produce electricity for the building. Henrickson said the turbines will come from the Michigan Alternative and Renewable Energy Center, which is located at Harbor 31, a True North property in Muskegon. These turbines are new to the market and reportedly operate under a lower wind speed. Henrickson said he wasn’t sure whether he will install two or four turbines on the roof, but he was fairly confident that his building would be the first in the city to have this technology.
Henrickson also said True North will use its brownfield tax credits to create a laboratory in the building to show others how the firm will integrate the panels and turbines into the structure’s operations and how the tenants can lower their incremental costs.
As expected, Henrickson said he will apply to the U.S. Green Building Council for LEED certification once the project is done.
“At True North, we want to be pioneers in an effort directed towards using green for everybody and not just the select few who can absolutely afford it.”
Henrickson said he hopes to start work on the building this fall and estimated that construction would take about six months.
“We will take over the entire third floor, and we’ve got three people interested in taking over the remaining space. One of the things that every single one of these tenants is looking for is the Ren Zone. That is obviously a critical component to every one of our tenants, including ourselves.”
It’s almost certain that city commissioners will extend the property’s zone status, as they did for the nearby Israels’ properties in December. But Henrickson is concerned that county commissioners might not. Recent state legislation gives counties the right to veto an extension and to collect taxes on properties that have been virtually tax-free for a decade. Extending the zone would mean the True North property would be exempt from most state and local taxes for up to a dozen years.
“Most of the properties around us have the extension. So if we go into this market and we’re the only one that does not, we’re at a significant disadvantage. I think it might be one of the last pieces in there that can get the Ren Zone extension anyway,” said Henrickson. “And I think it takes it from a go-project to a no-go project. It’s that important.”