Three projects to be viewed at GR hearing

February 9, 2009
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City commissioners will learn about separate downtown projects of Robert Israels and Robert Tol at a public hearing next week.

Robert Israels, owner of Israels Designs for Living, has teamed with his son, David, to form Seward LLC. Together they will invest up to $10 million to renovate a pair of west side buildings near the company’s campus.

The first structure is the former Drueke Game Co. building at 601 Third St. NW, on the northwest corner of Third and Seward Avenue. The Israels plan to add 8,000 square feet to the vacant building, ending up with 24,000 square feet of office space when the renovation is completed.

The second structure is the former Enterprise Metals Co. building at 528 Fourth St. NW, on the southeast corner of Fourth and Seward Avenue. The Israels plan to add 4,000 square feet to that empty building, resulting in 13,000 square feet of office space when the work is done. Work has already begun on this project, while the other renovation is set to start in May.

Both properties are considered contaminated sites, known as facilities under state law, but won’t qualify for brownfield tax credits because the buildings are in the city’s nearly tax-free Renaissance Zone. The Israels, though, are asking for a Michigan Business Tax credit of $1.25 million based on their estimated investment of $10 million for both projects.

Together, the two renovations will retain 67 jobs and create 30 new ones. The city expects to receive $18,720 in new income-tax revenue from the renovations.

“The average wage for these jobs is $15 to $45 per hour,” said Kara Wood, economic development director for the city. “The overall revitalization project will significantly increase the density in the downtown area, and it will provide additional space for growth on the west side.”

Robert Tol has been joined by John Tol and Daniel Molhoek to form the Meridian Building Co. LLC, which plans to invest up to $26 million in a new 10-story mixed-use structure with 105 apartments, 10,000 square feet of retail space and a parking deck with 286 spaces at 20 E. Fulton St., on the southwest corner of Fulton and Sheldon Avenue.

The project will offer 115,000 square feet and will go up on a surface parking lot situated behind the former Junior Achievement building, which is owned by Two East Fulton LLC. Robert Tol is the managing partner of Two East Fulton.

The surface lot is a contaminated site and Meridian is requesting an MBT credit of $4.17 million. The partners are also expected to ask for tax-increment financing from the Downtown Development Authority. Construction is planned to start in early summer.

“The project will significantly increase the density in the heart of downtown and will provide additional residential options to area residents. In addition, the project is expected to create approximately 15 retail jobs at an average wage of $8 to $15 per hour, and it will create numerous temporary construction jobs during the 18 to 24 months of construction,” said Wood.

The Meridian Building project has been projected to generate about $110,000 in tax revenue for the city, as none of the property taxes would be abated.

City commissioners awarded Two East Fulton a brownfield for the JA building at 2 E. Fulton St. almost exactly a year ago. That structure was initially to be the home of a new start-up bank, but the lease deal fell through. 

Tol said he should be finished with upgrading the building’s exterior and replacing the windows within a month or so and plans to put a new roof on the structure this spring. But he won’t do any interior work until he finds a tenant.

The JA building is across Division Avenue from The Gallery on Fulton project, which will offer 56 apartments, the new home of the Urban Institute for Contemporary Arts and a city-owned parking ramp.

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