City gives brownfields to landmark buildings

February 9, 2009
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Monroe Center was the center of attention at City Hall last week, as city commissioners granted brownfields to two renovation projects planned for opposite ends of downtown’s main street.

Flat Iron Holdings LLC, headed by Locus Development partners John Green and Andy Winkle, was awarded a brownfield for its proposed restoration of the Flat Iron, Groskopfs and Herkner buildings on the west end of Monroe Center. Flat Iron will invest $4.5 million into the renovation that will turn the top three levels of all three buildings into 27,000 square feet of modern office space with 5,000 square feet for retail.

Kendall Renaissance LLC, headed by Virgin Soil Properties owner Brice Bossardet, was awarded a brownfield for its proposed restoration of the Kendall building on the east end of Monroe Center. Kendall Renaissance will invest $4 million into the renovation that will turn the five-story, boarded-up structure into 11,500 square feet of retail space on the first floor and 12 apartments on the four upper levels.

Both are historic renovations and both will seek LEED certification.

The $8.5 million investment from both is important for downtown as the four buildings are largely empty.  In fact, the Kendall at 16 Monroe Center NE has been completely vacant for the better part of three decades.

“It’s a significant and highly visible building at the crossroads of Grand Rapids,” said Mayor George Heartwell.

The century-old Kendall is a brick building with two storefront entrances that were once occupied by Grand Rapids Floral and The Camera Shop. Two physicians had a medical office on the second floor, while an insurance company was on the third. The interior has been gutted and none of the building’s mechanicals work.

“He really has his work cut out for him because I’ve been in that building,” said David LaGrand, 2nd Ward city commissioner, of Bossardet.

First Ward Commissioner Walt Gutowski noted that the investment Bossardet is making into his project is nearly that of Locus Development’s, while the Kendall is only about a quarter of the size of the three buildings that comprise the Flat Iron renovation.

Kendall Renaissance is asking for a Michigan Business Tax credit of $500,000, but the firm isn’t eligible for brownfield reimbursement because the building is in the Downtown Development Authority district. But the DDA awarded the developer a $50,000 building reuse grant last month, along with a $35,000 grant to fill the areaway in front of the structure and up to $180,000 in tax-increment financing.

The city expects to receive about $22,000 in new property- and-income-tax revenue each year once the project is completed. Bossardet said work would get started in April and that he hopes to finish by Thanksgiving.

The Flat Iron, 100 Monroe Center NW, the Groskopfs, 122 Monroe Center NW, and the Herkner, 114 Monroe Center NW, are four-story buildings that were constructed between 1860 and 1870. Herkner Jewelers, Baxter Clothing and the Polk City Directory once occupied the buildings. Doctors and dentists had offices on the upper levels 40 years ago and some of those floors were boarding rooms at one time.

Blake’s Turkey Sandwich Shoppe, Groskopfs Fine Luggage & Gifts and Locus Development occupy space in two of the buildings today. Groskopfs has been in its space since 1913. Some of the floors have been gutted, and the plumbing and heating don’t work on every level.

“It’s a very prominent building that is underutilized,” said City Economic Development Director Kara Wood. “This is going to be a historic renovation. Most of the upper floors are not accessible now.”

Flat Iron Holdings will apply for an MBT credit of $527,800 and for state and federal historic tax credits, which could be worth up to 45 percent of the firm’s investment. The DDA awarded the developers three $50,000 building reuse grants last month.

The city expects to get roughly $42,000 in tax revenue from a completed project. Green said work will begin this summer with exterior upgrades and will be done in phases. Cornerstone Architects will design the restorations and Orion Construction will manage the work.

Thirty to 50 new jobs are expected to come from the renovation of the Flat Iron, Groskopfs and Herkner buildings, with the Kendall project adding a dozen more. All four buildings have been classified as being functionally obsolete.  Both brownfield applications will be sent to Lansing for state approval.

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