City has two more brownfield requests
Two proposed mixed-use projects asking for brownfield status in Grand Rapids will get a public airing in a few weeks, as city commissioners have set hearings for both on May 12.
TIA2K LLC wants to build a hotel with commercial space and parking on a surface lot at 45 Ionia Ave. SW, owned by the city’s Downtown Development Authority. The firm plans to invest up to $32 million into the project, which should create 95 jobs that are expected to pay an average of $15 an hour.
The developer is a private investment firm comprised of George Larimore and Kent Hildebrand. Both are certified public accounts in the investments division at Grubb & Ellis|Paramount Commerce. Larimore said he and Hildebrand have teamed with Tall House Enterprises, which has title to the property, for the project.
The city stands to gain $102,600 in new tax revenue each year once the hotel opens, along with nearly $30,000 in new income-tax revenue.
City Economic Development Director Kara Wood said the project has been approved for a Michigan Business Tax credit of $4.98 million. She also said the developer isn’t eligible for brownfield reimbursements because the property is within the DDA district.
“It’s located in the DDA, so we’re going to see some DDA support too,” said Wood.
A Fort Wayne, Ind., development firm first told the DDA it was interested in building a hotel there last January. GT RIDMG told board members then that it planned to build an eight-story Cambria Suites on the 25,000-square-foot parking lot, which is just east of Van Andel Arena, and would invest up to $26.5 million to do so.
But Larimore said GT RIDMG fell apart after meeting with the DDA, so his group picked up the project and softened it a bit. The hotel will have 130 rooms, 134 parking spaces, an exercise room, a breakfast-style restaurant, and 7,000 square feet of commercial space on the ground floor.
“Not a whole lot of conference space, just a few small meeting rooms,” said Larimore.
Larimore said the hotel could be a mix of conventional rooms and extended-stay suites. Construction is expected to account for $25 million of the $32 million investment.
“We have no financing commitments for it right now,” he said.
Larimore said he was talking with two operators in the metro Chicago area and with one investment firm in Lansing. He also said they hadn’t chosen a flag, such as Cambria Suites, for the hotel yet, but definitely wanted one.
“In this type of market, you really need that,” he said.
The matter came before the DDA in January because the board and the city retained ownership of the lot even though Tall House Enterprises holds the title to the property. Tall House had planned to build a condominium building on the site, but then a worsening economy and a depressed housing market made the project unfeasible.
So Tall House told the DDA it planned to sell the property to GT RIDMG, and the board went along with the proposed sale. Then the Indiana firm dissolved.
Rockford Construction Co. was to have managed the construction of Cambria Suites and Serve Studio Architecture of Grand Rapids designed the hotel. Larimore thought both firms would remain for the altered project.
“It will probably take two years to get this up and operating,” said Larimore.
The other hearing will be held for the renovation of two small, two-story buildings at 632-636 Wealthy St. SW. Wealthy Street Historic Development LLC plans to redevelop the ground floors for commercial space and the upper levels for housing through an investment of $700,000.
WSHD is asking the city for brownfield status so it can apply for an MBT credit. The firm isn’t eligible for a brownfield reimbursement because the property is in the city’s nearly tax-free Renaissance Zone. At first, commissioners refused to renew the property’s zone status for the entire development, as they decided to only grant an extension for the lower levels. But in January, city commissioners relented and extended the zone to both floors in both buildings.
Once the project fully returns to the tax roll, the city will get $3,000 annually in revenue. The project is expected to create up to 14 jobs at an average hourly wage of $10, meaning the city should get $2,900 in new income-tax receipts.
Todd Ponstein is the sole member of WSHD. He also owns and operates Georgetown Development Co., a Jenison firm that develops and manages commercial and residential properties.