Watson Heald is healed corner

August 3, 2009
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It’s a pretty remarkable story.

Brookstone Capital LLC finished its renovation of the Watson & Heald building late last month and held a ribbon-cutting ceremony last Thursday. Developer Karl Chew invested about $6 million into the 124-year-old structure and renamed it 101 South Division Lofts. The building now has 20 moderate-income, loft-style apartments on the upper levels and 6,000 square feet of commercial space on the ground floor.

Back in 2002, the future of the building was a large question mark. That was the year the city of Grand Rapids took possession of the vacant building after its owner failed to reimburse the city $165,000 for the emergency repairs made to the sagging roof.

The city then listed the building for a year to no avail, and even tried to auction it off at a series of auctions held in the lobby of the former Hall of Justice at Michigan Street and Monroe Avenue. A local development group eventually bought the building for the cost of the roof repairs in a competitive bid held in 2004, but the firm didn’t go forward with a renovation because it couldn’t find a tenant for the commercial space.

Brookstone Capital came along a few years later. The Midland-based firm, which also developed Metropolitan Park Apartments on Ionia Avenue, bought the building from the development group two summers ago. Chew used a combination of federal and state tax credits and a payment-in-lieu-of-taxes agreement made with the city to finance a sizable portion of the renovation work.

The building has about 40,000 square feet across its four stories. Only three of the levels can be seen from Division Avenue. The basement level is visible from Oakes Street; it is a parking garage for residents.

Fryling Construction Co. project manager Aaron Jonker said the renovation took about nine months to complete.

“Structurally, it was in really bad shape. Every time we turned around, we ended up replacing more material than we had originally anticipated. We ended up removing about eight feet, which is about 3,000 yards, of contaminated peat moss material from underneath the building before we put parking in the basement,” he said. “We kept as much of the original structure as we could.”

Brookstone Capital will seek LEED certification for the structure from the U.S. Green Building Council. Some might think that it would be more difficult for an old building to become certified than a new one, but Jonker said that isn’t the case.

First, he said, the building’s urban location in the Heartside Business District makes walking viable. Several bus stops also are within a short distance of the building. That means energy is being saved by residents. Second, Jonker said the renovation made the structure much more energy efficient.

“When you’re doing a renovation, the energy requirements are somewhat different in that they’re measuring the gain in the existing structure instead of comparing it to some sort of baseline standard that’s just written in a book. In some ways, it’s easy to make dramatic improvements on an existing building,” he said.

“We put in high-efficiency furnaces. We put in tankless hot water heaters. We did a white reflective roof. We used cellulous insulation. We used highly insulated windows and these types of things. There’s nothing hard about it. It’s just a commitment to doing the right thing, and this owner is really committed to that for the long term.”

The payment-in-lieu agreement has Brookstone Capital paying the city a percentage of the total rental income from the apartments instead of property taxes. But the commercial space will be on the property-tax roll.

Fryling Construction is a division of the Wolverine Building Group. Concept Design Studio Inc. was the project’s architect.

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