Four projects seek stimulus bond funds in Ottawa County

December 21, 2009
| By Pete Daly |
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Four private business projects in Ottawa County are competing for financing assistance from the federal American Recovery and Reinvestment Act — backed by "stimulus" funds from Washington — with the county board of commissioners deciding who gets what in January.

It's boiling down to a contest of sorts between Grand Haven — a Lake Michigan resort town — and Coopersville, a small town in northeast Ottawa County that has an economy based largely on surrounding agriculture and small business.

The four projects together are requesting a total of well over $50 million in ARRA bonds, while Ottawa County has been allocated only $31 million in ARRA Recovery Zone Facility Bonds. ARRA Recovery Zone Facility Bonds are intended to help support private development projects that generate jobs and stimulate the local economy. They offer tax advantages to lenders — incentives that theoretically should stimulate loans to the bond holders at lower interest rates.

The two large project proposals are the $100 million powdered milk processing plant that Continental Diary Products Inc. plans to build in the former Delphi automotive parts plant in Coopersville, and the $22 million Hilton Garden Inn & Conference Center that Grand Landing LLC and its partner want to build in Grand Haven near the Grand River.

Another project located in Grand Haven is a proposed $9 million investment by Beechtree Leasing LLC, which owns seven acres of former industrial land on which sits the long-closed factory once occupied by Challenge Machinery. Capstone Real Estate of Grand Haven, which is assisting Beechtree in its development plans, advised Ottawa County officials that the Beechtree request for $9 million in ARRA bonds will result in a 140,000-square-foot mixed-use complex that will house a manufacturer, a local packaging company, several post-secondary educational institutions and one or more office users. According to Greg Oleszczuk of Beechtree, the development will create about 50 jobs.

The fourth applicant is Sundance Capital Group LLC of Spring Lake, led by Michael J. Bowen, which is proposing to build a "medical/rehab campus" called Alden Place at a "failed residential development" at Lillybell Court and Rachels Way in Spring Lake. Described in its application as a recovery treatment center, the project would mean a total investment of $1.75 million and would create about 21 jobs. Sundance Capital is requesting ARRA bonds covering 75 percent of the cost, or about $1.3 million.

Ottawa County officials recently created a scoring system to help determine which private projects should qualify for an ARRA bond. According to Mark Knudsen, director of Ottawa County Planning and Grants, the scoring system includes factors such as the number of jobs that would be created, the average starting wage and "the proposed product or service."

"Obviously, the key is job creation. I think, for us, another consideration is the amount of tax base it creates," said Knudsen.

According to Knudsen, the highest scored product or service is technology and research, followed in descending order by food processing/manufacturing, alternative energy manufacturing, general manufacturing, and service/tourism/hospitality.

Knudsen said food processing is ranked second in importance because "we have such a strong agricultural sector here." Ottawa County is "one of the largest agricultural producers (among all counties in Michigan). It makes sense to support food processing."

Grand Haven has already offered significant local government support to the Grand Landing hotel/conference center project, as has the city of Coopersville for the powdered milk plant there.

Phase one of the Grand Landing development on a once-blighted former industrial site just off U.S. 31 began a couple of years ago and now has completed retail spaces and condos. The proposed hotel/conference is a major second phase, but it was apparently stalled by the onset of the recession.

Grand Landing LLC, led by Craig Adams, began a partnership a year ago with Legacy Hospitality LLC of Avila Beach, Calif., which will operate the Hilton Garden Inn and Conference Center. The Grand Haven project will be a 125-room hotel with attached ballroom, meeting and conference center, employing about 75 people. The developers are requesting $22 million in ARRA bonds.

"The city council is really explicit" in its support of the Grand Landing hotel/conference center project, said Grand Haven City Manager Pat McGinnis, adding that it has "passed a formal resolution supporting" the developers' request for ARRA bonds.

"We recognize we have a second project that has come up within the city limits. It looks like a very nice project, as well; however, the city council has not had a chance to review that project or provide any input (to county officials) in regard to that project," said McGinnis.

While they don't intend to lobby the county government, McGinnis said Grand Haven city officials "will be present at any committee meetings or any (county) board meetings where this is discussed, just to answer questions and to demonstrate our abiding interest in getting this approved. We really believe ours is a worthwhile (project), and we think it will bring great investment in many other areas along the lakeshore here. It's just the beginning of what could be a significant comeback" in the Grand Haven area.

"We wouldn't have applied for it if it wasn't a fantastic project, and we do believe we can put these dollars to work immediately," added McGinnis. "We've got city dollars sitting on the sideline waiting to go for infrastructure (at the Grand Landing site) once we get a green light."

He said the city has "several million" for municipal infrastructure, which could be put to work while ARRA-supported bonds are sold by the developers.

"That's money in the bank, quite literally," he said.

"Talk about putting people to work right now — we're a project that can do that," said McGinnis.

The closing of the Delphi plant in Coopersville about three years ago, with the resulting loss of several hundred jobs, was a significant blow to northeast Ottawa County. About a year ago, the empty plant was bought by Arizona Maricopa Associates LLC, of San Marcos, Calif., according to the Coopersville tax assessment office. News reports at the time identified Arie de Jong as a principal of the company. De Jong also owns Hollandia Dairy, which has been in business for about 60 years and serves customers in southern California. De Jong is related to Tim den Dulk of Ravenna, who has one of the largest dairy farming operations in Michigan. Den Dulk is listed on state records as the "resident agent" representing Continental Dairy Products.

In October, the Michigan Economic Growth Authority approved a state tax credit valued at $1.5 million over 10 years, "to help win (Continental Dairy Products’) investment" in Coopersville "over competing sites in Indiana and Ohio," according to documents provided by Bridget Beckman of the Michigan Economic Development Corp.

According to the application from Continental Dairy for ARRA bonds, it is a "Midwestern dairy farming cooperative comprised of 25 dairy farms with approximately 57,000 milking cows," producing 1.5 billion pounds of milk annually.

In October, the city of Coopersville requested $2.4 million in Community Development Block Grant funds from the state of Michigan to expand the city wastewater treatment plant to handle effluent expected from the powdered milk processing plant.

Mayor Ken Bush of Coopersville said the city is "very excited" about Continental Dairy making use of the vacant automotive parts plant.

Coopersville City Manager Steve Patrick said he has been advised by Steve Cooper, representing the powdered milk plant investors, that interior reconstruction of part of the plant will begin in the spring.

Ken Rizzio, executive director of the Ottawa County Economic Development Office, said he has done extensive work in support of the Continental Dairy project.

"We're excited about that," he said, adding that Continental has "asked for the whole allocation" of ARRA bonds for Ottawa County — all $31 million worth.

"I don't know if the county board will do that, or if they're going to spread it out among projects," said Rizzio.

"One thing that is important: This is an agricultural industry project. Besides the 70 direct jobs (stated in the ARRA application), there's a multiplier" effect, said Rizzio, which he estimates will generate an additional 440 or so spin-off jobs involving vendors and suppliers.

He said the generally accepted multiplier effect for manufacturing jobs is about 2.5, but agri-business has a multiplier of more than seven.

"I would hope that would be an important consideration" in determining how Ottawa County's ARRA bonds are allocated, said Rizzio.

Rizzio said Continental Dairy has already taken delivery of "several large pieces of equipment" for producing milk powder. "All indications are (that) they are looking to start (construction) April 1, 2010."

Mark Knudsen of Ottawa County Planning and Grants, who has been heavily involved in preparation of the county board's use of the ARRA bonds, said he does not know how the county board will allocate the bonds.

"Obviously, there isn't enough money to fund all of the projects," said Knudsen.

Because of that, his department has sent follow-up letters to the four applicants, asking whether, if they only got a portion of their requested ARRA bonds, "could they utilize that. We'll be getting answers back on that."

Knudsen added: "If each of the projects is dependent on (receiving) the full amount, obviously, there are going to be some that aren't going to be approved."

Knudsen said the schedule now calls for the county board to study the applications in a work session Jan. 12, with a final decision set for its meeting Jan. 26.

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