It takes a village — five years to get started on East Beltline

December 24, 2009
| By Pete Daly |
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After five years and many hours of meetings with Grand Rapids city planners — and despite a near-frozen financial market — phase one of the Village at Knapp's Crossing lifestyle center is finally under construction on the East Beltline.

Going up quickly now on the northeast corner of the East Beltline Avenue and Knapp Street intersection is a new 50,000-square-foot D&W Fresh Market, along with the infrastructure for the 300,000-square-foot development by Evergreen Properties of Michigan.

Phase one is being done by Lamar Construction. The upscale "lifestyle" infrastructure includes a simulated main street (with parking) in the middle of the development, with adjoining brick sidewalks, landscaping and lighting, plus storm drains and utilities.

The D&W store is being built by its corporate parent Spartan Stores on a site Spartan purchased from the developer in order to get the project moving, according to Spartan spokesperson Jeanne Norcross. Spartan had hoped to start building the D&W at least a year ago; now it is set to open in spring 2010.

"We've been working on this quite some time," said Norcross. "There were a lot of issues that needed to be addressed through the property owner, Evergreen Properties — various zoning requirements and issues. We would have liked to build it sooner, but we're very pleased" that construction has begun, she said.

"It's a growing area and we just feel it's an excellent location."

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Artist’s renderings of the new 50,000-square-foot D&W Fresh Market on the East Beltline Avenue and Knapp Street intersection. Courtesy Spartan Stores Inc.

The developer, Steven Benner of Evergreen Properties of Michigan, said construction will begin early next year on a P.F. Chang's China Bistro restaurant, which should open in late 2010. P.F. Chang's is a chain of upscale casual dining restaurants; this will be the first one in West Michigan.

"We're working on a lot of other tenants but we don't have any others signed as of yet," said Benner. "We're working on it and we're getting close."

Benner said the first phase of development is on his property that is within the city of Grand Rapids. Phase one will represent a total investment of about $40 million. Benner also has adjoining acreage to the north that is in Grand Rapids Township; he said he intends to develop that later as an addition to The Village at Knapp's Crossing. He said the entire development will ultimately represent an investment of about $80 million or more.

"We're going to fill up the city (of Grand Rapids) portion first, and then we'll move on to the township (acreage)," he said.

However, Grand Rapids Township planning director Rick Sprague said he believes that area is zoned Single Family Residential, which means it would have to be rezoned before Benner could proceed.

Zoning issues were the first big hurdle Benner had to overcome when his proposed development came before the Grand Rapids planning commission in the fall of 2004.

"The beginning was rough because he had come in for a rezoning request," said Grand Rapids planning director Suzanne Schulz. But Benner's plan did not match what the city wanted to see in that area and was denied, she said.

"There were a number of different issues associated with the constraints on site and a master plan issue," said Schulz. The constraints involved "extreme topography" she said, including variations in elevation and drainage issues that also involved the county.

Benner appealed to the zoning board of appeals and won a variance to proceed.

When asked what took so long before construction finally started, Schulz noted that "Mr. Benner went through five designers." She said that after Benner had board approval to proceed, "he changed his plans several times, to a project that did not match what the board had approved. He sought multiple revisions."

Then, she said, he requested permission to develop the project in phases, due to funding constraints. "Because of his funding constraints and his desire to change the project after approval, that dragged it on longer than we would ordinarily expect to see," she said.

Benner told the Business Journal that financing constraints did slow down the project "tremendously."

"It continues to slow us, so we are looking for a joint venture partner in the project to speed things up," he said.

Carl Blauwkamp, president and CEO of Lamar Construction, said that some of his company's principals have invested in The Village at Knapp's Crossing, although he stressed that the Lamar corporation itself is not an investor.

"We're a small investor," said Blauwkamp, but he noted other private parties have made "significant" investments in the development.

"Banks just wouldn't touch it, conventionally," said Blauwkamp, adding that Benner said numerous times that he went to 80 different banks or financial institutions, trying to get the deal done.

Blauwkamp said that he would have preferred not to have invested anything. “We would just build it. We're not developers."

Blauwkamp said Lamar got involved with the project early this year and it took several months to work out a deal with Evergreen Properties, which, he said, should have taken 30 to 60 days max.

When Benner began his project, he hired JPRA Architects of Farmington Hills, which had designed a number of lifestyle centers throughout the United States, including The Village of Rochester Hills for developer Robert B. Aikens & Associates Inc. in Birmingham.

Aikens & Associates also owns commercial real estate on East Beltline and 3 Mile Road in Grand Rapid Township — one mile north of Knapp's Corner. The Aikens & Associates Web site lists the Village of Orchard Hills as “under development” in "affluent Grand Rapids Township, Michigan." It’s described as a 400,000-square-foot, mixed-use lifestyle center with “50 top retailers and restaurants” and 70 housing units.

Sprague said Aikens & Associates received township approval a year or more ago to build the Village of Orchard Hills development "but haven't moved forward."

Aikens & Associates did not return a call from the Business Journal.

Benner said the proposed Village of Orchard Hills development that threatens to compete with him has actually helped his project by bringing potential tenants in to look at the East Beltline area in northeast Grand Rapids.

"I think we are, by far, the better site versus 3 Mile," said Benner. He noted the presence of the Knapp's Corners Meijer store, Celebration Cinema, and other commercial development at the intersection.

"People are coming to that corner for a reason, where at 3 Mile, they're not."

As for the new D&W Fresh Market competing with the Meijer store across the Beltline, Norcross said Meijer’s is "an excellent operator of their large store format, which is both general merchandise and food. Our stores are really that conventional supermarket model: We offer them as an alternative to supercenters."

"Certain shoppers may prefer a supercenter to do their grocery shopping, but many prefer the conventional supermarket," added Norcross. "So we believe this gives the consumers, particularly in this market where there is an existing Meijer, a choice."

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