- change ups
Downtown brownfields addressed
Grand Valley State University wants to build a new five- to six-story structure with 110,000 square feet of space for its Seidman College of Business, some regional economic development agencies, some small- business services, and up to 10 apartments at 38 Front Ave. SW. The site, which is along the east bank of the Grand River just south of Fulton Street, is a 75,000-square-foot parcel that GVSU bought from Ed De Vries Properties last month for $4.4 million.
The university will demolish the old A&P Warehouse that currently occupies the site to make room for the building that will be dedicated to L. William Seidman, a city native who headed the Federal Deposit Insurance Corp. and served as a financial commentator for CNBC. Mr. Seidman passed away last year.
To qualify for brownfield tax credits, the university created a nonprofit corporation called 38 Front Avenue in February. Then the school established a for-profit development company called 38 Front Redevelopment LLC for the project, a move GVSU needed to make in order to pay taxes and be eligible to receive tax reimbursements for its investment in the construction project.
The Grand Rapids Brownfield Redevelopment Authority said the project qualifies for reimbursement, and the university is seeking nearly $8.3 million in tax credits from the state’s brownfield program. GVSU also is expected to apply for New Market tax credits, a federal program that can be worth up to 39 percent of a qualified investment. If the entire $40 million qualifies, the credit could be $15.6 million.
38 Front Redevelopment is expected to keep the site on the tax roll for seven years, the normal period of time it takes to collect the credits. Then GVSU will take possession of the property and it will come off the tax list.
According to the city’s Economic Development office, 38 Front Redevelopment will pay about $950,000 a year in state and city taxes, or $6.6 million over the course of seven years. None of those tax dollars will be abated. The city is likely to receive $172,000 a year in property taxes from the development and another $84,000 a year in income taxes from the 160 jobs the project is expected to create.
“It’s starting to push development south along the river,” said Deputy City Manager Eric DeLong of the proposed project.
“They’re working with our Green Grand Rapids plan for their development,” said Kara Wood, city economic development director, who added that the project should become a catalyst for future development in the sector.
Before buying the property, the university filed an eminent-domain lawsuit against De Vries Properties to take possession of the parcel. In the suit, GVSU offered $2.3 million for the site — roughly half of what it ended up paying for it.
Commissioners also will hold hearings on The Pyramid Scheme nightclub planned for 68 Commerce Ave. SW and the City Flats Hotel proposed for 83 Monroe Center, the former Fox Jewelers building. Both are renovations of vacant structures.
Developers of The Pyramid Scheme, which includes Mark Sellers of HopCat, are investing $1 million into the project that is expected to renovate 6,700 square feet of space into a bar, restaurant and music spot. 68 Commerce LLC is also expected to create 30 new jobs through the nightclub. “It’s good to see that development on Commerce,” said 2nd Ward Commissioner Rosalynn Bliss.
City Flats Grand Rapids RE plans to invest $3.4 million into a boutique hotel with a restaurant and retail space in the five-story building. The project will have 28 rooms, be LEED certified, and add about 20 new jobs. The project is being done by Charter House, the same group that owns the City Flats Hotel in Holland. “It’s about a $4 million project and it’s a significant investment for Monroe Center,” said Wood.
The Downtown Development Authority awarded City Flats Grand Rapids RE a $75,000 building reuse grant last week for the renovation and also gave Charter House the right to collect $180,000 in tax-increment revenue for making the building fully accessible. The DDA awarded a $50,000 grant to 68 Commerce LLC last month.
The amount of brownfield tax credits for The Pyramid Scheme and the boutique hotel haven’t been determined yet. Commissioners will hold the public hearings Aug. 24 after 7 p.m. The Michigan Economic Growth Authority will have the final say on all three brownfield applications.