Closing on new ramp coming up

September 13, 2010
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The city of Grand Rapids and Two West Fulton LLC, the development company that built The Gallery on Fulton, will close this week on the 236-space parking ramp that the developer built and the city’s Parking Services will own and operate.

Parking Services Director Pam Ritsema said the ramp’s price tag came in at slightly over $9 million, nearly $700,000 less than the projected cost.

Initially, the ramp was supposed to have 250 spaces, but Ritsema said the revenue-control equipment for the ramp’s automated entrance-and-exit system had to be pushed deeper into the facility, and that change removed 14 spaces from the original design.

The Grand Rapids Building Authority recently issued bonds on behalf of Parking Services to finance the ramp’s purchase. Instead of issuing standard, tax-free municipal bonds, GRBA chose to go to market with the Recovery Zone Economic Development Bonds that Congress included in the American Recovery and Reinvestment Act. The bonds are taxable, which gives buyers a higher interest rate than tax-exempt securities, and the federal government will pay 45 percent of the city’s interest charge.

Ritsema said the bonds sold quickly and, in fact, buyers had to be turned away. “The bonds were oversubscribed,” she said. The sale netted the city $7.32 million.

The term is for 25 years and the resulting interest rate to the city, after the federal reimbursement, is 3.08 percent.

Two West Fulton is an affiliation between CWD Real Estate Investments, RSC & Associates, and Triangle Associates. The Gallery on Fulton is a mixed-use development at the intersection of Division Avenue and Fulton Street. The building is the future home of the Urban Institute for Contemporary Arts. It also contains 56 apartments on floors 6 through 12. Some tenants have already moved into the building.

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