Grand Rapids approves pair of brownfield projects
Grand Rapids city commissioners approved two brownfield requests last week and set public hearing dates for two more next week.
One of the approved requests came from 38 Front Redevelopment LLC, which is Grand Valley State University’s for-profit, tax-paying entity for the project. The university plans to build a $40 million structure along the west bank of the Grand River at 38 Front Ave. NW for the Seidman College of Business and a number of business and community services.
The approved brownfield will allow GVSU’s LLC to collect up to $9.8 million in tax reimbursements for such qualified activities as assessing the environmental condition of the property, preparing the site for construction and demolishing an existing building. The development firm also will apply for Michigan Business Tax credits, which could be worth up to 20 percent of the university’s investment in the project, or $8 million. No taxes are being abated.
“The project will remove an old building, will provide community outreach, conferencing, executive level training and various other services to local and state businesses, and will create new jobs,” said Kara Wood, city economic development director.
According to an estimate from the city’s Economic Development office, the school’s for-profit entity will pay roughly $950,000 a year in state and city taxes or about $6.6 million over seven years. 38 Front Redevelopment LLC is expected to exist for seven years before the university takes over the site and converts it into a tax-exempt property. The city stands to gain $172,000 a year in property-tax revenue from the completed project over the seven years, and $84,000 annually in income taxes from the 160 jobs that are expected to be created through the project.
Demolition and site-preparation work could begin as early as next month. The project is expected to be finished by 2014. GVSU bought the property in July from Ed De Vries Properties for $4.42 million.
The other approved request was for the new City Flats Hotel that will be built at 83 Monroe Center, the former home of Fox Jewelers. Charter House, which owns the City Flats Hotel in Holland, is also doing the project here. The firm is investing $3.4 million into the boutique hotel that will have 28 rooms and a restaurant, be LEED certified and create at least 17 new jobs.
“This project will reuse this old, functionally obsolete building and provide additional hotel and restaurant space in the immediate downtown area,” said Wood. “The project will create permanent jobs as well as a significant number of construction jobs.”
Charter House will apply for a state tax credit, with the amount to be determined. The Downtown Development Authority has already awarded the project a $75,000 building reuse grant and given the company the right to collect $180,000 in tax reimbursements for making the proposed hotel fully accessible. Construction could begin as early as next month and be completed by December 2011.
The Michigan Economic Growth Authority still has to approve the 38 Front and Charter House applications.
City commissioners will hold public hearings on two more requests Sept. 28. One comes from the Gilmore Collection for the expansion of The BOB at 20 Monroe Ave. NW. Doing the project as the 20 Monroe Building Co. LP, Gilmore Collection CEO Gregory Gilmore and his partners want to put up a new, four-story, mixed-use building on the parking lot near The BOB. They plan to invest about $24 million into the project.
“The building will include a variety of uses, including the manufacturing of packaged food, retail, entertainment, hotel condo suites, etc. This project, known as Bobville, will reuse this contaminated site adjacent to The BOB in downtown Grand Rapids. The project will create approximately 150 new permanent jobs,” said Wood.
The second public hearing next week will be held for Health Park Central LLC, which wants to build a new three-story office structure adjacent to an existing medical office building at 245 Cherry St. SE. The firm is investing more than $15 million into the project.
“The project will provide renovated medical office space as well as new, additional office space. This project will reuse this contaminated site and renovate an existing building in the downtown area. The project will create 37 new permanent jobs,” said Wood.
If all four brownfield requests are approved, about $82.4 million will be invested in the downtown district and 364 new jobs will be created from that investment once the projects are completed.