Real estate highlights found amid tough times
There are few things in this world to make happy talk among commercial and industrial real estate professionals in the state of Michigan, but the group’s annual state conference sponsored by the University of Michigan and Urban Land Institute last week was upbeat if for no other reason than the election of Rick Snyder as governor. (See more commentary below.)
The UM-ULI conference, held in 2008 in Grand Rapids, will come back to GR in 2012, but not before UM-ULI celebrates its 25th anniversary in the city of its birth — Detroit — Nov. 9-10, 2011. The return to GR may be due in part to The Right Place Inc. Urban Development specialist Rick Chapla, who is relentless in his pursuit of having the conference here, and because the UM-ULI planning committee and attendees two years ago were “impressed enough with the city to want to come back.”
Grand Rapids Business Journal was a conference sponsor and, with Crain’s Detroit Business, presented commercial real estate awards judged by an independent panel from 30 nominations from East and West Michigan.
The Development of the Year Award West Michigan was accepted by Mark Hesemann of Evergreen Development for the Harbor Shores Community Redevelopment project in Benton Harbor. David Distel of O’Keefe & Associates accepted the award for the Sale of the Year in West Michigan, for its work to secure new investors for the Double JJ Ranch (and venue for the Rothbury Festival) amid the most horrendous impacts of the Great Recession. The degree of difficulty included the time at which the FDIC began controlling the operations of two banks providing buyer financing, a significant closing delay and near collapse of the deal as the buyers dropped out. O’Keefe secured new investors and the FDIC approved the sale one week before the Rothbury Festival.
Jonathon Bradford, CEO of Inner City Christian Federation, received the highest honor, the Real Estate Excellence Award — West Michigan, for lifetime achievement. Bradford could not attend, giving his time instead to a “reinvention” summit called by the Michigan State Housing Development Authority, as one of six individuals in Michigan from the nonprofit sector. Most conference attendees were only too happy to learn such a summit was taking place.
In a rather extraordinary turn of events, the UM-ULI leaders voted to come to Grand Rapids to witness the Business Journal’s award to Bradford, post summit.
Ghosts of 28th Street
In the background of the tragic decline of business vitality on 28th Street in Wyoming is the ghost of the development that never was.
Almost three years ago, when Bob Israels was looking for a home for his Klingman's furniture showroom, he hired a consulting firm to study the then-vacant Rogers Department Store on 28th Street. The consultant concluded it was a good idea, but mentioned the need for high-quality senior housing — independent living — in Wyoming.
That led Israels and his son David Israels to begin working on plans for a nonprofit senior housing complex that might have ended up being an investment of as much as $85 million, with funding that would hopefully be provided by a federal HUD 202 grant. Tentative plans called for three six-story buildings, and architectural and engineering firms were identified.
In conversation with the Business Journal last week about Turn on 28th Street — a push to revitalize the area — Wyoming Mayor Jack Poll was asked about that proposal for senior housing.
“Never happened,” said Poll. Yes, he added, it had been “part of Bob’s plan for the area — but the economy certainly took a toll.”
Israels could not be reached for comment.
28th Street and GM
Todd Wenzel and the beautiful Mrs. Wenzel threw quite the party Nov. 11 to mark the grand opening of a renovated 28th Street GM dealership, as well as renovations at the Hudsonville location, all totaling just under $2.5 million. GM dealer reps turned out and heard Wenzel relive the agony of moving forward with the plans that also updated 100 percent of the technology at the dealership, including customer lounges with Wi Fi, even as the economic collapse began and the future of GM was anything but certain.
Wenzel’s customer lounges include a play area for children and a food court offering anything from doughnuts and fruit in the morning to afternoon hot and cold sandwiches.
But there is more that distinguishes Wenzel’s customer service from the rest. He has created space for a salon, where customers may receive services such as manicures or haircuts. Wenzel said he is negotiating with such service providers and hopes to have the salon area open early next year. “This is not a profit center, it is a customer service, so we’re opening it for customers only, and rates will be discounted,” said Wenzel spokesperson Mary Seeger.
A lame stuck approach
Becky Bechler, an associate with Kent County’s lobbying firm Public Affairs Associates, said quite a bit of activity was going on in the state capital — but very little had anything to do with actual legislation. With the Republican landslide in the recent election, Bechler said GOP lawmakers were spending much of their time reorganizing and getting their ducks in a row for the next session in January.
That means there is little to fear about an overactive lame-duck session that passes hundreds of laws in a rapid-fire flurry of yeas. So forget a new bridge to Canada, a new gas tax, or anything else new and even remotely controversial.
“You may see a few minor bills pass through, but you’re unlikely to see anything passed after Dec. 2,” she told members of the county’s Legislative Committee last week. “The governor-elect (Rick Snyder) announced he wants to be ready to go on Jan. 3. As for any lame-duck session, that is falling apart rather quickly.”
Bechler said voters sent a record number of new faces to the state House, marking the biggest bunch of newcomers since 1966. Sixty freshmen, of whom 39 are Republicans, will open the new session, and when it does open, 96 representatives will have two years or less experience in the chamber. As for the state Senate, she said there will be so many Republicans in that chamber that they could amend the Constitution without even speaking to a Democrat.
Bechler also said that Snyder may have to cut the current budget by executive order and will get an additional month to present next year’s annual operating budget because he is new, too. And keep in mind that up to 40 percent of state representatives are considered to be more conservative than the former Gateway executive.
“There will be some significant financial problems he will have to deal with right out of the box,” said Bechler.
County Commissioner Stan Ponstein asked Bechler what role the Michigan Economic Development Corp. will play in the Snyder administration and she said she wasn’t certain. It’s common knowledge the governor-elect isn’t a big fan of tax credits, the MEDC’s biggest tool in its tool box, and he wants to abolish the Michigan Business Tax, which is the source of those credits. “There is some concern about the strength of the MEDC,” she said. “That still has to play out.”
Speculation ran high among the UM-ULI attendees, too. The commercial real estate group openly talked about how Snyder transition team member and former head of the MEDC Doug Rothwell would design the agency, and those currently inside it expect it will no longer be treated as a “semi arm” of state government.