Commissioners put key parcel up for sale
Grand Rapids city commissioners decided last week to put a prime piece of downtown real estate across from Van Andel Arena on the market. There is plenty of parking available for a development on the parcel, as the city-owned site is adjacent to the Ottawa Fulton parking ramp. The site’s sale price is still to be determined, though.
“We have an idea of what the property is worth and we want to confirm that with an appraisal,” said Deputy City Manager Eric DeLong.
DeLong said the city is hoping an experienced mixed-use developer is interested in buying the property at the northwest corner of Ionia Avenue and Fulton Street and possibly putting up an office building that would draw new tenants to the city, along with some retail space. The price for the property and its air rights will be determined by an appraisal that the city will retain and has to be completed at least 45 days before a purchase date. The site will be listed for 60 days with the Grand Rapids Association of Realtors Multiple Listing Service.
DeLong also said the city is willing to offer an interested party a three-year option on the site. The price tag for the option has been tentatively set at $10,000 for the first year and $15,000 each for years two and three. But Mayor George Heartwell and Commissioner James White felt the option price for the last two years should be higher.
“In that second year, I’d get a little antsy and would want to push that up,” said White. The city is willing to offer a credit on the option price if its cost to provide the option and prepare the site for disposal is less than the option fee.
A buyer would have to sign a development agreement with the city — a standard procedure for city-owned property. The city’s proposed agreement with a developer calls for a minimum investment of $15 million and a project that delivers 75,000 square feet of new space.
DeLong said a developer could put up a “liner” building on the site, as Locus Development did last year a few blocks south, and have the structure connected to the parking ramp.
The city would convey the property by a quit-claim deed and deliver the owner’s policy of title insurance at its cost. A signed option would not allow the property to be flipped.
The city’s Economic Development office will review any proposals submitted for the site and take those to the Economic Development Project Team for its input. Commissioners would have the final say on a potential sales agreement.
Revenue from a sale would go to Parking Services, which owns the site, not to the city’s general fund. The department has 17 parking meters on the property that nets it about $7,000 a year in revenue. But Commissioner Rosalynn Bliss pointed out that the general fund would collect the income taxes from those who would work in the new building, and if new tenants are drawn to it, some or possibly all of that revenue would be new to the city.
“This would provide a triangular piece of property for development,” said DeLong.
“It could be a pretty significant development in the core of the city,” added Commissioner Walt Gutowski.