Economic Development, Government, and Real Estate

City sets project list for future potential development

Commissioners also award local manufacturer tax breaks for large investment.

October 27, 2012
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The reconstruction of Godfrey Avenue from the city’s south limits to Market Avenue was one of four projects Grand Rapids city commissioners agreed to put on a list last week for potential federal funding under a recently formed regional economic development initiative. The action was largely a formality for now, but the move could pay off in a big way in the future for the city’s development.

The city joined the West Michigan Economic Partnership, a coalition of municipalities in Kent and Muskegon counties, as well as both respective county units, in March. WMEP was formed by The Right Place Inc. and Muskegon Area First, nonprofit economic development organizations, to upgrade underdeveloped sectors in the counties that are served by at least two modes of transportation.

Although funding for the projects won’t be sought now or in the near future, the city’s proposals would go to the U.S. Economic Development Administration for any future funding.

The EDA uses six criteria to evaluate funding requests, two of which are the amount of collaboration a project has among regions and whether public-private partnerships are part of an effort. The agency also favors projects that are economically sustainable. In turn, the EDA awards grants and makes loans for approved projects.

City Economic Development Director Kara Wood submitted the four to commissioners last week as part of the city’s involvement in WMEP, which requires each governmental unit to compile a list.

The cost of the four projects totals $48.45 million. Wood said the city couldn’t ask for the entire amount from the EDA because the federal agency requires an applicant to provide a match for any funds it allocates, and the city doesn’t have money for a match now.

“We are simply including the projects for future consideration should we get the match to make an EDA request,” she told the Business Journal.

As for the Godfrey Avenue project, Wood said the corridor plays a “critical role” in providing access to a major industrial area in the city and for receiving goods and services. Besides rebuilding Godfrey, the work would replace watermains, streetlights, and storm and sanitary sewers, plus add bike lanes to the street.

Another project involves the city buying and converting a 100-foot-wide strip of a five-mile railroad corridor that runs alongside the Michigan Street life sciences sector to East Beltline Avenue. Should it go forward, the city would build a 50-foot-wide multimodal street on the corridor that would relieve the traffic congestion currently plaguing the sector, which includes a large residential section with 7,800 homes and apartments.

Wood said the Grand Rapids-Eastern Railroad continues to service customers in the area, but does so infrequently.

“The funding would allow the acquisition of the underlying property and may include a leaseback to the railroad for the near term,” she wrote in her proposal to commissioners.

The third project is to lengthen Seward Avenue from Wealthy Street to Butterworth Avenue on the city’s southwest side. Wood said doing so would improve access to industrial areas and divert traffic away from the nearby residential neighborhoods. It would also create a link to U.S. 131 at Wealthy.

The work would have the city buy an 85-foot-wide right-of-way along the stretch, install new street infrastructure and add street lighting and bike lanes. Wood expects a completed project would continue to “leverage substantial private investment” and result in more jobs.

The city sees Seward Avenue as a primary thoroughfare for the future. The plan is to someday extend Seward north to Richmond Street, then on to Ann Street and possibly to West River Drive. Stretching Seward that far would give motorists an alternative to U.S. 131.

The fourth involves conducting a feasibility study for the city’s SmartZone, the high-tech and medical research district that exists on Michigan Street and in the Monroe North Business District, which is adjacent to downtown and within blocks of the Medical Mile.

The study would determine the business capacity for the zone, its potential parking demand and overall transportation flow. Wood said the city is working with the sector’s occupants to develop more medical-research incubators in Monroe North, and the project includes acquiring land for that future expansion.

All four proposals are in areas that include railroad lines and vehicle traffic, which means each has two modes of transportation.

In addition to ratifying those projects, commissioners gave Benteler Automotive, 320 Hall St. SW, two industrial tax exemptions last week. The manufacturer is investing $7.3 million into new equipment and machinery for its military defense and automotive product lines over the next two years, just after spending $5.5 million on machinery for its defense business.

“Their main products have historically been tubular door beams and bumpers. However, the company has been diversifying its customer base,” said Wood. “Every time Benteler makes an investment here, we’re competing with Goshen, Ind. (where the firm has a second plant).”

Wood said one tax break is for five years because Benteler may discontinue or relocate some work for Ford and Nissan after that timeframe, while the other exemption is for the full 12-year period.

The company is expected to save an average of $38,500 in state and city taxes annually during the abatement’s duration. Benteler employs 205 workers and expects to add another dozen employees from its investment. The city stands to gain $15,500 in new income-tax revenue from the new jobs.

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