Brookstone increases investment in project
City’s brownfield authority has had success with EPA grant program.
Brookstone Capital, a Midland-based development firm, is planning to put up a seven-story structure at 240 Ionia Ave. SW that will have 48 apartments, a two-and-a-half-story parking ramp and 4,600 square feet of ground-floor commercial space.
The project has grown by another floor since it was announced last summer when city commissioners approved a payment-in-lieu-of-taxes request for 40 of the apartments that will receive low-income housing credits. Instead of paying property taxes on those units, Brookstone will give the city 4 percent of the total rental revenue.
In addition to a bigger project, Brookstone Capital also will invest another $1.5 million into it. The increase raises the firm’s investment to $15 million from last summer’s $13.5 million. The project will be the eighth Brookstone has built in the city since it developed Metropolitan Park Apartments at 350 Ionia Ave. SW eight years ago.
“We’ll start work in May or June,” said Karl Chew, principal at Brookstone Capital. “We want to continue development in that area. It’s a beautiful site across from Heartside Park. We’ve always kept our eyes on that site since we came to Grand Rapids in 2005.”
The project’s location also is close to the new Downtown Market being built at 435 Ionia Ave. SW near Wealthy Street.
Chew said each floor will have a dozen apartments with a mix of one- and two-bedroom units. The two-bedroom apartments will be about 1,100 square feet, while the single-bedroom units will be 800 square feet. Eight of the apartments will be market-rate units.
Chew said the ground floor will be built out with the intention of leasing the space to a restaurant or tavern.
Progressive AE is the project’s designer, and Wolverine Building Group will manage the construction, which is expected to be finished in summer 2014.
Brookstone Capital is seeking tax-increment financing for some of the eligible brownfield activities, such as an environmental site assessment, site planning and public improvements. The cost for doing all of the activities is estimated at $2.4 million, but the firm will receive only reimbursement payments from the taxes levied on the retail space and a portion of the parking ramp because the project was awarded the PILOT for the apartments.
“It’s not going to receive the full portion,” said Kara Wood, city economic development director and executive of the brownfield authority.
The amended brownfield plan will go to the City Commission for its approval and the change in the building plan will go back to the city’s Planning Commission for its ratification.
Brookstone Capital is the second development firm that has wanted to build on the site in recent years. In 2006, Fulton and Division LLC got approval to build a 10-story mixed use structure there, but the project never went forward.
“The previous project did not take place and we terminated that agreement (in 2011) with Fulton and Division,” said Wood.
Chew said his firm bought the property last summer.
In related news, the authority approved 25 brownfield projects in the city from 2010 through last year. About $227 million in investments have been committed to the projects, with $77.4 million having been spent so far. The state’s incentive has totaled $32.6 million.
“In most cases, I think it has been in grants,” said Jonathan Klooster of the city’s Economic Development Department.
More than 1,000 jobs are expected to be created from that investment. Nine of the 26 projects have been completed and nine more are under construction.
In addition, the brownfield authority has 31 projects that have recently received $300,000 in grants from the U.S. Environmental Protection Agency. Those grant dollars have helped to secure $61.4 million in private investment for the projects, which will develop 62.6 acres in the city.
“These are good results,” said Klooster of the latest list.
“Yes, that is a big bang for the buck,” said Terry Nicholas, chairman of the brownfield authority.
Over the long term, Wood said the results have been very good for redevelopment in the city. “We can show that 500 acres have been put back into use because of this program,” she said.