Construction, Economic Development, and Government

GR building permit volume soars in April

Figure may indicate commercial construction and local economy have rebounded.

May 17, 2013
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GR building permit volume soars in April
Building permits granted by the City of Grand Rapids averaged $3.5 million per day just in the month of April, a four-fold increase over April 2012. Illustration by Thinkstock/Chris Pastotnik

The monetary value of the building permits that were applied for and granted just in Grand Rapids, and only in April, totaled a nearly unbelievable $77 million — a figure that breaks out to a daily average of $3.5 million for each of the month’s 22 business days.

The $77 million was almost four times the value of the permits applied for and granted in April last year.

“It actually was $77 million that were applied for or issued just in the month of April. So that includes both applications submitted in April and permits actually issued in April,” said Lou Canfield, the city’s development center coordinator.

“It’s a good case of increase versus the start of the year and the end of last year. It’s been kind of an upward slope,” he added.

Canfield said the average monthly dollar value from last May through March was a fairly steady $25 million. But in March, the monthly figure jumped to $41 million, and then it leaped again in April to $77 million.

Canfield said he and his crew felt the dramatic hike was partly due to projects now going forward that had been relegated to the drawing board when the construction economy was softer.

“So we think part of what is happening is that there have been projects in the works for a few years and now that people are feeling more confident and financing has become easier, at least for large projects, those things that were planned but stayed on the drawing board are being built,” he said.

The $77 million included residential, commercial and institutional permits, but Canfield said only a few were for housing. The vast majority were for commercial projects, including apartments, and for institutional developments, like the expansion of Mary Free Bed Rehabilitation Hospital and upgrades Grand Rapids Community College is making.

“It’s institutional and commercial taking the lead on this increase, and residential is relatively a small portion,” he said.

Having commercial and institutional projects account for most of the dollar volume of permits isn’t unusual. Almost all carry a higher price tag and are costlier to build than single-family homes. Also, residential neighborhoods in the city are largely built out.

“What really fills our activity here is redevelopment. There isn’t a lot of new housing that’s being developed in Grand Rapids. There is some redevelopment, but it’s mostly the big commercial and institutional areas that drive things,” he said.

“Occasionally, we’ll see a big residential project like we did with the River House condos next to Bridgewater (Place). Now that was a big residential development.”

Canfield noted that most of the housing units being built are part of mixed-use commercial projects such as the one Brookstone Capital has planned for a vacant downtown lot at 240 Ionia Ave. SW. The project has ground-floor retail in its mix with apartments designed for the rest of the building. It’s similar to 616 Development’s plan for its renovation of the Kendall Building at 16 Monroe Center.

Canfield said his department’s goal is to review a project within a week, but with more permits being requested and the same number of staffers in the office, the review period has been extended by about a week.

“That still compares favorably with what the law requires and what other communities are doing, we think — particularly, big communities. But we are planning to add some review capacity — a review person — in the next couple of months, and that should allow us to get closer to the goal that we’ve had,” he said.

The permit parade hasn’t slowed much in May, either. For the first half of May, through the 15th, the dollar value of permits requested and granted was $33 million.

“So we’re not much behind the pace we had last month, in this month,” said Canfield. “It’s really good. It speaks to the strengthening of the local construction environment, specifically, and we hope it speaks to the strengthening of the overall economy here, too.”

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