DDA has a record-breaking $5 million day
Board shows strong financial support for a bevy of downtown developments.
Last February, the Grand Rapids Downtown Development Authority pulled an item from its agenda that was requested by 55 Ionia Partners LLC for its proposed historic renovation of the 91-year-old Morton House on the northwest corner of Monroe Center and Ionia Avenue NW.
Last week, the DDA not only agreed to award the partners the reimbursement they sought six months ago but multiplied it. Instead of the $317,000 requested over 10 years as an obsolete property tax exemption, the DDA raised its award to $1.5 million for all the project’s eligible costs that meet its development support policy. The cash is expected to come from future tax revenue the project will generate.
Then the DDA also threw in a $50,000 building reuse grant, a $35,000 areaway fill grant and a $35,000 streetscape improvement grant for good measure. So the total support from the DDA for the project topped $1.65 million.
Rockford Construction and the RDV Corp. are 55 Ionia Partners LLC, which bought the vacant, 13-story, 170,000-square-foot structure a little more than two years ago. The partners plan to invest about $21 million into creating 100 market-rate apartments on a dozen of the floors and some retail space on the ground floor. The building has been vacant since 2011.
But the board easily beat the amount it awarded 55 Ionia Partners by approving up to a $3.2 million reimbursement request over 15 years for Orion Construction’s new $30 million development called Arena Place. The project will go up on the Area 1 parking lot at Ottawa Avenue and Weston Street. The DDA sold the lot to the firm for a reported $1.9 million.
Arena Place consists of 40,000 square feet of office space, 76 market-rate apartments, 10,000 square feet of ground-floor retail space, and 150 parking spaces in a one-level underground ramp and a surface lot. Construction has been projected to begin in December. Tenants have already committed to it.
The DDA also awarded CWD Real Estate Investment up to $321,500 for the improvements it plans to make to the Trust Building on the southeast corner of Pearl Street and Ottawa Avenue NW. The work will involve restoring the façade, modernizing the lobby and upgrading the offices in the 10-story, 121-year-old structure that was the city’s first skyscraper when it opened in 1892. Today, it is the city’s 13th tallest building, according to emporis.com.
CWD bought the Trust last December for an undisclosed amount after it had gone into foreclosure. The firm is doing business as 40 Pearl Street LLC for the project.
The DDA awarded the project a $50,000 building reuse grant, a $35,000 areaway grant, and up to $236,500 in development support as a reimbursement for the streetscape improvements that will be made. The work will replace the sidewalks and the areaways. CWD is investing $2.6 million into the project; 25 new jobs are expected to be created through it.
Brookstone Capital will get $300,000 in tax reimbursement support from the DDA for its $40 million proposed mixed-use development at 20 E. Fulton St. and Sheldon Avenue NE. The Midland-based firm plans to develop a 14-story building with 108 apartments, about 9,000 square feet of ground-floor retail space and a five-story parking structure with 180 spaces. Half the residential units will be market rate and half will be affordable.
The DDA reimbursement will be made over 10 years and is part of the board’s development policy. Much of the reimbursement is expected to come from the tax revenue generated by the market-rate apartments and retail space in the project.
The DDA also awarded a second building reuse grant of $25,000 for the ADA improvements Midtown Investment Trust will make to the second floor of 141 Ionia Ave. NW. The board approved the first grant in January 2012 for similar work to the building’s ground-floor. First National Bank of Michigan now occupies that space.
The DDA also gave LVD Stolpe LLC a $30,472 building reuse grant for its planned renovation of the former Horseshoe Bar at 333 Grandville Ave. SW.
When the awarding ended, the DDA had handed out more than $5.5 million in grants and development support to the six projects — a record total for a single meeting.
“It required some amount of creativity to provide this optimum level of support,” said DDA Chairman Brian Harris.
DDA Executive Director Kristopher Larson said the award to Arena Place went above and beyond the board’s guidelines by consenting to a 15-year reimbursement, when the development policy adopted in 2006 limits such action to 10 years.
Larson also said the DDA has to “bend the rules” on occasion to close a funding gap so a development can be built downtown, where other incentives that are available elsewhere can’t be offered and enjoyed.
“So right now, we’re not playing on a level playing field,” he said. “We have to work with developers to get them where they need to be.”
Larson also said the DDA made a funding exception several years ago to help get the JW Marriott Hotel built downtown.
“So there has been a precedent before,” added Harris.
Larson said Arena Place was worthy of the board’s major award because the project is aligned with the community’s vision of what should be built downtown and on a former DDA parking lot. The DDA received a report a few months ago that contained input from the community on how the board’s parking lots should be developed, and the DDA felt Arena Place complemented those comments.
“We’ve got a lot of good stuff going on,” said Harris. “The speed with which projects are coming before us is quite remarkable,” added DDA Vice Chairwoman Kayem Dunn.