- change ups
Foreclosure deal seen as boost to redevelopment effort
Having Bear Manor cross the river would be a step in the right direction.
Two key players in the redevelopment of a near west side commercial district feel the deal will be a major boost to their efforts, if the transaction goes through early next year.
Bear Manor Properties, a developer and property manager, now holds a purchase option on the former Little Mexico Café building at 401 Stocking Ave. NW in the Stockbridge Business District. The firm picked up the option in a foreclosure bid recently approved by 17th Circuit Court Judge Christopher Yates.
“I’m ecstatic. I was actually looking into that building myself and had a friend of mine who runs a Mexican restaurant look into it. He decided not to do it so we didn’t do it,” said Walt Gutowski, a city commissioner, owner of the Swift Printing Co. and a developer in his own right.
“As for what it could do for the west side and Bridge Street, it’s going to be awesome,” he added.
Gutowski, who represents the district on the city commission, noted that he and his father, Walt Sr., won the very first Gerald R. Helmholdt Grand Award from the Neighborhood Business Alliance in 2000 for their renovation of the Swift Printing building at 404 Bridge St. NW.
He said this year that same honor — the NBA’s top award — went to Rockford Construction for its new headquarters at the corner of First Street and Seward Avenue, just a few blocks west of his print shop. Gutowski is working with Rockford on redeveloping the district.
“My hope is Bear Manor will get the award next year, and we’ll have a string of recipients here,” he said.
Rockford Construction Co. CEO Michael VanGessel also embraced the news.
“We warmly welcome Bear Manor to the West Side. It is important for the property at 401 Stocking Ave. to once again become a contributing asset to the neighborhood and its business community,” he wrote in an e-mail to the Business Journal.
Rockford has begun construction on a new four-building apartment complex at the corner of Douglas Avenue and Seward Street, a short block south of Bridge Street, and is offering four properties on Bridge Street and one on Stocking Avenue as potential development sites.
“Having a variety of developers with successful track records involved in the revitalization of Bridge Street will strengthen the neighborhood. We wish them well and are happy to offer our support,” said VanGessel about Bear Manor.
United Bank of Michigan held the mortgage on the building — not the original loan, but the one issued after the restaurant was destroyed by a fire in 2008. The building went into foreclosure around February and the six-month redemption period expired near the end of August, when 401 Stocking LLC was assigned the three-year-old structure.
United Bank President and CEO Michael Manica served as the LLC’s resident agent. The property was valued then at $825,888, according to state and Kent County records. Amicus Management Inc. of Grand Rapids, which recently sold the foreclosed Pike House to a local law firm, was named the receiver by the court, and the firm marketed the building on behalf of the bank.
“We had a lot of people through there and we had quite a few offers. We went with what we thought was the best offer and the one that was most likely to close. And we had a local buyer, which was appealing, as well,” said Dan Yeomans, founder and president of Amicus Management.
The building was listed for $995,000; the offer Bear Manor made was $800,000, with $700,000 of that figure going for the structure and the half-acre it sits on at the intersection of Stocking Avenue and Bridge Street. Another $50,000 went for the restaurant’s equipment, and the remaining $50,000 was for the former business’s liquor license.
The sale is contingent on the liquor license being transferred. A closing date has not been set.
“They haven’t disclosed what they’re going to do with it, but they have some things that they have to make sure are going to fall in line,” said Yeomans of Bear Manor. “They have several more months of due diligence, so it’s not a done deal.”
Bear Manor Properties, 1019 Wealthy St. SE, got its start by renovating a house at 323 Union Ave. SE in 2004. Three years later, Bear Manor owned and managed 15 properties in the city. Since then, the firm has won three historic preservation awards, along with a Neighborhood Business Award and a Neighborhood Business People’s Choice Award, both for Best New Construction, in 2009 for The Electric Cheetah at 1015 Wealthy St. SE.
Brothers Barry and Jackson Van Dyke and their sister, Heather Van Dyke-Titus, own Bear Manor and Harmony Brewing Co. at 1551 Lake Drive SE. Harmony Brewing won the Helmholdt Grand Award last year.
“We do indeed have an option on the old Little Mexico building. We are in due diligence until January,” wrote Barry Van Dyke in an e-mail to the Business Journal.
“It is integral to the way we do development to completely vet out all of our projects with the neighborhood organizations. Since we haven’t reached all the interested parties, we are refraining from talking about our potential use,” he added.
Harmony Brewing will celebrate its second anniversary in early February.
The building offers 11,915 square feet of space across four levels. Two of those floors were used for the Little Mexico Café and its two bars, while a third is a basement with 1,640 square feet of space. The building’s 2013 taxable value is $537,500, according to the county.
Ayala Enterprises Inc., headed by Enrique and Consuelo Ayala, rebuilt and reopened the popular eatery in 2010, two years after a fire gutted it. The firm and the Ayalas were the defendants in the foreclosure proceeding. The restaurant’s liquor license includes a Sunday sales permit. Yates approved the sale order Oct. 18.
Yeomans said the economy is generally better now to market commercial foreclosures, which can be hard-to-sell properties.
“It has changed tremendously since the summer of 2012. Except for office, everything has gone up: retail, industrial, investment, multi-family. The low interest rates are really driving that,” he said.
So why is the foreclosed office market lagging behind the others? “It’s going slower in the recovery just because of the whole fundamental change in how we use real estate. I know people that were in IT companies who were in offices back in 2008, and now they’re working out of their homes,” he said.
“Brokers are thrilled to get a 2,500-square-foot lease now. You just don’t see 5,000- or 10,000-square-foot leases anymore. Everybody has a smaller footprint in their office space.”