Government and Real Estate

City sells more small, vacant properties

One commissioner questions why the asking price is so low.

November 29, 2013
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For at least the third time this year, the city of Grand Rapids has sold vacant city-owned parcels to buyers located close to those sites. And for the second time this year, a commissioner has questioned why the city is selling those properties so cheaply.

Commissioners recently sold five parcels to Grant Street Partners LLC for $27,666. The properties are located at 16, 21 and 22 Grant St. SW and at 715 and 717 S. Division Ave. The five total 12,503 square feet. The smallest is 295 square feet, while the largest is 5,808 square feet.

The price per square foot for each parcel ranges from $1 to $2.63, with the South Division properties carrying the higher per-foot price tag. The average per-square-foot price for all five is $2.21. The city took possession of the properties when the sites went into foreclosure.

Grant Street Partners is affiliated with Van Eerden Foodservice Co. at 650 Ionia Ave. SW. The food products distributor has been in business here since 1920 and plans to develop the parcels in the future.

City Economic Development Director Kara Wood said buying the property gives Van Eerden an opportunity to develop a more comprehensive plan. She added that the sale of the parcels at 21 and 22 Grant St. are contingent on the street being vacated. All five are vacant commercial lots near the firm’s location.

Wood also said Van Eerden has received funding from the state’s blight elimination grant and approval from the city’s Planning Commission to demolish some buildings on its property. The money and the permission were given without the company having to submit a specific development plan for the site.

“Van Eerden believes that clearing the property will ultimately make the property more marketable for the future,” she said.

But Commissioner Walt Gutowski, who voted to sell the properties to Grant Street Partners, said developers normally pay top dollar for development sites, and he felt the city should charge more.

“I still don’t understand why we give these properties away,” he said.

It was the second time Gutowski raised that concern. The first came last September when the city sold a vacant parcel at 53 Colbrook NE to T-Mac LLC for $4,825 or $1 a square foot. T-Mac owns Grapids Irrigation, which is adjacent to the property.

“We want to keep this business in town,” said Deputy City Manager Eric DeLong of why the city is willing to sell the properties to Van Eerden so cheaply. “It’s kind of a tension between economic development and getting a premium (price).”

Commissioner James White felt the city should develop a policy for selling buildable lots to businesses. But DeLong said such a strategy is already in place, and the selling price of a parcel is determined by the city assessor.

Commissioner Ruth Kelly said there wouldn’t be a lot of competition to buy these small parcels, as only neighboring property owners would likely have an interest in purchasing them.

“I understand that,” said Gutowski. “I will still say ‘aye’ to the purchase.”

The city also sold an unbuildable commercial lot at 518 Alabama St. NW to Rockford Construction in May for $1,050. Rockford already owned a neighboring property when it bought the parcel.

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