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$40M downtown project awaits reimbursement
The developer of a massive construction project worth up to $40 million will go before the Grand Rapids Brownfield Redevelopment Authority on Thursday to have its development and reimbursement agreement approved.
Brookstone Capital of Midland has plans to build a 14 story mixed-use development, at 20 Fulton St. E, a block east of Division Avenue in downtown Grand Rapids.
The structure will contain between 96 and 108 rental apartments, with roughly half being market rate and half being affordable units, and ground-floor commercial space.
Brookstone Capital will also put up a five-story parking ramp on the site that will have about 180 spaces for residents, visitors and customers of the businesses that locate on the building’s first floor.
Construction of the development is projected to begin late next year and be completed by late 2015 or early 2016.
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The city and redevelopment authority have already transferred a brownfield designation to the firm — one that was originally awarded to the property in 2009 for a 10-story project that was never built.
The brownfield will allow Brookstone Capital to recapture most of the $7.5 million it is proposing to invest to remediate the site, which is contaminated.
The meeting on Thursday will decide whether Brookstone Capital can seek reimbursement for much of that investment through the tax-increment financing process.
The firm has asked to collect a portion of the site’s local taxes, the county’s dedicated millages, the GRCC millage, the school operating taxes and the state education millages through 2038. That portion would come from the higher taxable value a completed project would create, as the site is currently a surface parking lot.
Currently, the annual reimbursement would range from a low of $76,100 in 2015 to a high of $317,000 in 2038. The total reimbursement over those years would come to nearly $6.3 million or less than the $7.5-million investment Brookstone Capital plans to make.
The project is expected to create 21 new jobs.
“Four new full-time-equivalent jobs are anticipated in connection with the housing portion of the project, and approximately 17 full-time-equivalent jobs are expected in connection with the first-floor commercial space, depending on the final tenant, with wages expected to range from $15 to $56 per hour,” said Kara Wood, executive director of the redevelopment authority.
The city has also approved a payment-in-lieu of taxes, or PILOT, for the building’s affordable units.
Instead of paying property taxes on those apartments, Brookstone Capital will pay the city 4 percent of its annual rental income from the low-income apartments.