Focus and Real Estate

Development picks up in neighborhoods

Land bank and four development firms are leading the effort.

December 20, 2013
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(As seen on WZZM TV 13) After years of little activity, urban development in the residential neighborhoods of Grand Rapids took on a much more serious tone this year.

That effort was jumpstarted when the city commission agreed to sell 162 tax-foreclosed properties for $1.16 million to the Kent County Land Bank Authority for redevelopment last summer.

That action was followed by the state awarding the city $2.5 million in federal funds for an anti-blight program, which will demolish 100 dilapidated houses. The city then entered into a partnership with KCLBA to oversee and direct the demolition work.

At roughly the same time, four noteworthy developers with a solid history of building projects in downtown announced they would develop and build in residential neighborhoods surrounding the district.

KCLBA estimated last summer it would spend about $2.3 million to buy, clean, repair and demolish the tax-foreclosed properties it purchased from the city.

As of earlier this month, Executive Director Dave Allen said 55 of those properties had been sold to private buyers for $1.14 million and all were required to sign redevelopment agreements.

Allen also reported that five nonprofit developers bought 22 of the tax-foreclosed properties from the land bank for $176,000. Habitat for Humanity purchased 10; New Development and Well House each bought three; Next Step purchased four and LINC bought two.

Twenty of the tax-foreclosed properties remain unsold and six were recently listed for sale with the Grand Rapids Association of Realtors Multiple Listing Service.

Allen said eight of the tax-foreclosed vacant lots have been sold for $58,700, while 14 are still available.

Thirty-three of the 100 targeted blighted properties have been razed at a cost of $306,000. Allen said about half of those buildings scheduled for demolition were listed for sale but only one was sold. He said the property’s buyer plans to repair and upgrade the house.

Allen also said some of the rental homes the land bank bought from the city were occupied when the sale closed, but all are vacant now. The land bank offered those renters $1,000 to help with their relocation, and he said all were pleased with the deal.

Allen said the land bank recently entered into an agreement with Habitat for Humanity in which both will demolish the blighted buildings. The Michigan State Housing Development Authority, which funneled the federal dollars to the city for the demolition program, approved the contract that will have the land bank and Habitat split the razing responsibilities.

“We and Habitat will be doing about 10 separately. So we’ll be doing 20 all together,” said Allen.

Allen told the KCLBA board at its last meeting he was concerned about demolishing homes that are on buildable lots because he doesn’t want to see those properties remain vacant.

He said he is looking into ways to attract builders to those properties in hopes of convincing them to build on the properties, especially since a recent report said builders were having difficulties finding buildable lots outside of the city.

But four builders already have been attracted to the neighborhoods and have undertaken multi-family residential developments they normally have built downtown.

Brookstone Capital has plans for State Street SE. Rockford Construction has begun one on the city’s west side. Orion Construction plans to put up two apartment buildings on Wealthy Street SE. And 616 Development has started work on the Lofts on Prospect and laid out a plan for its Lofts on Michigan.

“The speed at which projects are coming before us is quite remarkable,” said Kayem Dunn, vice chairwoman of the Downtown Development Authority, last summer.

In addition to the city’s big property sale to the land bank, Grand Rapids also sold another eight small parcels to private buyers for about $38,000 throughout the year.

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