City commissioners wrap up brownfield work
Grand Rapids city commissioners approved the sixth and final brownfield plan of the year last week when they granted a request from 616 Development for a new mixed-use structure it proposes to build at 740 Michigan St. NE near Eastern Avenue.
The project, 616 Lofts on Michigan, will mark the first time the company will build from scratch, having restored existing structures in the past. The new building will have four stories with 54 market-rate apartments occupying the upper three levels and 9,700 square feet of commercial space on the ground floor. In addition, 616 will build 95 parking spaces at the site, with 68 of them underground.
The firm’s total investment in the project has been estimated at $16 million, with $3.3 million going toward eligible brownfield activities to remediate the site. That latter amount is reimbursable under state law.
“Based on projections, the reimbursement will take approximately 21 years, after which the Brownfield Redevelopment Authority will capture tax-increment revenues for five years to fund the Local Site Remediation Revolving Fund,” said Kara Wood, city economic development director.
616 Development will spend $30,000 to demolish a building on the site and $2.5 million to build the underground parking ramp for residents. The firm will also spend $300,000 on a new storm-water management system and $40,000 on improvements to curbs and sidewalks.
The tax-increment financing reimbursement will come from local taxes, school operating taxes and the state education tax millage.
When completed, the project is expected to generate $247,714 in new taxes, with $41,266 of that total going to the city. The city is also expected to gain nearly $5,000 annually in new income-tax revenue from the 15 jobs the development will create. The jobs are expected to pay from $12 to $20 an hour.
616 is also asking the state for financial support through the Community Revitalization Program. The firm hopes to begin construction early next year.
Commissioners are also likely to award 616 Development and the Midtown Neighborhood Association a Neighborhood Enterprise Zone in the near future. NEZ status would be for the residential portion of 616 Lofts on Michigan, which totals 46,500 square feet of the 76,100-square-foot project.
“The goals of an NEZ designation are to revitalize existing neighborhoods and promote the creation of new residential areas; promote new construction and the rehabilitation of housing; encourage investments; advance city strategies for homeownership, economic development, mixed-income development, sustainability, infill and elimination of blight,” said Haris Alibasic, manager of the city’s office of energy and sustainability.
An NEZ designation would reduce 616 Development’s property-tax bill for the project by as much as 28 percent.
Commissioners also approved brownfield plans this year for Brookstone Capital, Rockford Construction, Third Coast Development Partners and G.A. Haan Development. Brookstone Capital had two ratified by the board. Both are mixed-use developments, at 240 Ionia Ave. SW and 20 E. Fulton St.
The six brownfield projects will result in investments totaling $108 million.