Economic Development and Real Estate

Grooters puts rail option on the table

New development in Walker could feature railroad access for interested tenants.

September 4, 2015
| By Pat Evans |
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Robert Grooters Development Co. is passionate about offering industrial railroad access north of Grand Rapids.

A lack of new railroad infrastructure in the Greater Grand Rapids area has led RGD to take possession of an approximately 35-acre piece of land near its 34-acre Northridge Industrial Park in Walker.

RGD has approximately 85 acres of developed industrial real estate in Walker.

“It’s a natural flow from that area,” said Kyle Grooters, sales and marketing assistant at RGD. “We have a lot of great tenants in that area and want to really expand it.”

The new space is bordered by the I-96 expressway on one side and an industrial-capable railroad on the other.

A one-time tenant’s desire for railroad access led RGD to acquire the land with the idea of developing the site for a modern industrial facility with railroad accessibility.

Currently, the tracks are used for a dining car train and occasional freight for Standard Lumber.

Grooters said he’d like to see more industrial rail access north of the city. He said most rail-friendly industrial buildings in the area are old and need updating.

“We talk to clients daily who would like to see some sort of railroad accessibility, but there’s not a lot available,” he said.

Grooters said he’s spoken with several railroad companies that are interested in seeing the northerly movement of freight capabilities. He said railroad is the ideal shipping method for large and dense cargo — such as lumber, paper and plastic — and trips of more than 400 miles.

The preliminary plan is to build two buildings on the site: one standard 255,000-square-foot building on the expressway side and, on the other, a 300,000-square-foot building with railroad accessibility.

The inside of the buildings will be divided up and available to multiple tenants to keep prices low. The large size of the buildings will allow for tenants to grow into more space should they need it, Grooters said.

The rates for the two buildings will be between $3.25 and $3.60 per square foot, depending on the tenant’s needs, with the building offering railroad access being at the higher end, Grooters said.

“We build the volume to keep that rate down,” he said. “Right now, there is a need for the less than 50,000-square-foot size spaces. It seems people want the 30,000-square-foot size facilities.”

To build the complex, RGD would like to secure at least one anchor tenant before embarking on construction. Ideally, Grooters said the site would have two complementary anchor tenants that could grow with each other on the site.

“It’s not the old days when you could spec the space, build it and then fill it,” Grooters said.

He did acknowledge an urge to get started with construction because, once the building is under way, potential tenants are intrigued by the forward movement, he said.

“It’s a little bit of a chicken and the egg situation,” he said. “We are 100 percent committed to doing this, but we need at least some commitment.”

Grooters said he sees Walker continuing to grow as more companies chose to locate in Grand Rapids, and having rail access is an added amenity.

“If there’s interest, we’ll build the access; if not, it’ll be normal buildings,” he said. “I don’t see how it can hurt — it’s just more options.”

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