Government, Lakeshore, and Real Estate

City authorizes $400K to shed ‘white elephant’

December 24, 2015
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Muskegon white elephant
The city of Muskegon decided to buy the block located within W. Western Avenue, W. Clay Avenue, Jefferson Street, and 1st Street in Muskegon for nearly $400,000. Courtesy Frank Peterson

The purchase of an entire downtown block should serve as a development catalyst for a lakeshore city.

The city of Muskegon has decided to buy the block located within W. Western Avenue, W. Clay Avenue, Jefferson Street, and 1st Street in Muskegon for nearly $400,000 to serve as a vehicle for continued economic development in the downtown area.

The property

During a Dec. 16 special commission meeting, city officials voted in support of the acquisition of the city block comprising the High Point Flats project currently under development at 285 W. Western Ave., the former five-story AmeriBank building at 880 1st St., and additional vacant property for a total of six lots.

Frank Peterson, Muskegon city manager, said from the city’s standpoint there is an amazing amount of value to the property for $400,000.

“Our goal is to have that block back into good positive use in the community and eliminate the blight,” said Peterson. “From the city’s standpoint, we were not happy with the progress on the AmeriBank … and we were looking to move the High Point Flats project along.”

Peterson indicated most of the lots considered for acquisition were controlled by Parkland Properties and Jon Rooks, owner and associate broker of the firm, who has offered to serve as a consultant for the High Point Flats project.

“He has offered to make himself available to us, mostly because of his familiarity with the building and the architectural work that has been done,” said Peterson. “We are essentially buying the plans for the building … by and large it will be our project.”

The timeline

While still in the early stages of planning, Peterson indicated the city commission allowed for a 60-day turnaround in which he will present a long-term plan for the property to ensure development is completed before existing tax incentives on the property expire in the summer of 2017.

The High Point Flats project, which had plans calling for a total of 72 market-rate units in the eight-story former Hackley Bank and an adjacent two-story building, may change from 100 percent residential to allow for commercial space on the first floor in a mixed-use development, according to Peterson.

“We want to get this done as soon as possible,” said Peterson. “We are still in the process of determining if partnerships exist out there. I don’t think we are going to do a full-blown RFP process … but we are interested in identifying potential partners for portions of the project.”

It would take the city approximately 90 days to secure financing, additional time to break ground, and then between 10 and 12 months before the development project would be completed. Peterson said he anticipates the project to open in late winter or early spring of 2017.

The catalyst

Due to the size of the existing eight-story former Hackley Bank building, which was anticipated to be renovated as part of the High Point Flats development, Peterson said it casts a “negative shadow” on a downtown that is otherwise doing really well.

“It is kind of a white elephant. It is the one thing you see coming into downtown,” said Peterson. “We see the building in the state it is now as a great hindrance to economic development.”

With a number of end users such as breweries purchasing and redeveloping their own projects, and most of all available building space occupied in the downtown Muskegon area, Peterson said the city views the project as a driver of economic development.

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