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Thornapple Site Nearly Leased
GRAND RAPIDS — Commercial real estate developer Eric Wynsma is getting close to filling the former Thornapple Valley Meats Co. production site with tenants, and that’s no baloney.
Two closings and groundbreaking on two new buildings are set to happen between next week and February, respectively.
Wynsma bought the building at 2000 Oak Industrial Drive NE, where Thornapple made hot dogs and sausages, and the 17 acres around it from the Iowa Beef Packers two months ago. The land is just north of Michigan Street at Plymouth Avenue and Oak Industrial. He will move his company, Terra Firma Development, there in August.
“My primary interest was in some of the land around it. It’s a 17-acre piece, all contiguous, and a number of different components came together all at the same time,” said Wynsma, president of Terra Firma, which is Latin for solid ground.
“As I was looking at the deal I learned that the city was selling their water department site to Siemens Dematic and that they needed to find a new home for their water department,” he added.
The city will purchase six acres there. The price was not to exceed $100,000 per acre, a bargain rate, and was contingent on the city turning over the water department building at 530 Ball Ave. NE to Siemens Dematic.
City commissioners approved the framework of the buy-sell agreement and gave the property a Renaissance Zone designation on the same day in September.
“They’re in negotiations on that currently,” said John Kuiper, an industrial specialist with Grubb & Ellis/Paramount Properties, who represents Wynsma in the deal.
Wynsma said the transaction with the city should close on Dec. 10.
The city gave the land Renaissance Zone status in return for a discount price on the six acres. Wynsma said under normal circumstances an acre on that site would sell for at least $150,000. But for Wynsma, getting the designation was worth reducing the price to the city.
“That was really the key to the whole thing. The deal might have worked without the Ren Zone, but it wouldn’t have been worth doing,” he said. “The Ren Zone is what attracted a printing tenant to the building and the two other users that I have that are going to co-exist with me on the remainder of the property.
“It’s a below-market acquisition for the city by a long way. But it got me my Renaissance Zone, so it’s worth it to me.”
The designation means that almost all state and city taxes will be exempt for owners and tenants there for the next dozen years and only a portion of those levies will have to be paid over the following three years. The acres owned by the city will not be in the tax-free zone, though, and the Ren Zone clock will begin ticking on the property next month.
Wynsma said a printing and graphics company has agreed to purchase the Thornapple production building, along with about five acres of land. That deal is set to close before Christmas. Rapistan once owned that building.
“That basically leaves me with six-and-a-half acres,” said Wynsma.
His plan is to build two 50,000-square-foot buildings on the remaining acreage. Wynsma would lease one to a Grandville manufacturer and then move Terra Firma from its current home in the Brass Works Building and join a plastics manufacturer in the other structure.
Groundbreaking for both buildings is scheduled to take place in February and construction is to be completed in August.
“The focus of Terra Firma is new-building construction. I also buy a lot of stressed industrial properties. I clean them, get them leased up and keep them as investments,” said Wynsma.
Terra Firma has about 700,000 square feet of industrial space in its portfolio, and Wynsma said the shaky economy didn’t stop him from going ahead with this deal.
“There are certain things that just kind of make it manageable, like having the Ren Zone availability with rail access. And that is what I have on Oak Industrial,” he said. “Those kinds of factors can really overpower a slight weakness in the economy.”