GR Development Update

September 22, 2006
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GRAND RAPIDS — Two developments got support from the city commission recently, while another one didn’t.

Commissioners agreed to enter into a sales option with developers for a vacant lot on the northwest side of the city. The developers hope to put up about 50 townhouses on a block bordered by Broadway and Alabama avenues on the east and west, respectively, and by First and Second streets on the south and north.

The city will sell the property at 518 Alabama Ave. NW for $15,000 to restaurant owner Larry Zeiser, who plans to build the houses with Zack Zalar, if certain conditions are met. The sale is contingent on Zeiser getting a zoning change, gaining a deferment for sidewalk repair and buying an adjacent lot. Zeiser and Zalar also have to form a limited liability company by Nov. 30. The project, called West Town Gardens, is expected to cost about $10 million to build.

Commissioners also agreed last week to lease the former City Centre parking ramp site to Two West Fulton. Two West intends to buy the 35,000-square-foot parcel at Division Street and Fulton Avenue from the city for $2 million, and then build a reported $24 million mixed-use project on the property.

The city has approved the development that Two West designed for the site, and the firm has until the end of January to close on the transaction. The city and the state gave brownfield status to the property, which allows Two West to collect Single Business Tax credits on its investment in the project.

But because the Legislature eliminated the SBT early, Two West has to either have an ownership interest in the property or a lease agreement with the city before the end of this year to qualify for the credits. The lease is good through Jan. 31, 2007 — the last day of the development agreement Two West has with the city — or until the sale closes. The lease carries a price of $1.

“The purpose of the lease is to apply for the brownfield tax credits,” said Dan Oegema, economic development coordinator for the city.

RSC Associates of Chicago and Second Story Properties of Grand Rapids comprise Two West, which is continuing to do due diligence on the site.

City commissioners also rejected a zoning change for a lifestyle center that was proposed for Knapp Street and the East Beltline. Commissioners said the project, which would have built 41,600 square feet of residential and office space and retail totaling 348,982 square feet on 33 acres in the city, wasn’t in step with the city’s master plan or the North East Beltline Overlay District that the city, Grand Rapids Township and Plainfield Township established in 1998.

Commissioners said the development had too much commercial space that would have congested traffic even further on the East Beltline. Residents strongly opposed the project. It was the second time commissioners denied the project a zoning change; the first rejection came last year.

“We’ve been through this before. There is nothing new here. In fact, this is worse. I think we’re on solid legal ground,” said 2nd Ward Commissioner Rick Tormala.

“We’re right to reject this,” added 1st Ward Commissioner Roy Schmidt.

Evergreen Properties, which wanted to build the project, argued that the development fit the master plan. City commissioners refused last month to hold a second public hearing on the project. Planning Director Suzanne Schulz said Steve Benner of Evergreen Properties could bring the project back to the city within 90 days, change the development, or participate in a study committee with her department. Schulz told commissioners city planners have worked with Benner on the project and would continue to do so.

“There were a number of things that we tried to do,” she said.

A portion of the development was also to be built on the east side of the intersection in Grand Rapids Township. Township officials recently gave their OK to the project, which would cover 13 acres with office, residential and retail. But Mayor George Heartwell saw the action the township took as in conflict with the planning agreement it entered into with the city and Plainfield Township eight years ago.

“If we send no other message, we need to send one to the township,” said Heartwell. “Grand Rapids honors their plans.”    

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