Making Room For The Inn

October 29, 2007
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GRAND RAPIDS — Peter and Brian Beukema want to build a $28 million hotel on a key corner in the Monroe North Business District and the city wants them to do that, too.

City commissioners gave the father-son team, doing business for the project as Hotel Holdings Monroe LLC, an extension on the property’s Renaissance Zone status last week so the Beukemas could get their project started.

“This project will create over 150 new jobs,” said City Economic Development Director Kara Wood.

The site, at the southeast corner of Monroe Avenue and Newberry Street, is already in the zone, but the full tax break the zone offers comes to an end at the end of 2008, a year before the Beukemas plan to open their hotel, and only partial exemptions would have been available for the three following years. The commission’s action extends the property’s nearly tax-free status through 2022, which gives the Beukemas time to recoup a much greater portion of their investment.

“The 15-year extension will actually be a 12-year extension,” said Wood.

Wood said the 40,000-square-foot site has been classified as obsolete and contaminated, and has a deteriorating and vacant building that has to be razed, so clearing and cleaning the site will be very expensive.

Under normal circumstances, Wood said a brownfield designation for the property would have given the Beukemas the incentive they’re requesting. But she said the parcel is already in the SmartZone, a tax-increment financing authority that captures the district’s property taxes, so little would be left for the Beukemas to collect with a brownfield designation. She added that if commissioners hadn’t granted the extension, the tax capture would have gone to the SmartZone and not to the city.

The Beukemas’ recovery plan includes replacing the utilities, adding a snowmelt system and upgrading the streetscape.

The 185,180-square-foot hotel will be nine stories, with one below ground for parking. It will have 250 rooms, a banquet room that will seat up to 300, a fitness center and a rooftop, glass-enclosed restaurant. The hotel will have parking for 395 vehicles, including the 95 spaces planned for the below-ground level. Also part of the development is 8,000 square feet of retail space along Monroe Avenue, across from the city-owned Sixth Street Park.

Brian Beukema said the hotel would be priced at $139 a night. Peter Beukema said the building would be as environmentally friendly as possible, but he noted they wouldn’t apply for LEED certification because of budget constraints.

“We are proposing a development that will give new life to an existing eyesore and further strengthen the Monroe North Business District while adding much needed rooms to downtown,” said Peter Beukema in a prepared statement.

When the hotel and its restaurant are open for business in 2009, both will permanently employ at least 150 workers at an average hourly rate of $11.50. Wood said the city would receive nearly $36,000 a year in income taxes from those jobs. Seeing the site has been in the zone since 1997, the property hasn’t been on the city’s tax roll for the past decade.

The Beukemas bought the property in August from Blue Bridge Ventures LLC. Blue Bridge purchased the site three years ago from Western American Mailers Inc. when the company moved to 33rd Street SE.

The Beukemas own three hotels under the Suburban Inns of Rockford banner, the Hampton Inn and the Holiday Inn Express in Holland and the Holiday Inn Express in Grandville. They have been in the hospitality business for nearly 30 years.

Last week, they received an award from Holiday Inn for the operation of their hotels.

Wood assured city commissioners that the project wouldn’t go forward without the zone extension and said the state has to approve the Beukemas’ request.

“The state will have final approval for this project,” she said. “The state is not granting an extension without a project.”

Wood also said the Beukemas will ask the state for a credit on the Michigan Business Tax.

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