Project Clears DDA

November 27, 2007
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GRAND RAPIDS — A $14 million project planned for the Heartside Business District cleared its first fiscal hurdle when the Downtown Development Authority financially agreed to back it and a proposed city-owned parking ramp.

The development being proposed by 38 Commerce LLC would offer 30,000 square feet of office space, 30 to 35 residential units and ground-floor retail across a pair of buildings that would rise seven stories on Weston Street and eight levels along Commerce Avenue. The square footage of both would total at least 68,000 square feet, and the development group calls the structures “liner” buildings.

“The whole idea behind the liner buildings is to keep the streets pedestrian-friendly,” said Andy Winkel, president of Kelwin Properties and a member of 38 Commerce LLC.

As a complement to the development, Parking Services would buy a portion of the site and build a 360-space ramp that would be hidden by the buildings. The total cost for the parking structure, including land acquisition, engineering, design and construction, has been estimated at just under $11 million.

“The ramp is concealed and the liner buildings are what you would see from the street,” said DDA Executive Director Jay Fowler.

DDA members agreed to help Parking Services with the purchase price of the property by contributing $473,000 to the land’s total price tag of $1.68 million, leaving the parking department with an acquisition cost of slightly less than $1.2 million.

The board also agreed to enter into a development and reimbursement agreement with 38 Commerce and will reimburse the firm up to $639,000 for its $14 million project. Fowler said the reimbursement will come from the tax-increment revenue the project generates.

Winkel told the DDA the development could be a catalyst for other nearby Heartside buildings located south of Fulton Street. He said the ramp would provide the needed parking to fuel further occupancy of existing buildings and could spark upgrades to those structures.

Parking Services Director Pam Ritsema said companies that have a younger work force have shown a keen interest in moving into downtown. She cited ProCare Systems Inc. as an example. The medical management firm is moving from a suburban location and bringing its 80 employees to a renovated 61 Commerce Ave. SW in March.

ProCare Systems Finance Director Michael Batts told Ritsema that a new ramp would be of great benefit to the company, as it expects its work force to grow over the next three years.

Ritsema said she has received 13 letters of support from businesses near the development site. She said one from Stephen Laham, who owns the building at 25 Commerce Ave. SW, neatly summed up how parking supports economic development.

“I have every confidence that construction of the proposed ramp would not only address these issues (a lack of safe, convenient and affordable parking) for my company, but would encourage the growth and development of other businesses in the Heartside District,” wrote Laham.

The ramp would also offer parking for events held at Van Andel Arena. The city is likely to buy its parcel on the site next fall and hopes to begin construction on the ramp in October.

The Historic Preservation Commission has to approve the demolition of the building at 38 Commerce Ave. SW and the new development for the site. The Planning Department and the developer have to iron out design issues. The Brownfield Redevelopment Authority has to add the site to its list. Then the City Commission and the state have to approve its addition.

Winkel said a lot of development has happened along Division and Ionia avenues over the years but not nearly as much on Commerce, which is sandwiched between the two. He said his firm’s project could help change that situation and bring more attention to the street.

Winkel said he wasn’t sure yet whether the residential units would be rental apartments or condominiums. He also said he hasn’t locked in any office tenants yet but remains confident that he will.

“We don’t have tenants committed right now,” he said. “But we have had conversations and the feedback has been positive.”  

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