2007 Year in Review part 2

January 4, 2008
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Even outside of downtown Grand Rapids' "Medical Mile," construction of new medical office space was heating up. East Paris Avenue/Cascade Road, East Beltline Avenue and especially along M-6 are areas that continue to see growth in medical office space. Olga Hallstedt of commercial real estate firm CB Richard Ellis|Grand Rapids estimated that while about 17 percent of Kent County office space was vacant, the rate for medical office space was lower. Metro Health Hospital made plans to relocate from Boston Street to its new facility just north of M-6 in the fall. The hospital partnered with The Granger Group to create Metro Health Village, with medical office space, retail and a hotel planned. Spectrum Health and Saint Mary's Health Care located outpatient centers near M-6, and other types of medical spaces are following.

Grand Rapids city commissioners approved a new policy that makes state-issued liquor licenses available to restaurants and entertainment businesses located in qualified development areas such as the downtown district and Monroe North. "We have a concern of receiving a flood of new applications. We don't want to flood the market with new licenses all at once," said Jay Fowler, Downtown Development Authority executive director. Fowler told commissioners the policy contains a pecking order of which businesses get the first shot at applying for a license, and existing ones that meet the state's qualifications are at the top of the list.

The occupancy of offices in the area received a close look. Although the office market occupancy rate didn't begin the year with a big bump from last year, the market itself got bigger over the previous dozen months. Twenty more buildings and nearly 400,000 more square feet was shown in the 2007 edition of the Building Owners and Managers Association of West Michigan annual occupancy survey than was reported in the 2006 version. The office market early in the year consisted of 488 buildings and 14.8 million square feet of space. And even with the additional square footage, which can lead to more empty space, the market's overall occupancy rate grew. But it rose by less than 1 percent from the 2006 BOMA survey to 85 percent.

In a surprising shift of gears on the local front, former Ambassador Peter Secchia switched his position and announced that 23 casinos in Michigan were not enough, suggesting a local public-private partnership to create a casino in downtown Grand Rapids. The chairman emeritus of Universal Forest Products previously had been in the forefront of West Michigan gaming opposition, and his sudden change of heart was viewed as a blow to 23 is Enough's clout.

In another effort to get wired, with the acquisition of Broadbreeze Communications, Clearwire Inc. appeared have all the bandwidth needed for its deployment of the Grand Rapids wireless Internet initiative, but possibly at the expense of a parallel effort in Ottawa County. Pending ongoing negotiations, it was stated the company could opt to fulfill Broadbreeze Communication's commitment to launch a county-wide wireless Internet network in Ottawa County. Regardless, the county is now left exactly where it did not want to be when it began the process three years ago — at the whim of large telecommunications firms with primary interests in densely populated areas.

The first chapter in what would prove to be a major investment in Blodgett Hospital was a cardiac catheterization laboratory proposed by Spectrum Health. In its letter of intent to the Michigan Department of Community Health, cost was estimated at $1.34 million, including $300,000 for renovation and remodeling and $770,000 for catheterization and imaging equipment.

Also on the medical beat, Van Andel Institute broke ground on a $170 million Phase II expansion to triple its laboratory space and allow for a broadened research focus that includes neurological disorders and other chronic illnesses. Over the next two and a half years, an eight-story, 240,000-square-foot addition will be built on to the institute's existing facility on Bostwick Avenue, expanding the facility to 402,000 square feet. The addition will be on the west side of the facility, fronting North Division Avenue. It's slated for completion in 2009.

Owners of Great Lakes Marina & Storage signed a letter of intent to sell their marina operation to real estate investment trust CNL Income Properties and management firm Marinas International, and would partner with the group to develop 24 acres of adjacent Muskegon Lake frontage.

Mercantile Bank dodged a bullet by refusing to give a loan to boat broker Michael Vorce, who was under investigation for alleged loan fraud. "If someone really sets out to defraud you, it's extremely hard to avoid that," Mercantile President Michael Price told shareholders at the company's annual meeting. "One way to avoid it is to do what you're supposed to do and make sure you verify the collateral and verify the background of people you're dealing with."

Macatawa Bank was the first to level claims of possible loan fraud. Its earnings for the fourth quarter of 2006 had to be revised in March to reflect an additional loan loss provision of $4.7 million related to $5.2 million in outstanding commercial loans to a borrower it refrained from naming but was generally thought to be Vorce.


The fact that Delta Air Lines emerged from bankruptcy and Northwest Airlines was due to follow in June didn't have any immediate effect on Gerald R. Ford International Airport, but, long term, it could mean an increase in seat capacity in some markets. Ford International was keeping its fingers crossed that it would be among those markets, said Bruce Schedlbauer, manager of airport marketing and communications.  Over the past three years, the airport lost about 12 percent of its flights and about 20 percent of its seats due to airline bankruptcies.

A new tax capture plan was driving a pair of initiatives on opposite sides of the Plainfield/Division corridor. The separate plans — both involving partnerships between neighboring municipalities — hoped to achieve aesthetic and infrastructure improvements along stretches of Plainfield and Division avenues. In late 2005, Gov. Jennifer Granholm signed into law Public Act 280, the Corridor Improvement Act, allowing cities, villages and townships to create districts similar to a Downtown Development Authority for older commercial corridors along major traffic thoroughfares.

Kellogg Co. announced it was purchasing the former Cereal City USA from the Heritage Center Foundation and planned to convert it into office space. Kellogg agreed to pay approximately $2 million for the Cereal City property at 171 W. Michigan Ave. in downtown Battle Creek. The three-story building has roughly 50,000 square feet of space.

Economic development officials were buzzing about the opportunities of a new project proposed on the lakeshore. Pfizer Inc. donated a vacant drug development facility in Holland to Michigan State University to house a bioresearch center that the university anticipates will play a lead role in development of bioeconomic industries in Michigan. The agreement calls for the pharmaceutical giant to donate a $50 million pilot plant and research building at 188 Howard Ave. to MSU to house the center. Plans for the facility also include a bio-economy business incubator that will support new start-up companies.

House Democrats came up with a replacement for the state Single Business Tax they said would bring in $1.9 billion of revenue, the same amount the outgoing business tax recorded last year. Senate Republicans came up with an SBT replacement that would draw slightly more than $1.3 billion in revenue and give state businesses about a $600 million tax break. But Republican Rep. Fulton Sheen of Plainwell and Kalamazoo businessman Roger Buchholtz took the replacement idea a step further. They wanted to rid the state of the business tax, the personal income tax and just about every other state tax, and replace all of those with a higher sales tax.

SoundOff Signal was named 2007 World Trader of the Year by the West Michigan World Trade Association. The Hudsonville company has launched emergency lights around the globe. Since his arrival in 1992, Chairman and CEO George Boerigter has led the company into 16 countries, and international growth is continuing, said Thomas J. Palumbo, vice president of sales and marketing. SoundOff Signal manufactures emergency LED light systems, siren speakers and switches for police and fire vehicles, and warning and signal lights for school buses and commercial vehicles.

Outdoor superstore Cabela's signed a letter of intent to be part of the proposed 240-acre Orchard Park Lifestyle Center, but some Walker city commissioners appeared both surprised and somewhat miffed when the developer suggested build-out of the center's retail district in Phase I, rather than the Phase I build-out of the town center as originally planned. According to Orchard Park developer Northgate Holdings LLC, under the "updated plan," Phase I would begin in fall 2008 and would include construction of Cabela's, a hotel water park and associated tourist-oriented retail on 100 acres at the southeast corner of the Orchard Park property, which is located along I-96, Walker Avenue and Four Mile Road.

A project planned for the northwest corner of Fulton Street and Monroe Avenue was touted to be the largest new office development in downtown in over a decade. Principals of 275 Fulton Place LLC announced they plan to put up a 140,000-square-foot structure on property that is adjacent to Plaza Towers, a residential building. The LLC is a division of Eenhoorn LLC, which owns Plaza Towers.

G.B. Russo & Son International Grocery was honored as the Grand Rapids Area Chamber of Commerce's 2007 Small Business of the Year. G.B. Russo has been in business for more than 100 years. The enterprise, which began by selling traditional ethnic meals on street corners outside of local factories to Italian, Lebanese and Greek immigrants, has grown into an internationally recognized retailer in its third generation of family ownership.


Amazon.com bought Brilliance Audio, a Grand Haven company and key player in the business world of audio books. Brilliance Audio president and publisher Michael Snodgrass said, "There will be no change in Brilliance Audio, other than the opportunity to produce even more audio books than we are currently doing." Snodgrass will remain in his current role as will Vice President Eileen Hutton, and the company will stay in Grand Haven, where it was started by Snodgrass in 1984. It is said to be the largest independent publisher of audio books in the United States, up to its purchase by Amazon.com, and one of the larger employers in Grand Haven, with 120 employees. Terms of the sale to Amazon.com were not released.

A new $8.5 million office building was put on the drawing board for downtown Grand Rapids' riverfront, but this time it was planned for the west bank of the Grand River. The proposed site is about a block south of the historic Sixth Street Bridge where Front and Scribner avenues merge at a parking lot that serves the Internal Revenue Service office at 678 Front Ave. NW.  Front Street Property LLC wants to build a three-story, 46,000-square-foot structure with some indoor parking spaces and a surface lot.

Grand Rapids' largest employer, Spectrum Health, expected to fuel the local market with 500 new health care jobs and to continue to drive commercial construction jobs with a higher-than-normal plan for capital expenditures in fiscal 2008. But Spectrum Health CFO Mike Freed warned at Spectrum's annual public meeting that health care's decade-long construction binge in Grand Rapids will eventually wind down.

Kellogg Co., the Battle Creek cereal and snack food corporation with markets and production facilities all over the world, may be bucking the trend of moving jobs from the U.S. to Mexico. At a City Council meeting, the company approached Wyoming officials for a tax exemption on equipment it plans to install in its production plant at 3300 Roger B. Chaffee Drive. According to Deputy City Manager Barbara VanDuren, a Kellogg Co. spokesman said that the company was planning to move a production line from Mexico to the Wyoming plant.

Home to three of the top four manufacturers and dozens of second tier and up-and-coming firms — not to mention a generations-old supplier and knowledge base — West Michigan is the undisputed capital of the contract furnishings industry -- or at least it is for 51 weeks of the year. In early June, the industry turned its attention to Chicago's Merchandise Mart, where semi-trailers from Steelcase, Herman Miller, Haworth and a compact car from izzydesign again lined the Chicago River to greet thousands of trade professionals to the 2007 NeoCon World's Trade Fair.

S.J. Wisinski & Co. joined forces with two West Michigan retail-oriented firms to create The Wisinski Group. The principal staff of Walker-based Retail Development Group and Cascade Township's Edmark Development Co. assumed new roles at The Wisinski Group. Aaron Young, a former broker at S.J. Wisinski and founder and managing partner of RDG, was named president and COO of The Wisinski Group. Company founder and president Stanley J. Wisinski III assumed the title of chairman and CEO. Edmark founder Mark Finkelstein was named director of retail services.

The West Michigan Science & Technology Initiative was forming a West Michigan Medical Device Consortium to serve the region's large base of medical device companies. The consortium hadn't officially launched, but all the key players were being set up, said Kim Bode, WMSTI marketing director. The consortium, she said, is a way to get the medical device companies to collaborate and work together. The idea is to identify what each company's strength is, what each might be lacking and how the other medical device companies in this market can help them grow.

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