Rebuilding A Neighborhood

January 14, 2008
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GRAND RAPIDS — Two projects will finish this year and two more will get started later this year as Robert Israels continues to redevelop a near west-side neighborhood, grow the campus for his design business, and bring new jobs into the city.

The CEO and president of Israels Designs for Living will have invested approximately $32 million in renovation projects along Seward Avenue NW between Third and Seventh streets, just northwest of downtown, by the time work is completed. Israels hopes that at least 150 new jobs are generated from tenants that will occupy his renovated structures.

City Economic Development Director Kara Wood said those projects could bring as many as 500 new jobs to Grand Rapids and that’s why city commissioners extended the Renaissance Zone designation for the four buildings Israels is revitalizing.

He is waiting to hear from the state, which has final authority to grant the extension.

“I’ve tried to explain to the city of Grand Rapids and others that if we can build a better product and can rent it at a less expensive price per square foot, people from all over the United States will look at coming here,” he said.

“That’s what I’ve been doing in marketing this, and I’m finding out that people are saying, ‘Hey, this isn’t such a bad place to get employment.’ There are good people here and we can keep our overhead down. That’s been kind of the secret of my success.”

So far, Israels has been fairly successful in lining up tenants for the two buildings he will finish this year. Two companies are interested in the Aslan Building at 600 Seventh St. NW, and Israels is close to having four of the five floors in the South Widdicomb Building at 600 Fifth St. NW leased.

But his success has come at a cost — like more than a few sleepless nights.

“Boy, is this ever scary, though. It’s hard to get financing on any of these things until you get them finished. Nobody wants to write a loan on these buildings until it’s fully occupied or whatever. So it’s constantly a self-financed ordeal. It’s millions and millions and millions and millions of dollars that just keep going out. So it’s a leap of faith, but it’s worth it,” he said.

His faith has led him to renovate two more buildings. One is the former Enterprise Iron and Metal Co. building at 528 Fourth St. NW, a 9,000-square-foot, century-old structure on the southeast corner of Fourth and Seward. Israels said work will start on the building as soon as the weather breaks.

So far, Israels said he has spent a “good five figures” to clean the former scrap yard that was adjacent to the building, a process that required him to dig down a dozen feet and then haul the soil to approved landfills and bring in clean soil to fill the hole that stretched over half the property.

“We’ve actually gotten all the contamination out of there, and that was No. 1 in my book: How do we get this contamination out of here. We didn’t apply for any brownfields or anything because it would have taken way too long. But I could not allow that contamination in the neighborhood any longer. It was bad,” he said.

Israels has turned the former scrap yard into a parking lot, and now he wants to convert the building into usable space. The brick has been cleaned, and new clay tiles have been put on the roof so it looks like it did when the building opened in the 1890s as a railroad depot.

“It’s just a slick little building,” he said. “Who knows what we’re going to end up with there, but we shouldn’t have any problem finding a good tenant for it that will generate some nice jobs.”

Israels said an apparel manufacturer is interested in leasing space in the building.

Israels will also renovate the former Drueke Game Co. building at 601 Third St. NW, a block south of the Enterprise structure on the northwest corner of Third and Seward. He plans to add three floors to the one-story portion of the building and one floor to the three-story portion, and then build an enclosed walkway over Fourth Street that will connect to the South Widdicomb building. (See related story.)

When the Business Journal spoke with Israels last week, he said he would either convert the Drueke building into a new home for the Klingman Furniture Co. or into a multi-level retail center. Israels was also considering relocating Klingman’s to a downtown parcel or one near the store’s current location at 28th Street and East Beltline Avenue.

The idea for the retail outlet is one he picked up from his visits to some chic centers in the Middle East.

“We do have potential RFPs from people as far away as Indiana who would like to be on a furniture campus in a retail setting and not in a wholesale setting like the Trade Center,” he said of the retail outlet.

“I had a lot of people who are interested in this. Then along came this deal with Klingman’s, which we didn’t know we were going to get until (Jan. 4). My own personal thing is the whole building could be filled up with Klingman’s because it’s 100,000 square feet, and yet there are two other locations I can put Klingman’s in.”

Post Associates Inc. is designing the Drueke and the Enterprise projects. Erhardt Construction Co. will direct both renovations.

“I’m not creating a new look. I like to recreate what was there and then enhance it a little bit,” he said of all his projects.

When all the dust settles, Israels will have renovated at least five structures along four blocks of Seward Avenue, with the fifth being his World Trade Center at 601 Fifth St. NW, which was finished in 2002. But Israels is about much more than just restoring old buildings, as the motive behind his monetary investment, time and effort goes much deeper than that.

“I love the history of this neighborhood. It is a working-class neighborhood, but the people always had class. A lot of my friends’ mothers and dads went to work in the furniture factories. . . There was a lot of good stuff going on in this neighborhood. We had a lot of fun, and I want the neighborhood to be like that again.”

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