Hotel Waiting For Approval

January 14, 2008
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GRAND RAPIDS — If state officials extend a Renaissance Zone designation this month for a key parcel on the southeast corner of Monroe Avenue and Newberry Street, then the Monroe North Business District will get a new mid-priced hotel with additional space set aside for retail shops.

Hotel Holdings Monroe LLC, headed by father and son Peter and Brian Beukema, will invest up to $37 million into the 40,000-square-foot site and begin site preparation for the project as soon as the state follows in the city’s footsteps and extends the property’s nearly tax-free status for another dozen years.

“To do a mid-market hotel and to have to build all the parking and, in a mid-market setting, offer all the options we’d like to put in the building wouldn’t be feasible without the extension,” said Peter Beukema, president of Suburban Inns of Rockford, which owns and operates three hotels in the region.

“It would be a shame not to do a building on that scale downtown,” he added.

The site the Beukemas purchased from Blue Bridge Ventures in August has been in the zone since 1997. The complete tax benefits, though, expire at the end of this year, and that isn’t enough time for them to recoup some of their investment, as being in the zone means state and local real and personal property taxes are exempted. City commissioners extended the property’s tax status in October through 2022, which gives them time to recapture more of their investment.

The Beukemas have designed a nine-story hotel with one of those levels being dedicated to below-ground parking. The hotel will have 250 rooms, a banquet room that will seat up to 300, a fitness center, and a combination sports lounge and restaurant on the roof level. The Beukemas also plan to have 8,000 square feet of space on Monroe Avenue for retail shops.

The site will offer parking for 395 vehicles, with 95 of those spaces beneath the hotel.

“Providing parking in a downtown atmosphere is expensive, and to try to be in the price points to serve the clientele that our company serves is an expensive cost,” said Brian Beukema, president of property development for Suburban Inns.

The Beukemas think the location is ideal for a hotel. With Sixth Street Park and the east bank of the Grand River across from the hotel and Canal Park just a block north, the site will give guests a residential feel when they check in, and they’ll be just a short walk from the city’s convention center, also on Monroe Avenue. The hotel won’t be all that far from the new medical developments that are being built on Michigan Street, either.

“There are also a lot of other medical-related companies that will keep coming to the Grand Rapids area. The way that is going to develop, we feel strongly, is it’s going to come down in our direction and develop behind us,” said Peter Beukema.

“A lot of it, too, was the atmosphere of the North Monroe area with the old, large-style street and the park right across the street from our site, and the river view, as well. It’s one of those atmospheres where we see guests checking in and not just going to their rooms, but getting out and walking to see a little bit of the city,” said Brian Beukema.

“It’s a very pedestrian-friendly area and it’s a beautiful area of Grand Rapids, as well,” he added.

But before construction can get fully under way, the former Western American Mailers building that hugs the south end of the property has to be razed. John Byl, an environmental attorney at Warner Norcross and Judd LLP, represents the Beukemas, and he said part of the building’s roof has collapsed and the site needs remediation work because it is tainted with heavy metals and oil.

“There are some basement levels in that building. So when we do remove it, then we have issues about having an exposed hole in the ground. I think the building is going to go in conjunction with the start of construction. Once we get this (zone extension) approved, we’ll start back up on the planning of the building and go deeper into our structural plans,” said Peter Beukema.

Moore & Bruggink Inc. is doing the engineering work on the project, while Integrated Architecture is working with the Beukemas on the hotel’s final design. A contractor hasn’t been selected yet.

Peter Beukema said his company has used Lamar Construction Co. of Holland in the past and that LaMar is directing the work on their new full-service Holiday Inn hotel that will start to go up in Midland this spring.

“We haven’t proceeded too much farther into construction drawings because all that energy, time, work and money would not proceed if the state decides different than what the city decided,” said Brian Beukema.

And the Beukemas haven’t selected a franchise for the hotel, yet.

“We’re not going to do that until we know we’ve got the green light (from the state), and then we’re going to go to work on that,” said Peter Beukema.

City Economic Development Director Kara Wood said the project will add about 150 jobs to the work force in the city. She also said extending the Renaissance Zone would do more for the Beukemas than granting them a brownfield for the development because the district is already in the SmartZone — a tax-increment financing authority that captures taxes from property improvements — so little would be left for them to capture with a brownfield.

“The state will have final approval for this project,” said Wood. “The state is not going to approve an extension without a project.”

State officials are expected to take up the extension matter this month. The Beukemas will also apply for a business tax credit of nearly $3.5 million.

Peter Beukema started Suburban Inns in 1979 with his wife, Carol. Today the company owns and operates the Hampton Inn and Holiday Inn Express in Holland, and the Holiday Inn Express in Grandville. His son Peter D. Beukema is the firm’s COO and is responsible for the hotels’ daily business operations.

Holiday Inn recently awarded the Beukemas its Torch Bearer Award for customer service for the Holiday Inn Express in Holland and a Torch Bearer and a Smart Service Award for the Holiday Inn Express in Grandville. The Torch Bearer Award is only given to the top 20 percent of Express Inns in North America, while the Smart Service honor goes to the top 10 properties of the 1,500 operating in the U.S. and Canada.

“Our Holiday Inn Express of Grandville was ranked in the ninth spot of all the Holiday Inn Expresses,” said Brian Beukema, who credited his brother Peter with being the point person in winning all three awards for the company.

“That’s something we take a lot of pride in. That speaks to the values our company has — a family-owned-and-operated company that is hands-on, and we know how our employees and guests are being treated and handled, and the type of quality we strive for.”

The Beukemas told the Business Journal they are grateful for all the assistance they have received from city agencies, boards and personnel, especially Wood; from Byl, who helped them through the local extension of the zone; and from their engineering and architectural firms which helped them put their project together.

“Everyone seems to feel really strongly that this project will be a real kickoff for North Monroe,” said Peter Beukema. “And the future of North Monroe looks really good.”

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