The BOB Expansion Grows Bigger

March 16, 2008
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GRAND RAPIDS — The proposed development could serve as the poster child for what defines a mixed-use project. It has the potential to be a 20-story building with the most “uses” under a single downtown roof since The BOB opened a dozen years ago at 20 Monroe Ave. NW.

Not surprisingly, the new development is actually an expansion of The BOB — likely downtown’s most successful entertainment center and nightspot since 1996. The Gilmore Collection, which owns The BOB and many other thriving restaurants in West Michigan, is part of the 20 Monroe Building Co. LP that is driving a development that would go up to the immediate north and east of The BOB on a city-owned parking lot that reaches east from Monroe to Ottawa Avenue.

“It will be a tremendous thing for the city,” said Gregory Gilmore, Gilmore Collection CEO, after he and the city’s Parking Commission agreed to extend a purchase option for the property.

Gilmore said the project would have a 35,000-square-foot footprint and would feature a below-ground theater “similar to a House of Blues concept” that would accommodate 1,500 customers. He called the theater a “flex space,” as it would host a number of events besides concerts — such as plays, movies, and even wedding receptions and anniversary parties.

Above the theater, the partners plan to build two plaza levels for entertainment-type businesses, art galleries and retail. Five levels of parking with 250 spaces would go up over the second plaza level, and a six-story boutique hotel with 200 rooms would sit above the parking structure.

Gilmore said he couldn’t reveal the identity of the hotel operator yet. He said he felt that many of the hotel’s guests would be out-of-towners attending the shows in the theater.

“We have a tremendous built-in demand and we can create tremendous traffic for the hotel from the shows we will hold,” he said.

Topping the hotel would be multiple levels of condominiums — at least 40 units — averaging 1,200 square feet and selling for roughly $200 a square foot. Gilmore feels the condos will sell because there won’t be that many, and he believes the economy will take a turn for the good by the time the units are on the market, which should be in a few years. Besides, he already has a buyer for one.

“I’m going to buy the first one, so I’ve got one sold,” he said.

Gilmore said it was too soon to put a price tag on the project. He acknowledged that the partners would apply for a brownfield and a state business tax credit, and that he has talked with the Downtown Development Authority about the development. But he added that the project wouldn’t depend on the results he gets on their requests for financial help from the state and city.

“I can’t get into the serious nuts and bolts right now. We’re looking at several years from now,” he said.

The Gilmore Collection’s desire to expand The BOB isn’t a new idea. Almost four years ago, it went public with the concept of enlarging the four-story, 70,000-square-foot former warehouse. In March 2005, Gilmore entered into a purchase option with the city for 11,360 square feet of the parking lot — the western section that fronts Monroe Avenue.

The following January the option was amended to include the lot’s remaining 19,985 square feet. Much of that space runs along Ottawa Avenue. But the amended option was never voted on by city commissioners because other potential buyers expressed an interest in the lot, and the city told Gilmore to talk with them about who the purchaser would be.

“Those other parties ultimately backed out,” said Eric Soucey, an economic development coordinator with the city who routinely handles the sale of city properties.

The option 20 Monroe agreed to in 2005 expires at the end of this month. The latest version gives them until March 31, 2009, to close on the sale. The new contract requires the partners to invest a minimum of $5 million in the project, build a development that totals at least 20,000 square feet, and have it finished within three years of the closing date.

The option will cost 20 Monroe $100,000, which will be applied to the purchase price. If Gilmore closes on the sale by the end of this year, the price will be $1.9 million — or $60.58 per square foot. The price will go up by another 10 percent to $2.09 million if the deal closes between Jan. 1 and March 31 of next year.

The 2006 option that city commissioners never voted on was a three-year agreement with a purchase price that ranged from $1.72 million in the first year to $1.83 million in the third year. The contract’s square-footage price was $55 per square foot to $58.35, respectively.

Parking Services Director Pam Ritsema said the current price reflects the property’s appraised value. She also said 20 Monroe has to enter into a development agreement with the city, which must include a performance bond, before the partners can close on the sale.

Gilmore said the expansion plan has grown since it was first presented. Back then, the project consisted of a theater and a hotel without the condos, parking or plaza spaces. One reason the development has grown is that property prices and construction costs have risen over the past four years, and the partners have to build a bigger project in order to recoup their investment.

“It’s a 20-story project,” Gilmore said. “This is an option. This is a concept. We’ve already invested $200,000, and I can’t spend a penny more until we get this (option) set.”

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