Division Buildings Could Get New Look

May 5, 2008
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GRAND RAPIDS — If the Downtown Development Authority can get the state to go along with its grant request, owners of eight buildings on a portion of South Division Avenue will get new facades on their structures at a big discount.

DDA Executive Director Jay Fowler applied for a $99,505 façade-improvement grant from the Michigan State Housing Development Authority. The state agency unveiled the new initiative in February. The program provides grants to improve building fronts on a series of structures. The grants range from $25,000 to $100,000.

DDA members agreed to match the grant amount they receive with local dollars. So if the board’s full grant request is approved in Lansing, the DDA will have $199,010 in its façade improvement pot.

Fowler and his staff decided to concentrate the façade improvements to buildings on the west side of a block of South Division Avenue that runs from 101 to 139 S. Division. Four of the buildings are vacant, but all have current owners and one structure is under option to Dwelling Place of Grand Rapids. The caveat is owners would only have to pick up 20 percent of the cost to make the improvements.

“The property owners have 20 percent, the DDA 40 percent and MHSDA 40 percent,” said Fowler of the shared cost. “The property owners have signed term sheets.”

The term sheets, though, don’t legally tie the building owners to following through with the improvements. But the documents do tell MHSDA that they would participate in the program. A grant would have to be fully repaid if an owner sells a building within a year of making the improvement. Eighty percent to 20 percent of the grant would have to be repaid if an owner sells a building within two to five years of completing the upgrade.

Fowler added that all upgrades will have to be approved by the city and state historic preservation commissions before the funds can be allocated. The buildings are located in the Heartside Historic District, which requires the local commission to ratify exterior changes. Because state dollars will be involved, the Michigan commission also has to OK the changes.

Fowler said the DDA chose that block of Division because a need for improved facades became apparent when the board did its recent retail pilot project directed by Anne Marie Bessette. The east side of that block has already been renovated, with Dwelling Place having completed most of that work. Bessette is also directing the facade program for the DDA.

The buildings at 101 and 111 S. Division are included in the grant application but for smaller amounts than the others, around $13,000 each.

“Both require a substantial larger amount of façade restoration. We also thought that those were key buildings to the block, that anything we could do to help those two buildings get underway would be very important. We included them for relatively small amounts of grants compared to the cost of the total façade restoration,” said Fowler.

“The other projects are all a smaller amount of renovation for the most part, but are a larger percentage of the grant,” he added.

Brookstone Capital LLC, a Midland-based firm, is trying to turn 101 S. Division into a mixed-use development consisting of ground floor commercial space and 21 apartments on the second and third floors. But to do that Brookstone Capital needs nearly $4 million in low-income housing tax credits from MHSDA. Brookstone Capital Principal Karl Chew, who plans to invest $6 million into the 124-year-old building known as the Watson & Heald, is hoping the state agency grants his request soon.

The building at 111 S. Division, known as the Harris Building, was once home to the apparel shop In The Image. Heartside Inc. owns it but Dwelling Place has an option on the building.

All the buildings on that block, except for 131, 133 and 139 S. Division, are listed in the grant. Local architect DTS Winkelman provided board members with illustrations of what the buildings could look like with new facades.

“If that block is improved, it’s going to make a huge difference,” said Kayem Dunn, DDA chairwoman.

Fowler said the South Division Avenue buildings were chosen for the grant application for two reasons. First, the MSHDA program requires an applicant to have a minimum of two related buildings that need façade improvements.

“I think you can identify individual buildings that certainly would need attention but the impact of this program is that you have to have a group of buildings that are related,” he said.

Second, a number of the building owners on that block have already made investments in their buildings, and more money has and is being invested in structures on adjacent blocks.

“When the MHSDA opportunity came up, we looked around at different locations that could really use this program, and it really seemed to be the natural location. The timing is right because of the work that Dwelling Place had done across the street and the work the Reinert brothers are doing a half-block to the north at the old Alma Latina building,” said Fowler of Paul and Dave Reinert, who are renovating 45 S. Division Ave.

“We think the whole image of the street is turning around, and this will be helpful to the businesses on the west side of the street.”

That image will get an even bigger boost through two new developments. One is The Gallery On Fulton that Two West Fulton LLC plans to build on the southwest corner of Division Avenue and Fulton Street. The other is the exterior renovation by Two East Fulton LLC to the former Junior Achievement building on the southeast corner of the same intersection.

If MHSDA approves the DDA grant this spring, work on the facades would get going this year. But the DDA hasn’t targeted a second set of buildings yet, which could turn out to be difficult.

“I don’t know if there is an obvious next location. We certainly could go the next block farther south on Division, but I’m not sure that area is ready for development. This area has filled in,” said Fowler of the 100 block.

“I don’t think any other sectors stand out. Before we started the BRIP (Building Reuse Improvement Program), we had over 70 vacant buildings in downtown Grand Rapids. We are getting down to just a handful now that haven’t been renovated.”

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