Former J.A. Building Project Gets Approved, Again

May 7, 2008
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GRAND RAPIDS — Although city commissioners approved the revised brownfield plan in February for Two East Fulton and the Junior Achievement building, they only recently okayed the plan’s reimbursement agreement.

The second action was necessary because the plan that had been approved contained a smaller Michigan Business Tax credit, and because the structure’s primary tenant changed its mind not only about locating there but anywhere inside the city’s limits, after the revision was ratified.

“Since (February) the bank tenant has decided not to move into the city,” said Kara Wood, city economic development director.

The bank tenant Wood referred to is the new Grand River Bank, owned by Grand River Commerce LLC. In government filings, Grand River Bank listed the former J.A. building as its principal business office. But a few weeks after commissioners amended the plan, the J.A. address was crossed out on its paperwork. That left developer Robert Tol, who heads Two East Fulton, without a tenant.

Wood said the holding company didn’t want the bank to have two locations and that the business wouldn’t be moving into the city.

Still, Wood said Tol and his partners will go ahead with the exterior renovation of the two-story building at the key intersection of Fulton and Division and make infrastructure improvements to the southeast corner of that block.

“So the work he is doing is taking a risk to find a tenant,” she said.

The building will get a new roof, new windows and new entryways. The canopies will be reconstructed and the brick façade will be restored. New sidewalks, gutters and pavers will be installed, as will a snowmelt system. The areaway will be filled and the utilities will be relocated. Two East is reportedly investing $3 million into the project.

The development firm requested and received from the city last month an MBT credit of $443,800, the amount listed in the initial brownfield awarded in 2005. In February, though, the credit was reduced to $330,000.

Two East also asked for a brownfield reimbursement of $471,090 at 4 percent interest, the original figure that commissioners re-approved last month. The reimbursement will come from a tax capture that is expected to take from 12 to 14 years. The city will also collect the tax-increment revenue the project will generate — about $1 million over 16 years — and will use that money to reconstruct Division Avenue south from Fulton to Weston streets.

Approval of the reimbursements, though, didn’t come without more criticism for the building’s condition and a remark that indicated Tol was less than trustworthy.

First Ward Commissioner Walt Gutowski called the building an eyesore. He also cautioned Wood to make sure the city had all the T’s crossed and the I’s dotted in the brownfield agreement because of a “past experience” he had with the developer.

Second Ward Commissioner David LeGrand said he agreed with Gutowski that the building was an eyesore.

Wood said Two East wouldn’t collect any funds until the work is completed. The state also has to approve the agreement.

Gutowski and LeGrand told Tol earlier they didn’t think having a bank for a tenant, with the hope of adding a grocery store as a second tenant, was the best use for the building. Tol told the city then that he wanted to complete the work by August, but that was the month he said the bank was supposed to move into the building. Tol has owned the J.A. building for about four years.

The Downtown Development Authority awarded Two East two grants last month worth $60,000. One will go toward filling the areaway; the other will be used to improve the façade.

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