Grand Rapids allocates ARRA bonds
The first step toward renovating the former Federal Building at 148 Ionia Ave. NW was taken last week when Grand Rapids city commissioners assigned half of the city’s $25 million allotment of Recovery Zone Facility Bonds to the city’s Economic Development Corp.
The EDC, in turn, will make up to $12.5 million of the city’s total bond volume available to the Christman Capital Investment Group LLC, a division of the Lansing-based Christman Co., for a historic and sustainable renovation of the currently vacant downtown structure.
Kent County commissioners will also allocate up to $12.5 million to the effort from the county’s bond volume of $55 million, giving the project a total of $25 million in RFZ Bonds that came from last year’s American Recovery and Reinvestment Act.
“The city and the county are splitting the investment,” said Kara Wood, city economic development director.
The RFZ Bonds are available to private companies as tax-exempt securities and are issued by a state or local government in a designated recovery zone. Commissioners gave that status to the entire city last August. The bonds have to be issued by the end of this year.
Christman Capital will renovate the building for Ferris State University and the Kendall College of Art & Design. The work is expected to be LEED certified and will give Kendall new exhibition areas and classrooms and FSU new office space.
The city owns the building, which last served as permanent home to the Grand Rapids Art Museum and as a temporary one to ArtPrize last fall. Maintaining the empty structure costs the city about $130,000 annually.
The city plans to lease the building to Christman Capital, which will sublease it to FSU.
The city’s Brownfield Redevelopment Authority will hold a public hearing March 23 to qualify the building as functionally obsolete and allow Christman Capital to collect state business tax credits worth more than $5 million.
The city anticipates the private investment into the project will reach $28.5 million and create 13 new jobs. Christman Capital is not expected to make a request for tax-increment financing. FSU and Kendall are raising funds for the project.
Mayor George Heartwell said the city has been discussing the building with the schools since 2005 and he was becoming concerned whether it was ever going to be reused. “All of a sudden, the stars seem to be aligning,” he said.
Heartwell said the structure will make a nice addition to the FSU and Kendall downtown campus. The schools have two other buildings just south of the Federal Building at 151 Fountain St. NW and 111 N. Division Ave.
“This still leaves money out there for other private developments,” said Wood of the city’s RFZ Bond volume. “We still have $12.5 million.”