Grid 70 gives birth to Grid 35
Because of the success its renovated office building at 70 Ionia Ave. SW has had, Rockford has changed its renovation plan for a nearby building at 35 Oakes St. SW.
Instead of turning the eight-story Oakes structure into 42 apartments with lower-level retail space as planned, Rockford Co. CFO Kurt Hassberger said the new blueprint is to create more than 50,000 square feet of office space with nearly 6,500 square feet of retail space, at a cost of almost $7 million. He said the bill for the entire project, which includes the acquisition cost, will reach $8.4 million.
The reason behind the change is the building at 70 Ionia is also known as Grid 70, an office structure that has gained noteworthy acclaim because designers from Wolverine World Wide, Amway Corp., Steelcase Inc. and Meijer Inc. are located in it. Pennant Health also is a tenant.
The office concept has gone so well that Hassberger said Grid 70’s ownership group has bought the building at 64 Ionia Ave. SW and plans to turn that structure into an addition for Grid 70.
“It’s been very, very successful,” said Hassberger, who manages the ownership group, to members of the Grand Rapids Downtown Development Authority last week. The owners are betting that 35 Oakes will be just as successful.
Hassberger appeared before the DDA because the board agreed in 2008 to allow the residential version of the firm’s project to capture $180,000 in tax-increment financing over 10 years, meaning the DDA would reimburse the ownership group that amount over that timeframe. But since the investment for the office plan is higher than it was for the $4.5 million residential project, the owners asked the board to amend its three-year-old agreement to allow for a reimbursement of up to $329,000.
The DDA agreed to do that last week, and 35 Oakes Associates LLC, the building’s ownership group, will receive that repayment as long as it creates one permanent job for each $10,000 of costs that are eligible to be reimbursed. According to the agreement, the eligible costs total $329,000. Hassberger said the office project would bring 142 permanent jobs into the city and create about 112 temporary construction jobs.
The state awarded the residential version a tax credit of $796,458, which represented 20 percent of the project’s total investment. The ownership group is reapplying for the same tax credit amount, which is 13 percent of the projected office investment.
“While there is no current lead tenant named for this project, it is anticipated that there will be multiple tenants with interest once the project begins construction, based on interest expressed by numerous potential tenants to date, as well as its proximity to Grid 70,” Hassberger told the DDA.