DDA to reimburse developers nearly a half million dollars

December 24, 2011
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The Grand Rapids Downtown Development Authority is reimbursing six development companies a total of $460,000 for real estate projects in the district.

The reimbursement comes from a development-support policy the DDA created in 2006 as an incentive to get more construction projects going. The policy lets the DDA give back 75 percent of the new tax-increment revenue a project generates as a way to repay developers for certain eligible costs they incur during construction, such as making public improvements to a property or including barrier-free access throughout a building.

The six developers receiving reimbursements have initiated $613,000 in new tax-increment revenue from their properties so far, while the DDA has another 11 approved developments in progress under the policy. Even though the policy has been successful, it has created a bit of an administrative headache for the DDA’s small staff.

“We never anticipated that we’d have as many agreements to administer as we do,” said Jay Fowler, DDA executive director. “We found this is an inefficient way of doing this.” Fowler told board members that he is going to change how the DDA tracks these projects by using the same system as the Brownfield Redevelopment Authority, a method that is capable of tracking all the agreements in a single batch rather than dealing with each one individually as the DDA now does.

Those development firms and the projects receiving reimbursements for 2011 are: HP3 LLC for the JW Marriott; Hopson Flats LLC for Hopson Flats; 38 Commerce LLC for Thirty-Eight; 201 Monroe Avenue LLC for 201 Monroe NW; 68 Commerce LLC for The Pyramid Scheme; and Two West Fulton for the Gallery on Fulton.

“We have additional payments to Two West Fulton for 2009 and 2010,” said Fowler.

The reimbursements range from a low of $40.23 to a high of $308,317. DDA Chairwoman Kayem Dunn said the reimbursement amount represents projects with almost $40 million in total property values.

The DDA also finished three downtown projects this year and has three more on the agenda for 2012. Work was completed on Grandville Avenue between Weston and Oakes streets and on Seward Avenue between Fulton and Butterworth streets. Improvements also were made to Rosa Parks Circle. “I think this brings the park up to its standard,” said Fowler of the Monroe Center park designed by Maya Lin.

In 2012, Fulton Street will be repaved from the Grand River to Division Avenue. The street will also have new underground utility work done and the streetscape will be upgraded. Work also will be done on Oakes Street between Ottawa and Market avenues. The biggest part of that project will involve burying the overhead wires.

The Sixth Street Bridge will be repaired at a cost of $2.5 million, with $2 million coming from a state fund and the DDA contributing $440,000. Fowler said much of the DDA’s money for the bridge project will come from contingency funds that had money left over from the Grandville and Seward projects. The bridge is a local historic landmark and is listed on the National Register of Historic Places. It was rehabbed in 1979 and painted in 2002. The driving surface is rough and the sidewalks are made of wooden planks. Work on the bridge can’t start until the Fifth Third River Bank Run in May is completed.

“Quite frankly, it’s a rickety bridge,” said DDA Vice Chairman Brian Harris of the structure that was built in 1886 for $31,000. “I don’t think its design is intended for modern traffic.”

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