City moves residential project forward

January 27, 2012
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Even before city commissioners held public hearings on four brownfield requests last week to convert four vacant elementary schools into apartment houses, they approved terms sheets with the developer that would allow a portion of each property to be used as a city park and playground.

Commissioners also released the city’s right of first refusal for Stocking Elementary, which with Oakdale Elementary, Eastern Elementary and Lexington Elementary, is targeted for conversion. The city released its rights on the three other schools last year when Ojibway Development offered to purchase them. Since it made that offer, Ojibway also has expressed a desire to buy the Stocking school.

An independent assessment concluded that all four of the four-story buildings are functionally obsolete and unable to be used as intended, a necessary qualification for a project to receive brownfield redevelopment financing. The developer is seeking about $7.4 million in that financing for making improvements to the properties and for putting the sites back into play. The firm also is donating the land that will be used for public parks.

“If and when the property is developed into residential work-force housing, we get to use some of the brownfield credits to develop the parks,” said Deputy City Manager Eric DeLong.

“As we look at these plans, (the parks) are a buffer, and it’s a chance to add additional housing,” said Commissioner Ruth Kelly.

“I think this is unbelievably important. To secure parkland is critical and to keep it public,” said Commissioner Rosalynn Bliss.

Commissioner Dave Schaffer spoke for the board when he said he’d rather have the buildings filled with students in their classrooms. But he noted the commission was left with finding the next-best option for the empty structures. “I don’t think remaining vacant is an option,” said Schaffer. “I want to make sure the development is right for the neighborhood.”

The project’s development firm, GR School Lofts LLC, plans to invest about $18.2 million to renovate the buildings into apartments. Kirk Bruce is the resident agent for GR School Lofts LLC and also the executive director of Affiliated Developers. Bruce Michael, who is experienced in these types of projects, is the development officer for Affiliated Developers and also a member of Ojibway Development. Affiliated and Ojibway share the same address in Berkley, Mich. Ojibway has purchase agreements in place with Grand Rapids Public Schools.

“I think this is groundbreaking. I think other cities will look at us to see what we’ve done with vacant public schools,” said Bliss.

Commissioners also gave the city’s Brownfield Redevelopment Authority the green light to issue bonds worth up to $3.2 million that will be used to make public improvements to the streets around the Urban Market project being done by the Downtown Development Authority and Grand Action Committee. The market is planned for 3.5 acres on Ionia Avenue SW; work will be done to Ionia, Logan, Buckley and Wealthy. The year-round market has been projected to cost from $28 million to $32 million to build and is expected to open in spring 2013.

“We’ve got this on a fast track,” said Jana Wallace, city bond officer and DDA treasurer.

Commissioners also amended a Renaissance Zone agreement the city entered into with Via Design Inc. for its headquarters at 563 Grandville Ave. SW. Due to the downturn in the economy, the design firm told the city it will not be able to fulfill its hiring and investment commitments and asked that both be reduced. Instead of bringing on four full-time employees, Via has said it will hire one, and rather than investing $300,000, Via said it would put $270,000 into the project.

“They’ve invested $270,000, but don’t expect to invest $300,000,” said Kara Wood, city economic development director. “We do hold a letter-of-credit on this and we can collect on the letter-of-credit if they close up shop.”

City commissioners agreed to make both changes last week.

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