Rylees can begin cleanup of new store site

August 19, 2012
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A vacant and contaminated site on the city’s west side moved a step closer to being remediated and developed last week when city commissioners agreed to let Rylee’s Ace Hardware borrow the cost to clean up the parcel from the city’s Brownfield Revolving Loan Fund.

Rylee’s wants to build its fourth hardware store in the area at 1205 W. Fulton St., which most recently was home to a Clark gas station, an automatic car wash and a convenience store that closed several years ago. Rylee’s can borrow up to $250,000 interest free from the fund for the cleanup. The money comes from an award the city received from the U.S. Environmental Protection Agency in 2010, a grant that totaled $1 million.

“There are extraordinary costs involved in the redevelopment of this site with the demolition of existing buildings and utilities, removal of (four) underground storage tanks, and the removal of contaminated groundwater and impacted soils,” said Kara Wood, city economic development director.

The tanks are leaking petroleum products into the soil and groundwater at the site and to surrounding properties, many of which are residential. Rylee’s is also buying the house at 21 Garfield Ave. NW for the project, located just north of the development site and also contaminated by the leaking tanks.

“These activities result in substantially higher costs of redevelopment than would be incurred in the development of a greenfield or non-contaminated property,” said Wood. “These activities are covered by the loan.”

Rylee’s has reportedly purchased the gas station property from the Kent County Land Bank Authority for $65,761, the amount of back taxes owed on the half-acre parcel and the assorted fees associated with foreclosure. The 2012 assessed value of the site is $136,000. Rylee’s also has a purchase agreement for the house on Garfield, which has an assessed value of $42,400.

Rylee’s plans to invest $1.1 million into building a 10,000-square-foot store on the gas station property on the northwest corner of West Fulton and Garfield, and use the residential site to develop customer parking. The retailer plans to start the clean-up work next month and will use the new property-tax revenue generated by the improvements the project will make to the site to repay the loan.

“This is an excellent project for West Fulton,” said City Commissioner Dave Schaffer. The properties are in his ward.

The city’s Brownfield Redevelopment Authority approved the loan in July and will put the receipts from it back into the revolving loan fund. The redevelopment authority can capture that revenue in this case. If the project’s TIF revenue isn’t enough to repay the loan, then the authority can use TIF revenues from other projects for that purpose.

The loan is interest free because repayment is coming from the TIF revenue. Wood said if the authority charged Rylee’s interest on the note, it would be using its own money to do so, sort of like charging itself a fee to make a loan. “The agreement is in place between the brownfield authority and the developer,” she said.

Commissioners also agreed last week to amend a two-year-old industrial tax exemption for Grand Rapids Spring and Stamping, which makes products for the auto and office furniture industries at 706 Bond Ave. NW. “This is in my backyard, and they are busy,” said City Commissioner Ruth Kelly.

In 2010, GRSS received approval for a tax break based on a personal-property investment of $940,250. Since then, though, the company has invested $1.5 million into the project, or $575,000 more than its initial investment upon which the original exemption is based.

State law allows an industrial exemption to be amended if the new investment is more than 10 percent over the original investment. GRSS easily cleared that hurdle; its new investment was 61 percent more than its initial one. Commissioners had to approve the amendment for the state to go along with the change. GRSS now plans to add eight new jobs to its work force instead of the four it promised with its original investment.

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