Third Coast boys are back in town
Third Coast is putting together a development in its favorite stomping ground.
Levitt and Rosely established their reputation and presence as local developers about five years ago with their successful creation of Mid Towne Village, a mixed-use development with medical offices, condos, a restaurant and a park along the sector known as the Medical Mile on Michigan Street NE in downtown Grand Rapids.
Then, not very long after getting that $50 million development going, Levitt and Rosely put up a new 22,000-square-foot building in the 1600 block of Michigan Street, on the former Bishop’s Furniture site. Spectrum Health uses the structure, which is about a mile east of the Medical Mile, for child care and a development center for children.
Levitt and Rosely next turned their attention to property they owned in Holland. Then the recession hit, but as the economy has improved, their focus has shifted back to Michigan Street.
They’re getting ready to renovate the former Miller Zeilstra Lumber Co. building at 833 Michigan St. NE and a two-story structure at 411 Houseman St. NE for office and commercial space.
The Zeilstra building has 11,000 square feet, while the Houseman structure offers 16,000 square feet. When the project is done, Third Coast will have roughly 26,800 square feet of leasable space. The buildings share a parking lot.
Levitt and Rosely are investing about $5.6 million into the project.
“We’ve had a pretty good interest in Michigan Street for quite some time and we’re always looking for opportunities. With the economic environment lately, though, it’s been very difficult to put a project together,” said Rosely.
Rosely said they spoke with Matt Zimmerman, senior vice president of corporate banking at Mercantile Bank, and soon had financing for the project. “He really made this project possible,” he said.
Rosely said the city also did its part for the project: Economic Development Director Kara Wood helped them get a brownfield designation for it. Third Coast will get tax-increment funding worth $434,200. In return, the development will retain 50 full-time jobs and will create up to 10 new full-time jobs and 40 part-time positions. The city estimates it will receive about $25,000 annually in property and income taxes from the project.
“It really has been a collaboration of public, private and institutional,” he said.
Two physician groups are already lined up as tenants, and Rosely said he admired their bravery in making that leasing decision at such an early stage of the project.
“It takes a lot of courage on their part to look through an old building where the roof is leaking like a sieve, has graffiti and busted windows. Then they looked at our past projects and saw this as a great opportunity,” said Rosely.
“So I give a lot of credit to the doctors, because in today’s environment you need to have tenants who are willing to kind of ride the ship with you because there isn’t a bank in the world right now that would just let you do a spec project with nothing pre-leased.”
Landing physicians as tenants fits perfectly with the street’s established medical developments that are just to the west of the buildings. Rosely sees that trend continuing down the road, figuratively and literally.
“It’s not just going to be the Michigan Street Medical Mile. It’s going to be the Michigan Street Couple of Medical Miles,” he said.
Third Coast has a purchase option with Mercantile Bank for the Miller Zeilstra building, where the doctors will be leasing space, and one for the Houseman structure with Art Express, which assembles and finishes picture frames. Once that latter transaction is completed, Rosely said Art Express will move.
“We have a couple of groups that we’re talking to right now,” he said of potential tenants for the Houseman building.
Stephen Fry and Thomas Tooley, partners in Concept Design, are doing the architectural work on the buildings, and Pioneer Construction Co. is managing the project. The work is expected to begin soon, most likely this month.
Third Coast expects the first two physician groups to move in May 1, 2013.
“I think this is a really, really neat project. It has the continued development down Michigan Street so the Michigan medical hill doesn’t stop at College (Avenue). It goes to Mid Towne Village; it goes down to Eastern (Avenue),” said Rosely.
“You can see what Michigan Street has done over the last 10 years. Well, just wait until you see the next 10 years.”