Construction, Economic Development, and Real Estate

DDA grants funds for affordable housing downtown

November 14, 2013
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Herkimer Construction
The $29 million expansion of the Herkimer Apartments is putting to work some of the neighborhood’s low- and very low-income residents.

It wasn’t exactly “Dwelling Place Day” at a recent Downtown Development Authority meeting, but the prominent and highly regarded nonprofit housing developer had a good day, despite the lack of such a declaration.

Herkimer Apartments renovation

The Grand Rapids DDA awarded Dwelling Place a $75,000 building reuse grant last week for its nearly completed renovation of the historic Herkimer Apartments building, at 309 Division Ave. S.

The DDA grant will help cover the cost of restoring the Herkimer’s façade, providing barrier-free access in the building, making streetscape improvements and installing fire-suppression equipment and a fire tower.

The $17.8-million project is officially being done by Herkimer Apartments LDHA LP, a for-profit entity, and it is primarily converting the 122 existing studio apartments into 122 one bedroom affordable units.

“They’re providing better accommodations for the residents they serve,” said Eric Pratt, DDA project manager.

Dwelling Place is making the conversion by putting up a five-story building behind the Herkimer on its parking lot, along Commerce Avenue SW.

The new structure will have 67 apartments, while the rest will be situated in the Herkimer.

The ground floor

In addition, Dwelling Place is turning nine of the existing ground-floor suites into seven work-and-live units, and those apartments will be of the market-rate variety.

Office space is being built on the ground floor of the new building, and Pine Rest Christian Mental Health Services will have 45 employees there.

Dwelling Place first rehabbed the Herkimer in 1995, a project that turned the former hotel that opened in 1895 into the apartment house.

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After awarding Dwelling Place the grant, DDA board members then extended payment-in-lieu-of-taxes agreements, or PILOTs, for two apartment buildings the developer owns.

A 15-year PILOT for the firm’s Chaffee and Lenox apartments expired in 2012, and the DDA lengthened both agreements for up to 25 more years last week. The city commission approved both last month.

The PILOT for the eight Chaffee Apartments, at 138 Division Ave. S, will save Dwelling Place an estimated $6,336 a year in property-tax payments. The one for the Lenox Apartments, at 349 Division Ave. S, which has 14 units, will save the nonprofit more than $10,200 annually.

In turn, the city will receive $1,194 and $2,079 from the Chaffee and the Lenox, respectively, through the agreements.

Both buildings offer affordable housing units, meaning residents’ income must be below 60 percent of the area’s median income.

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