State approves funding for two Grand Rapids projects
Two Grand Rapids real estate projects that will result in more than 30 jobs have been approved by the Michigan Strategic Fund.
The projects were approved as part of a number of statewide redevelopment, business expansion and community improvement projects that are expected to generate about $146.3 million in investments and retain about 970 jobs in Michigan, according to the state.
MSF also approved a “revised MEGA agreement with Ford Motor Company that encourages the company to invest an additional $3.1 billion in Michigan while capping the state's liability on previously authorized tax credits,” according to a release from the state.
“The Michigan Strategic Fund approved a wide range of projects today … that will help us better manage state budgets for years to come,” Gov. Rick Snyder said recently. “These actions will all promote greater economic opportunities for our businesses and residents. Today's actions further demonstrate our commitment to Michigan’s comeback, leading to more jobs and better lives for our residents.”
The first Grand Rapids real estate project that received MSF approval was Grand Rapids-based 616 Development’s Lofts on Alabama Project.
The project, which will include demolition and rehabilitation work, will redevelop an existing factory space on Alabama Avenue NW on Grand Rapids’ west side.
“The existing building at 420 Alabama NW is being redeveloped, and a new building is proposed for 421 Alabama NW. The project will result in approximately 100 new (one and two bedroom) market-rate residential rental units with surface parking (420 Alabama) and underground parking (421 Alabama),” according to notes from the city of Grand Rapids Brownfield Redevelopment Authority meeting from Dec. 4, 2014. “The total brownfield-eligible activities are estimated at $2.8 million with reimbursement anticipated to occur over 22 years. Total construction investment is estimated at $12.8 million.”
The construction of the new three-story building is expected to generate about $20 million in total capital investment and create two jobs, “resulting in a $3 million Michigan Community Revitalization Program loan participation at 2.5 percent interest and a term of seven years,” according to the state.
“As part of the Lofts on Alabama project, the city of Grand Rapids Brownfield Redevelopment Authority received MSF approval for $2,825,000 in local and school tax capture for site demolition, asbestos abatement, site preparation, infrastructure improvements, construction of the parking ramp and contingency funds,” according to the city. “The city of Grand Rapids will contribute approximately $1.2 million in local brownfield tax increment financing and a 10-year Obsolete Property Tax Abatement valued at $658,697.”
“These projects are crucial to our continued development of downtown and the west side of Grand Rapids as vital neighborhoods where people can live, work and play,” said Kara Wood, economic development director for the city.
“The residential lofts will house a significant number of families that will contribute to the area economy and support additional commercial, retail and service businesses in the area.”
The second Grand Rapids real estate project that received MSF approval was the Waters Building project, which proposes to rehabilitate and repurpose the historic Waters Building at 161 Ottawa Ave. NW in downtown. The project will transform the building into a mixed-use space that holds office, retail, residential and hotel space.
MSF approved $2,645,110 in local and school tax capture for the redevelopment of the building, which was constructed in 1898. The project is expected to generate about $33.4 million in capital investment, creating 30 new jobs with estimated wages of an average of $14/hour.
“The developer has recently acquired the building and is proposing to rehabilitate and reposition the 275,000-square-foot, six-story Waters Building. The reconfiguration of the building is anticipated to result in 75,000 square feet of office, 64,600 square feet of retail, 50,000 square feet of market rate residential apartments and 100,000 square feet for a hotel,” according to the city of Grand Rapids Brownfield Redevelopment Authority meeting notes from Feb. 5.
“Additional improvements will be made to the rights-of-way surrounding the project, including work to address the areaways surrounding the building. Total capital investment in the project is estimated at more than $30 million, with construction costs anticipated to be approximately $16.4 million. Twenty-two new full-time equivalent jobs are expected to be created with wages ranging from $10-$24/hour plus benefits. Staff estimates that residents of the residential units could generate approximately $8,429 of new income tax for the city.”
Additionally, the Grand Rapids Downtown Development Authority has “pledged up to $1,481,127 from the local site remediation revolving fund and $70,000 in grants for access and streetscape improvements,” according to the state.