Economic Development, Government, and Real Estate

State’s Blight Elimination fund targets Club Tequila

Kent County Land Bank has $50K grant to demolish the old South Division joint.

July 3, 2015
| By Pete Daly |
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Happy hour ended at Club Tequila at 719/725 S. Division Ave. in Grand Rapids back in 2010, which up to then had been the site of 120 crime reports filed with police since 2008.

It has been abandoned ever since and is the last blighted building scheduled to be razed so that proposed new development on the Division Corridor between Buckley and Graham streets can proceed, according to the Michigan State Housing Development Authority.

A $50,000 grant awarded by MSHDA is in response to an application from the Kent County Land Bank Authority, one of 19 grants to communities around the state working to eliminate blighted properties.

According to the land bank authority’s grant application, “this is the last demolition of five buildings purchased by longtime local business Van Eerden Food Service. … (It) is the last building scheduled to be razed so that the proposed new development can begin.”

KCLBA Executive Director David Allen said the blight elimination grants were available to land banks or municipalities throughout the state that could demonstrate experience with demolition and working with state grants.

“The KCLBA had been working with Van Eerden’s for several years on this site and several others that they were able to demolish using previously awarded grant funds via LINC Revitalization Inc.,” said Allen.

Van Eerden has been working with the city of Grand Rapids’ planning and economic development departments on a redevelopment plan type called Transit Oriented Development, which Allen said is typically mixed-use commercial and residential. This one on South Division will be taking advantage of its location on the new Silver Line route.

“This building is the last one to be acquired and demolished in their plan,” said Allen.

“Over the years, West Michigan has been a key leader in economic development and community growth. I thank and congratulate the Kent County Land Bank Authority for taking the initiative to improve our community and look toward the future,” said Sen. Dave Hildenbrand, R-Lowell.

“The Blight Elimination Program has provided an excellent way for local land banks and municipalities to promote growth and investment in our neighborhoods,” he said.

According to the grant application, more than $1.4 million has been spent to purchase the buildings in the 700 block of Division Avenue to make way for a total redevelopment plan. The final piece of blight, a 10,000-square-foot commercial building, has been declared condemned by the city of Grand Rapids and is approved for demolition.

County land banks and local units of government statewide were invited to apply for up to $250,000 in assistance during this latest round of funding.

Forty-nine applications were submitted, requesting more than $8 million to fight blight. Three groups scored each application, and the combined scores were used to select the 19 recipients.

Proposals were evaluated by representatives from MSHDA and the Michigan Land Bank Authority based on their anticipated impact on public safety, stabilizing property values and enhancing economic development. Public and private investment in the project and alignment with a local place plan or other place-making effort were also factors.

Eligible projects involved demolition of blighted buildings in business districts, downtowns or commercial corridors, and full or partial demolition of commercial buildings that are part of a development project with funding commitments and/or involve demolition of blighted residential structures.

The city of Muskegon also received one of the grants, in the amount of $250,000.

In all, 19 Michigan cities and affiliated organizations received a total of $3.8 million in preliminary grant awards through the Blight Elimination Program, the others being:

  • Genesee County Metropolitan Planning Commission, $250,000
  • Mount Pleasant, $250,000
  • Marquette County Land Bank, $223,250
  • Battle Creek, $250,000
  • Harbor Beach, $150,000
  • Springfield, $135,000
  • Dowagiac, $250,000
  • Monroe, $200,000
  • Bay City, $250,000
  • Berrien County Community Development, $250,000
  • Manistique, $201,550
  • Kalamazoo, $217,350
  • Alpena, $245,000
  • Ypsilanti, $250,000
  • Clare County Community Development, $157,500
  • Coldwater, $65,250
  • Marcellus, $155,100

The Blight Elimination Program has funded approximately $25 million in demolition projects dating back to 2012 and has applied the newly repurposed $3.8 million to continue efforts to demolish vacant and abandoned structures in Michigan.

“By investing in blight elimination, we are investing in the future of Michigan,” said Kevin Elsenheimer, executive director at MSHDA. “Eliminating blighted properties promotes public safety, stabilizes property values and enhances economic development opportunities.”

MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans.

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