Firm tackles ‘missing middle’ housing problem
Third Coast Development admits there’s a gap for potential residents who make between $30,000-$50,000.
Should a potential resident want to live on Michigan Street, Max Benedict wants to be able to point them to a housing option no matter their income.
With more than 400 market rate apartments online or under construction by Benedict and his partners at Third Coast Development, Georgia-based RISE Real Estate and 616 Development, he knows the market for those who make more than $50,000 is pretty saturated along the corridor.
Third Coast’s Diamond Place, 1003 Michigan St. NE, will offer 100 affordable income units along with its more than 60 market rate units, but those are mostly reserved for residents who make under $30,000.
To help solve the city’s “missing middle” housing crunch, Third Coast is planning another development at 637 Michigan St. NE, which would feature 44 units, including 37 micro unit apartments. There still are several pieces in motion to be able to offer the apartments to potential residents who fall between the $30,000 and $50,000 income range.
“There’s a definite gap,” he said. “If you’re a young professional with some student loans, you can’t afford to live on Michigan Street, because you either make too much or not enough. We want to be able to have anyone come up to us and say, ‘I make X amount where can I live?’ and point them into the right direction.”
Should those hurdles not be cleared, Benedict said further development of the corridor should be reined in, but opportunities abound when it comes to the missing middle and low income. Benedict cited Third Coast’s market rate projects, along with RISE Development’s nearly 300 units along Grand and Benson streets near Michigan Street and 616 Lofts on Michigan, 740 Michigan St. NE, as units still to be absorbed by the city’s market rate apartment supply.
“As far as market rate units, it’s tough to propose anymore,” he said. “I still think there’s a gap, and as long as there’s energy, there are opportunities.”
Third Coast has laid its claim as the primary developer on Michigan Street, first with more than $100 million worth of investments at Mid Towne Village, consisting of a mixed-use office building and retail center with The Omelette Shoppe and El Barrio, the Women’s Health Center, Park Place Condominiums and a Hampton Inn and Suites.
“Michigan Street is one of the many arterial corridors that the solid downtown core can grow into,” Benedict said. “It’s the one we’ve picked and has an incredibly strong base of investment with the Medical Mile, so we can help shift the gravity further east.”
When Third Coast bought up three blocks and 50 homes more than 15 years ago, Benedict’s partner, Dave Levitt, said the estimated investment would be $27 million. Instead, it has reached the $100 million level.
The hotel has been a success less than a year into its operation with its 142 rooms occupied nearly 80 percent of the time, Benedict said. Mid Towne also has recently completed two buildings with 26 apartments, which steadily are filling with residents, he said. The two buildings also have ground-floor retail space, including one which now houses Community, by Walgreens, a medical-only pharmacy. A third residential building, or office, could go up in a space that once provided parking to Mid Towne when the hotel was under construction.
While Mid Towne still was in development, Third Coast also built Lumberyard Lofts, 855 Michigan St. NE, a two-story mixed-use project with residential on the top floor and three retail uses on the first floor, including Snap Fitness, Flat Lander’s and Grand Butchers.
As Diamond Place begins to go up in the coming months on the site of the former Proos Manufacturing site, Benedict said Third Coast views it as a triple bottom line project. He said the neighborhood was heavily involved in the planning process, and while the developer still will likely make money on the project, it won’t be as much because of the grocery store component they’ve promised.
“We knew the neighborhood wanted and needed some of the pieces of that project,” Benedict said. “We let them do the fun work of planning and heard they needed a grocery store and wanted workforce housing for all the homes being displaced for the new developments.”
Along with each residential project, Benedict said Third Coast has been selective for its retail component to add value and vibrancy to the corridor. First at Mid Towne, the Third Coast partners came together to start El Barrio — as they felt a restaurant was needed — then came Snap Fitness and Grand Butchers at Lumberyard and, now, a grocery store at Diamond Place.
“As projects come online, we like to figure out what services are lacking in the area and seek them out,” he said. “There have been potential retailers we butted heads with what we think is best for the area and weed through those.”
While Third Coast is firmly associated with Michigan Street, the firm has projects elsewhere across the Grand Rapids area.
Benedict said residents should be able to move into 25 Jefferson Ave. SE within the next four months. The former office building was purchased last fall and converting into an apartment building with 21 units, including six multi-level “townhome-like” apartments on the ground level.
At 320 Hall St. SW, Third Coast partnered with Custer to transform the former Benteler Automotive facility into Class A industrial space and additional Custer office and warehouse space and will be move-in ready soon. Custer will use 60,000 square feet of the space, while Third Coast has 110,000 square feet more for industrial and 10,000 square feet for office use.
At the corner of Leonard Street and Alpine Avenue, Benedict said a proposed apartment building with 36 apartment units, including 26 affordable units, should be ready for move-in by December of next year. Further west down Leonard Street, the developer is deciding between several options to pursue on The Highlands golf club site it purchased this summer.
Despite the scattering of other projects, Third Coast seems to be set on continuing the development along Michigan Street while being cautious not to overbuild, especially residential.
“The thing about it is the energy grows with every project that goes online,” Benedict said. “With the people walking the streets, there’s still a lot of retail opportunity. We’ve also had office interest. If all of a sudden a place wants to locate an office to a newer, hipper area with a lot of residential activity and nice retail selection, that’s something they might look into there. There’s still potential for a lot.”