Firm continues Eastown investment
With new mixed-use building, Paramount Property Group hopes to continue vibrancy in neighborhood.
As downtown residential projects receive a lot of attention, a surge in near-neighborhood apartment buildings also is taking place.
At 1515 Wealthy St. SE, Paramount Property Group Principal Chad Koster quietly built a three-story, 12,000-square-foot mixed use building in a parking lot next to a building he’s owned since 2005.
With 12 apartment units and 4,000 square feet of ground floor retail, Koster said he hopes to continue the vibrancy so many love about Eastown. Despite the building’s anchor tenant from when he purchased it, Blockbuster, becoming an obsolete business model, he’s filled out the space with tenants such as Papa John’s, Spoonlickers and Jude’s Barbershop.
As the area economy recovered from the Great Recession, long-term plans for the new addition to the property came into focus.
“We had our eye on doing something here for awhile,” Koster said. “The market, we felt, was getting better for that. The city was cooperative with a (Neighborhood Enterprise Zone) we received. That was a huge bump for us. Even though we owned the land, I’m not sure we could have done it without that help.”
The development costs have gone north of $2 million, but Koster believes the project will be well worth the investment, as he views the area as a long-term hold. Koster has been in the real estate business for nearly 30 years, and his family has a long history in the industry as well, but the 1515 Wealthy project is his first foray into such a large multi-unit residential development.
In planning the development, Koster said there was a lot of discussion to build traditional two- and three-bedroom apartment units. The final project, however, went with four micro units, two two-bedroom units and six one-bedroom units.
The rent per unit likely will be between $800 and $1,400.
“People were moving more toward this space where they live on their own or want less maintenance,” Koster said. “It’s that lock and leave and unlock and enjoy. You don’t have to spend all your time cleaning and the chores people are trying to get away from. They’re trying to live their lives.”
The finishes on the building will be more upscale than a lot of similar-sized older projects, which generally try to save costs by building with quality, said Paul McGraw, president and CEO of McGraw Construction, the project’s contractor.
“If you drive by a few apartments around the city, in the neighborhoods, you’ll notice they save costs by not putting a lot of trim, materials they use are considerably less,” McGraw said. “For Chad, it was important it was a nice building that fits with neighborhood.”
McGraw, whose firm has moved more toward general contracting and less development, said the project was fun to work on with Koster and residential architect Robert Sears, who also ventured into relatively unknown territory with the larger structure.
Construction on the project started in June and should finish by late March, Koster said.
Developers have pushed more into larger near-neighborhood mixed-use projects in recent years, including several major projects by Orion Construction.
Green Cane Properties and 616 Development also are heavily involved in neighborhood apartment projects.
Orion spokesperson Jason Wheeler said the firm’s projects, such as Eastown Flats, Gateway at Belknap and Fulton Square, as well as a planned project on College Avenue in Heritage Hill, are meant to be connections to downtown and further the economic drivers of the community.
Wheeler said the mixed-use retail portions of the projects help create street-level activity as well as jobs, while providing multiple residential units, things standalone homes or single-level retail buildings don’t accomplish on thoroughfares.
Koster said the projects will cater to people who like the idea of downtown living but don’t want the full hustle and bustle all the time. The “micro-community” of Eastown businesses and residents also is an attraction to Koster, an East Grand Rapids resident.
He said he is in discussion with two tenants to fill out the retail space of his development — a food and non-food use.
“We wanted to keep the vibrancy of Eastown front and center,” Koster said. “We wanted to give the building a retail atmosphere, because our current tenants attract a lot of walking and biking traffic. We want to (provide) an opportunity to keep coming and enjoying retail.”