DDA approves downtown movie theater project
Agency signs off on updated $140-million mixed-use development proposal that will include theater, residential units, hotel and parking.
Plans for a $140-million downtown movie theater project are moving forward.
The Downtown Development Authority unanimously approved an updated mixed-use development proposal by Jackson Entertainment LLC, which would put a nine-screen Studio C! movie theater concept, apartments, a four-star hotel, parking ramp, and retail and office space in the Arena District. The project will be built on a pair of surface parking lots owned by the city and Downtown Grand Rapids Inc. — Areas 4 and 5 — just south of Van Andel Arena.
If approved by the city commission, construction on the project is expected to begin in November and conclude sometime in 2019.
“(This project) comes from your staff with a strong recommendation that this is the right thing to do, that it is a meaningful project and that it will return wealth to Grand Rapids,” DDA chair Brian Harris said.
J.D. Loeks, president of Celebration! Cinema and principal of Jackson Entertainment, detailed the multi-phased project in a presentation to the DDA on Aug. 9. The current investment total for the project is about $110 million for phase one, which includes the theater, residential units, 32,000 square feet of retail space, a 140-room hotel, office space, parking ramp and piazza. A $30-million investment also is planned for an at least 10-story tower to be built atop the parking ramp in phase two, which would add more residential units.
As part of the agreement, the DDA will purchase the city-owned property — parking area 5 — for about $3.06 million and sell both parcels to Jackson for approximately $6.88 million. Upon closing the deal, Jackson would have 10 years to begin construction on the phase-two tower, or the city could choose to buy back the air rights from the developer to facilitate eventual development of the tower.
The defined project differs significantly from the term sheet initially approved by the DDA in April 2016. Whereas some aspects of the plan remain the same — the nine-screen movie theater and publicly owned, privately managed piazza — others, like the number of residential units and the ownership of the parking structure, have been altered.
The original project called for 187 residential units to be built in phase one of the project, with approximately 150 additional units to be added in a phase-two tower, totaling approximately 337 residential units. But with the addition of the four-star hotel Loeks said would be a unique concept “from a major international brand with a hotel concept that is something I believe still only exists internationally,” that unit number has been reduced.
Under the newly agreed-upon plan, phase one of the project would create 98 residential units with about 100 additional units earmarked for the 10-plus-story tower planned for phase two. Loeks said the intention is to keep rent for most of those units “well below $1,000.”
Additionally, while the plan initially called for a 900-plus-space parking ramp that would be purchased by the city for $28 million upon its completion, Jackson Entertainment will now retain ownership of a parking ramp that accommodates between 750 and 900 spaces, with the city leasing 300 spaces for monthly parking permits to re-lease to downtown employers. However, Loeks indicated during his presentation to the DDA that a larger parking ramp still may be on the table.
“By the end of the day, it will likely be a 900-plus space parking ramp, maybe 750 to 900 spaces depending on a couple of variables that we’re working through,” he said.
The areas 4 and 5 lots comprise a combined 595 parking spots, which previously had been leased by the city for monthly permits. Those monthly parkers have since been migrated to different city-owned lots and will retain first right of refusal for the available monthly permits in the new ramp, DGRI President and CEO Kris Larson said.
The new plan also details the fiscal responsibility for the extension of Ottawa Avenue that is necessary for the project to begin. The public entities will reimburse Jackson Entertainment for costs to build the extension and eventually make that money back through brownfield and tax increment financing streams.
Additionally, while the DDA would own the 11,500-square-foot public piazza, Jackson Entertainment would be responsible for management, operations and security for the space, in partnership with the DDA. Jackson and the DDA will look to partner on programming for the space.
Plans for a minority- and women-owned business incubator on the ground floor of the Studio C! Project also are included.
“As proposed, this $110-million project would be the most significant private development in downtown Grand Rapids since the construction of the JW Marriott,” Larson said. He added that at the completed $140 million number, it would compare with some of the private developments on the Medical Mile, such as Van Andel Institute and Spectrum Health Cardiac Center.