Construction, Economic Development, and Real Estate

Downtown parking shuffle continues

Most developers are reserving spaces only for their tenants and their customers.

July 6, 2018
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Embassy Suites has leased 125 of its almost 500 parking spaces to Spectrum Health employees. Courtesy Suburban Inns

Downtown Grand Rapids has thousands of new parking spaces in the works, but despite the private sector’s involvement, many developers are only building to suit the needs of their secured tenants.

According to data from Downtown Grand Rapids Inc., about 5,000 parking spots are either recently completed, under construction or queued for construction in the downtown corridor.

DGRI Chief Outcomes Officer Andy Guy said the private sector is “leading the way” on this new construction, with about 90 percent of it tied to private developments in downtown.

“This is primarily because 1) demand is rising, 2) downtown land value is rising, and 3) changes to public finance incentives make ramp construction more attractive for developers/investors,” Guy said.

It seems unlikely, however, that current developments in the private sector will provide much relief from the demand for monthly permits, as many of the larger downtown developers are only building parking to match the predicted needs for their tenants, in addition to any transient parking for visitors in the evening and on weekends.

Josh Naramore, director of Mobile GR, has repeatedly told the Business Journal the highest strain on downtown parking is for those looking to obtain a monthly permit. While it’s relatively easy for visitors to find evening and weekend parking in either public or private lots, employers looking to make the move downtown are struggling to find and pay for parking for their employees.

“We’re a victim of our own success,” Naramore told the Business Journal in April. “There’s a lot of fabulous development that’s happening. There are a lot of businesses and employers that want to be part of downtown.”

Orion Construction’s Warner Tower is one such development, and it will feature 430 parking spaces once complete.

But Orion Real Estate Solutions Vice President Ryan Wheeler said his firm has only leased monthly parking permits to building occupants.

ORES is leasing for employees of Warner Norcross & Judd and Chemical Bank, the tower’s two key tenants, as well as a few spaces for guests of the adjacent Hyatt Place hotel.

Wheeler also said while developers like himself recognize a shortage of monthly parking in the downtown core, it’s too much of a gamble, with construction costs, to go all-in on a speculative build.

“Nobody’s going to develop a parking structure with the intent of filling it with monthly parkers if they don’t already have that commitment from tenants,” Wheeler said.

Guy estimated the cost of building a new parking garage currently ranges from $30,000 to $35,000 per space.

On the West Side, Rockford Construction’s mixed-use development — a collaboration with Meijer and the Inner City Christian Federation — will yield The Hendrik, a 116-unit apartment complex, Bridge Street Market, 64 units of affordable housing and office space for West Michigan Center for Arts and Technology.

A three-story parking deck tied to the development will primarily be available for residents, office employees and market shoppers. Mike Mraz, managing partner with Rockford Construction, said the second story of the three-story parking deck will be able to absorb transient parkers depending on the time of day.

“Primarily, the evenings will allow for more public parking when the office tenants leave for the day,” Mraz said. “We anticipate that this will be a popular option for parking on the West Side.”

The Embassy Suites at 710 Monroe Ave. NW promises to deliver more monthly parking. The project from Suburban Inns includes a 488-space parking garage that will be open in fall 2018 ahead of the hotel’s completion in early 2019.

Peter Beukema, CEO of Suburban Inns, predicted only about 220 spaces will be occupied by hotel guests at night and fewer than 40 during the day. Suburban Inns is not issuing monthly permits for employees or guests.

“It will be first-come, first-serve,” Beukema said. “We project fewer than 20 of the more than 488 spaces will be used by employees during the day.”

But Suburban Inns also has leased 125 spaces for Spectrum Health employees for daytime use. Beukema said the health care system reached out to Suburban Inns for a parking option when it looked to move some of its employees downtown.

Spectrum is the region’s largest employer.

Studio Park, the most ambitious private undertaking downtown, has 946 parking spaces tied to it, 300 of which will belong to the city upon completion, as Naramore told the Business Journal when construction was announced.

When the development’s owner, Jackson Entertainment LLC, closed on the construction site in February, it shut down the city’s Area 4 and 5 parking lots, taking over 500 spots offline, many of which were used by permit holders.

Naramore said, prior to closing, Mobile GR had worked to reintegrate permit parkers into other lots around the city and was able to relocate the majority of them by fall 2016.

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