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Franklin pulls out of Studio Park
Real estate investor unable to secure enough preleasing to break ground on office portion of downtown project.
A key partner in the development of Studio Park has left the project, but Jackson Entertainment intends to maintain its course.
Franklin Partners recently issued a statement saying it will no longer partner with Jackson Entertainment on the office portion of Studio Park. The group said it was unable to secure enough preleasing to break ground on the project.
“We have witnessed a trend where major corporations in other larger markets located in the suburbs are now seeking a presence downtown,” the statement read. “McDonald’s, Walgreens, Kraft and Motorola are just a few of the firms around Chicago that have opened new amenity-rich locations downtown after being suburban-based. The need to hire and retain talent is the driving force of these moves.”
Unfortunately, Franklin’s efforts to attract a major employer to downtown Grand Rapids, even with a Class-A building with highway exposure and an amenity-rich environment did not gain enough traction.
Franklin Partners originally was tapped to help deliver an 89,329-square-foot building, with 7,730 for retail and 81,598 for office, according to a previous Business Journal report.
The office building would be included in the first phase of the two-phase development, which also included a Studio C! movie theater, 106-unit apartment complex, 946-space parking ramp, public piazza and 155-room Canopy by Hilton Hotel.
The office plans also called for a column-free floor plan and an open, all-glass window line. Amenities include 268 office-specific parking spaces, a fitness center and rooftop deck with seating and a catering kitchen for company events.
Jeff Olsen, partner with Jackson Entertainment LLC, said all facets of Studio Park, including the office portion, will go forward as planned, even though Franklin Partners is no longer tied to the project.
Jackson Entertainment now intends to develop the office portion itself. The group has and will continue to be the master developer of the Studio Park project, and Olsen asserted that would not change.
“That (office) project always needed to be preleased before it was built,” Olsen said. “Obviously, we’ll take our own look at the market at this point and evaluate some of our options internally. It’s a little too early to tell.”
Olsen added the preleasing process would become a little bit more streamlined for Jackson Entertainment. Now that the group is no longer partnered with a separate entity, it has more control over how the office will come together.
The timing of the project in relation to parking construction might have been a factor working against Franklin, Olsen said, but he was confident, with the attached parking coming closer to fruition, the “magnetic quality” of the project will increase.
“We’re completely lucky to have that attached parking,” Olsen said. “Studio Park is going to continue to develop into an entertainment district, and it’s going to become more desirable as we move forward.”
Don Shoemaker, partner for Franklin Partners, said parking was never an issue, however. The company originally had 300 parking spaces reserved for when the deck would come online. The struggle to nail down a high-profile tenant, he said, simply came down to the price.
“There was some sticker shock from companies that probably signed a lease back in 2010 when the market was low,” he said. “We didn’t find anybody who said, ‘Hey, we get how important the environment is and to hire creative talent and from the pool of millennials who want to live downtown.’”
“As a guy who lives in Chicago — and we build a lot of offices in downtown Chicago — we just saw this trend of people starting to value their employees a lot more than their rental rate,” Shoemaker said. “We thought Grand Rapids would be able to do the same.”
Shoemaker added, even though Franklin wasn’t successful this time, the firm intends to try again.
“We’re still very bullish about West Michigan,” he said.
Phase one of Studio Park is slated for completion late summer 2019.