Banking & Finance, Government, and Real Estate

Grand Rapids weighs brownfield amendment

Proposed plan would allow investment of $208K into 16 tax-foreclosed properties.

November 30, 2018
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The city of Grand Rapids is mulling over a proposed brownfield amendment, allowing for the development of affordable housing on 16 tax-foreclosed properties in the city.

According to an item on the Grand Rapids City Commission agenda dated Nov. 27, the Kent County Treasurer foreclosed on 22 properties for nonpayment of taxes in. The city then acquired all of the tax-foreclosed properties from the county for $136,580 via the property management fund.

The city then conveyed them to the Kent County Land Bank Authority — which does business as InnovaLaB — under a property transfer and service provision agreement.

Kara Wood, executive director of the Grand Rapids Brownfield Redevelopment Authority, said InnovaLaB will provide certain services for the property, including quieting titles, and is responsible for all aspects of ownership of the property.

The city will re-acquire the properties on completion of all services required under the property transfer agreement and after the city commission considers approval of the brownfield amendment.

Of the 22 properties, 16 have homes and are brownfield eligible. The Brownfield Plan Amendment would allow the BRA to invest approximately $13,000 into each property, or $208,000 altogether. Brownfield funding would be used mainly for assisting with lead hazard remediation and/or demolition of existing structures on the property.

According to city documents, the city commission will consider approving funding on Dec. 4, and the city will re-acquire the properties from InnovaLaB later in the month.

The Grand Rapids Community Development and Economic Development departments have collaborated on an application that nonprofit housing developers may submit to acquire the tax-foreclosed properties from the city and to apply for various funding sources, including HOME Investment Partnership funds. City staff will work to develop projects at the individual properties with nonprofit housing development partners. 

The Community Development Department also will work to distribute approximately $370,000 to qualifying projects proposed by developers.

In a memo to the city commission, Wood said while the BRA has sufficient revenues to finance the projects as proposed, this should be viewed as a pilot project, and additional revenues likely will be necessary to sustain a similar program in future years.

According to the terms of each BRA loan, obligation to repay would come only from any tax increment revenues generated by the property between 2020 and 2030. The BRA would subsequently capture tax increment revenues between 2031 and 2035.

The BRA estimates a total tax-increment capture of $225,740 over a 15-year period.

All 16 tax-foreclosed properties are located within the Grand Rapids metro area. The properties to be considered for the Brownfield Plan Amendment are:

  • 1128 Cora St. NW

  • 843 Bristol Ave. NW

  • 757 Olympia St. SW

  • 524 Bekius Ct. SW

  • 1000 Union St. SE

  • 1255 Ionia Ave. SW

  • 2031 Eastern Ave. NE

  • 1264 Jefferson Ave. SE

  • 219 Montgomery St. SE

  • 1731 Madison Ave. SE

  • 937 Grandville Ave. SW

  • 808 Sixth St. NW

  • 815 Union St. SE

  • 817 College Ave. SE

  • 719 Prospect Ave. SE

  • 1900 Palace Ave. SW

Wood also argued the proposal could help to achieve the city’s goals on affordable housing by partnering with InnovaLaB and local nonprofits.

The project was presented to the Economic Development Project Development Team on Nov. 13 with an update on progress in developing individual projects. The Brownfield Redevelopment Authority approved and recommended the Brownfield Plan Amendment on Oct. 17.

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