Economic Development, Retail, and Small Business & Startups

City exploring lack of Silver Line development

Grand Rapids is commissioning a $945,000 study to help identify strategies to spur investment along South Division Avenue.

February 15, 2019
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Division and Burton
The Burton Heights area is seen as a potential catalyst area for development by leveraging existing businesses, which include some authentic Mexican and Guatemalan restaurants and several clothing stores. Photo by Justin Dawes

When highway traffic was rerouted away from South Division Avenue in the 1950s, Grand Rapids city leaders attempted to solve the resulting economic downturn by wiping the slate clean and trying something else.

Starting in the late 1960s, South Division was designated by the city as a C4 heavy commercial zone, allowing business such as tire stores and car repair shops that are “horrendous” for the growth of a neighborhood, according to Suzanne Schulz, director of design, development and community engagement for the city of Grand Rapids.

“Basically, everything that anyone else didn't want in their neighborhood was put on South Division,” she said.

Commercial business took the place of demolished viable neighborhoods, such as between Wealthy and Franklin streets, targets of the urban renewal projects and their “racial undertones.”

This left the area’s residents — now about 43 percent Hispanic and 34 percent black, the rest white and mixed — in a slowly declining neighborhood with little hope of a turnaround.

The 1970s Grand Rapids riots near Wealthy Street then could have contributed to stunted growth, as well, Schulz said.

The zoning was changed in 2007 to match other neighborhood business districts, but the effects remain.

When the $40-million Silver Line rapid bus route was established in 2014 — in part to improve quality of life, an important focus in the talent attraction game — the hope was it would spark development along the route, which runs for 9.6 miles along Division from downtown Grand Rapids to 60th Street.

“So, you've had huge voids along the corridor,” Schulz said. “The question has been: How do you flip that and view those as significant opportunities for new investment and some change?”

The city has a track record of making streetscape and other improvements that have contributed to revitalizations, she said, like the Cherry, Wealthy and Bridge streets areas. There, developers often were attracted to already active momentum.

But on South Division, after the city’s investment, nearly nothing happened.

Now, the city is commissioning a $945,000 study to help identify strategies to spur investment. The study is being funded with a $696,000 grant from the Federal Transit Administration, a $174,000 grant from the Michigan Department of Transportation and $25,000 in grants each from Grand Rapids, Kentwood and Wyoming.

The FTA grant is meant to analyze the corridor’s housing and employment; identify economic barriers and equitable opportunities; and promote the planning of policies, educational tools and initiatives that coordinate with the efforts.

While the city’s corridor improvement plan — about two-thirds complete — is establishing what the community wants and where projects should go, the FTA grant study will show how to viably implement those plans.

The city said the Division Avenue corridor’s southern end has the highest total population, greatest density and most transit-dependent residents compared with other routes, offering significant potential development opportunities.

Community priorities

In establishing the corridor improvement plan, the city has been engaging residents since 2017.

In the group’s third community meeting earlier this month, attendees, city workers, the steering committee and hired community ambassadors voted on the top three most important projects. From there, city workers will determine details, like partners and timelines, for inclusion in the overall plan, according to Courtney Magaluk, the city senior project manager leading the engagement effort.

Schulz said the top community priority is to gain a local lending institution, one sympathetic to the community’s needs and ability to form relationships with residents. The institution should offer “alternative financial tools” that allow residents easier accessibility, the group said.

Schulz said many in the Latino community, in particular, take big risks to establish their businesses by themselves, which could put them in jeopardy.

“A lot of people, especially small business owners, don't know that's a resource or they don't even have access to it,” Schulz said. “So they might be able to have a viable business, but they can't grow because they don't have the capital that a bank could provide.”

While there are several businesses along 28th Street that got their start at the 28th Street Mega Mall, she said many startups need easier lending access to take their businesses to the next level.

The second priority is to advocate for city and state policy changes to maximize eligibility of South Division properties for incentive programs and then market those incentives to developers. Especially with South Division designated by the state as an opportunity zone earlier this year, there are a lot of possibilities in that area.

For the new Diamond Place Apartments, at 1037 Michigan St. NE, she said developers underwent a thorough planning process that included heavy community input. The thorough plan helped earn the developer low-income and brownfield tax credits and attracted the anchoring Gordon Food Service grocery store.

“Our hope is that we can use something similar in approach on South Division and have those discussions, identify those developer interests and really combine it with the neighborhood vision,” Schulz said.

The other priority is to facilitate home repair and improvements through education, services and a reproducible model program, allowing residents to maintain their homes and home ownership.

Expanding ownership

The overall goal is to expand local home and business ownership, building wealth in a way that doesn’t displace residents.

Working with Chicago-based SB Friedman Development Advisors, the city is considering the input in a market analysis on what actually could be feasible in the area.

Schulz said that leads planners to consider the scale of developments because new property owners may not be able to afford large buildings.

Schulz said she thinks a couple of key catalyst projects would help set the vision and launch development. The Burton Heights area, at Division and Burton, probably would have the biggest potential for a catalyst, leveraging the area’s existing businesses, which include some authentic Mexican and Guatemalan restaurants and several clothing stores.

“There are lots of really great restaurants in the area that I don't think Grand Rapidians have really found yet,” Schulz said.

She said a catalyst project could better expose those places and earn them continued support from people within and outside of the neighborhood.

The six area residents hired as community ambassadors are planning a fashion show in March at the Salvation Army KROC Center to showcase items at local clothing stores, just one of the ideas they have had to promote each other.

“It has been really rewarding to see this work develop over the last couple of months, especially the shared enthusiasm and potential partnerships that are starting to develop around the table,” Magaluk said.

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