GRAND RAPIDS — Downtown Grand Rapids seems to have burst at the seams and spilled a few streets south, the result, some say, of confidence that an anchor project — the $30 million Downtown Market — has brought to a neglected part of the city.
Crews working on the Downtown Market — the name officially given to the project last month — and other projects near the intersection of Wealthy Street and Division Avenue Southwest almost trip over each other as they scurry to close up space before winter sets in.
The frenzy only promises to pick up more steam nearby as Dwelling Place plans to break ground this month on a $30 million package of affordable housing and office space, and Brookstone Capital LLC expects to launch construction on three apartment complexes carrying a total price tag of $36 million.
“There was a time when Grand Rapids didn’t include anything south of Fulton Street. Now we are seven streets down, south of Wealthy Street,” said Dennis Sturtevant, CEO of Dwelling Place, a nonprofit community development corporation that owns and manages more than 1,000 apartments and homes in 21 housing communities throughout West Michigan.
He said his organization will break ground this month on work that includes renovation of apartments in the historic Herkimer Hotel building and construction of two multistory buildings for offices and retail.
There wasn’t this sort of activity in the area a year ago — only plans that had been in discussion for years. That changed with the demolition of six neglected buildings to make way for the Downtown Market, an urban food market promoted by the Grand Action organization to add a shining amenity to the city.
Now about halfway through completion, the project calls for an outside seasonal space for 45 vendors, inside space for 22 vendors, a commercial kitchen for culinary entrepreneurs, and children’s kitchens with equipment that adjusts to the varying heights of kids — all topped by lighted greenhouses that will act as a beacon for motorists driving along the U.S. 131 freeway.
The 130,000-square-foot market — about one-twelfth the acreage of Detroit’s Eastern Market — is expected to be a source for local fresh-grown foods for adjacent neighborhoods, as well as a drawing card for suburban Grand Rapids residents and visitors.
Grand Action — a not-for-profit organization co-chaired by Dick DeVos, David Frey and John Canepa — played a critical role in launching the Downtown Market. The organization has led or supported major projects that have transformed downtown Grand Rapids in the past decade, including Van Andel Arena, the DeVos Place convention center, the Michigan State University College of Human Medicine and the Grand Rapids Civic Theatre.
Jon Nunn, executive director of Grand Action, said those projects represent a total investment of $338 million, of which $109 million was raised privately.
Local observers say the Downtown Market provided tangible proof of confidence in the area — a confidence that, in turn, may have accelerated projects that were in a holding pattern.
The market boosted the enthusiasm of father-son development team Michael and Bob Jacobson “for developing in the area a great deal,” said Suzanne Schulz, planning director for the city of Grand Rapids. “I believe that the Downtown Market has given developers greater confidence in the projects that they are doing and, perhaps most importantly, will start to spur market-rate housing developments.”
The Downtown Market “made it a lot easier for projects to go forward,” said Sturtevant of Dwelling Place.
There’s much more heavy-equipment traffic at the Downtown Market now that construction crews from Baker Lofts have arrived. The Jacobsons broke ground ceremonially on their project two weeks ago to renovate a 125,000-square-foot vacant building diagonally across from Downtown Market into 87 apartments and about 12,500 square feet of office and retail space.
The site, formerly known as the Century Furniture Building, will become an affordable-housing project, with rents for low- and moderate-income residents ranging from $450 to $800 a month. The $28 million project should have its first unit available by April 1, with the entire building open for business by July, Michael Jacobson said.
About a 100 yards directly east of Baker Lofts, construction crews have narrowed street lanes to make way for cranes and equipment working on the $9.2 million Grand Rapids University Preparatory Academy school, which will house about 500 students in grades six through 12.
The Grand Rapids Public Schools broke ground in June on the 53,000-square-foot building, with an expected completion date next fall for all grades. The school, modeled after University Preparatory Academy in Detroit, is a public-private partnership with a lead donation of $3 million from the Steve and Cindy Van Andel Foundation and significant contributions from the Steelcase Foundation, Wege Foundation and Daniel and Pamela DeVos Foundation.
One huge question mark in the area is the fate of a 127,000-square-foot warehouse just across the street from the open stalls of the market. Dwelling Place, which owns the former Klingman Furniture Co. warehouse, has listed the property for $1.5 million for more than a year, Sturtevant said. The number of prospective buyers going through the property has been rising over the past several months, a rate that leads Sturtevant to think it will be sold in six months.
Sturtevant said his organization plans to break down walls and renovate about 122 small studio apartments in the Herkimer building to create 55 larger affordable-housing apartments. Another part of the project will construct a four-story building of 67 apartments and an office building.
About one block east of the Downtown Market, the Inner City Christian Federation completed construction on phase one of several phases to bring additional housing and retail space to the area — including a much-needed supermarket, said Jonathan Bradford, the organization’s president and CEO. The ICCF develops nonprofit affordable housing in Kent County and provides housing counseling services for communities throughout West Michigan.
Phase one is an $8.5 million project that consists of two mixed-use, three-story buildings that have retail on the ground floor and 32 apartments above.
“We were amazed at the amount of interest in these units,” Bradford said. “The buildings were fully occupied in 11 weeks.”
The ICCF is in discussions to arrange financing for four four-unit buildings that would cost about $2.4 million next to the phase one block, he said. The buildings would be constructed as townhomes, organized through a condominium association. After those are sold, the next phase would be five more four-unit buildings of a similar design.
Future phases directly west would emphasize retail, with a full-service supermarket as its centerpiece, Bradford said. The supermarket would provide the necessities of life for those living in the neighborhood and wouldn’t compete with the urban market.
Brookstone Capital, a Midland-based real estate development firm that has been involved in downtown Grand Rapids housing for years, plans to begin construction soon on a six-story apartment building just north of the Downtown Market and two six-story apartment buildings on adjacent lots.
The apartment building will be about 75,000 square feet with 48 apartments, with affordable-housing rates of about $340 to $815 a month and market rates of $900 to $1,400 a month. The three new apartment buildings will add 131 housing units to downtown.
Much of the housing demand can be traced to the influx of students locating downtown. Schulz pointed to the fact that a number of colleges and universities now have a significant presence downtown: the MSU medical school, Grand Valley State University, Western Michigan University, Thomas M. Cooley Law School, Grand Rapids Community College, Ferris State University and its Kendall College of Art and Design.
Grand Rapids has a population of more than 40,000 people pursuing college studies, Schulz said.
This article appeared in the October edition of Crain’s Michigan Business. More state and Southeast Michigan business news can be found at www.crainsdetroit.com/crainsmichiganbusiness.