GRAND RAPIDS — The efforts of one nonprofit organization in transforming a key Grand Rapids neighborhood has attracted another like-minded group to plant roots and help be part of the area’s revitalization.
As Dwelling Place continues with its plans to renovate the historic Herkimer Hotel on South Division Avenue, its adjacent new construction has secured an anchor tenant.
Pine Rest Christian Mental Health Services is expected to fill the 15,000-square-foot first-floor commercial space in the new building being built in the area of an existing parking lot. The new facility will connect to the historic hotel.
“This (new space) gives us a very strong presence downtown and will help us serve the public sector,” said Allen Jansen, corporate director for community and residential services at Pine Rest. “We also plan to become more involved in business and political issues in the neighborhood and bring what we can to the table.”
Pine Rest currently leases several building in the surrounding area near Dwelling Place and wanted to consolidate its services under one roof, Jansen said.
The organization chose the new location because of its close proximity to the population it serves, while also realizing an opportunity to gain some efficiency, Jansen said.
Pine Rest’s downtown services include case management for adults with mental illness and a Michigan prisoner re-entry program. The organization recently started a new program, Street Reach, which seeks to help homeless adults suffering from mental illness.
The organization wants to be a strong advocate for the individuals it serves and increase the dialogue around real issues affecting the area, he said.
Pine Rest also expects to add additional staff with the move.
Dwelling Place, an affordable housing services provider, lent support services to Pine Rest for its Street Reach program, and saw offering a lease for the new space as a logical next step, said Dennis Sturtevant, CEO at Dwelling Place.
In 1994, Dwelling Place acquired the former Herkimer Hotel and completed a $5 million renovation of the building following historic renovation standards. Now the company is revisiting the apartment complex with updated plans that include six revamped commercial spaces along Division Ave., a parking structure and infill green space in addition to an entirely new apartment building.
While the project was originally reported to cost $10 million, the real construction cost is roughly $20 million with a total development cost of about $30 million.
The project includes several layers of financing with $25.4 million in investor equity coming from the Lansing-based Great Lakes Capital Fund, $2.4 million from the Michigan State Housing Development Authority, $657,089 from the City of Grand Rapids and $50,000 from the U.S. Department of Housing and Urban Development.
Dwelling Place’s contribution to project is $500,000, and it expects to receive another $2 million in support from philanthropic contributions.
The project is also in the process of securing $1 million from the Federal Home Loan Bank of Indianapolis. If that financing falls through, Sturtevant said he hopes to make up for it in philanthropic dollars.
The organization has also secured historic preservation credits and low-income housing credits for the project.
There is still a lot of paperwork to do, but Sturtevant said the project should break ground sometime next month. Once construction starts, the renovation and the new construction could be complete in as little as 12 months, he said.
“During the heyday of the neighborhood, single-family homes and businesses were all along Commerce Street and basically what we’re doing is putting buildings back,” Sturtevant said. “The opportunity to really address an entire city block is pretty exciting, and helping fill in all the holes should be a huge improvement.”
The money being invested south of downtown Grand Rapids — including at the new Downtown Market — is drawing business farther south along the Division Avenue corridor. By increasing the residential density in what he calls reverse integration, Sturtevant hopes to draw more high-income and middle-income people to Grand Rapids’ Heartside District. With more people in the neighborhood, the area will realize more opportunities for retail business, he said.
Rockford Construction is the general contractor on the project for Dwelling Place. DTS-Winkleman served as the architectural design firm.