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Wednesday, 25 January 2012 15:44

Battle Creek wants to deal on ‘challenging’ properties

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BATTLE CREEK — Rather than give up on some of the city’s more challenging pieces of real estate, Battle Creek Unlimited is hoping an innovative incentive program will get developers to take notice.

As building development chugged along following the investment of $85 million in the Downtown Transformation Project announced in 2008, Battle Creek Unlimited has helped the city fill 415,000 square feet of commercial and office building space, 250,000 of which was redeveloped and occupied over the last two years.

Karl DehnBCU President and CEO Karl Dehn said, looking at the last two and a half years, the rate at which projects have consumed space has been moving at a fairly good pace. However, the momentum has since slowed, and BCU has been trying to produce interest in some of the more “challenging” properties — those that need significant rehabilitation.

In an effort to jump the renovation hurdle the buildings pose, BCU has drawn up an incentive program for six of its ailing properties. Buildings will be offered to purchasers with proposals that demonstrate substantial economic impact for just the cost of title transfer. If selected, purchasers are required to enter a development agreement and deposit $10,000 into an escrow account. The money would be returned to the purchasers or put toward renovations on the building after successfully completing the development plan. A final stipulation requires purchasers to complete renovations within 24 months.

BCU initially acquired the buildings through internal operating dollars and private grants from the Downtown Transformation Project and the Kellogg Foundation. Cheryl Beard, BCU director of commercial development, said the organization didn’t realize how hard it would be to market some of the properties because of their condition.

The downtown buildings range between 7,200 and 35,000 square feet and are two to four stories. One is a freestanding structure.

Beard said some of the buildings haven’t been occupied in the last three to 15 years and many need extensive renovations including new roofs, heating and cooling systems, electrical work, plumbing and windows.

Even with the extent to which some buildings will need revitalization, Dehn said the potential of the spaces for restaurant and retail have increased significantly since the initiative began. Depending on the size and scope of proposals, some buildings could qualify for local and state building incentives as well.

“The downtown is a large employee center for retail, commercial and government employment,” he said. “There is substantial purchasing power.”

Since November 2011, Dehn said the downtown area businesses added 942 employees. With the expected addition of another $35 million in public and private investments by 2014, he believes development progress should continue to roll on.

“We’ve had quite a bit of interest,” Beard said. “About 20 users and developers have toured the properties.”

From a financial standpoint, BCU sees this as an opportunity to put buildings back on the tax rolls, filling them with people and creating new jobs.

“That’s where our return is,” Dehn said.

Read 3275 times Last modified on Monday, 13 August 2012 12:41

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