GRAND RAPIDS – The firm 616 Development is adding to its brick-and-mortar portfolio in downtown and planning to renovate a long-vacant building.
The company officially announced this morning it had acquired the dilapidated Kendall Building at 16 Monroe Center NE and plans a $4 million redevelopment, said principal Derek Coppess.
616 purchased the 122-year-old brick and sandstone landmark for $775,000 from downtown property owner James Azzar. The property was last occupied decades ago.
Coppess said he kept a close eye on the property for about two years, and not just for apartment space. He told MiBiz that the company planned to move its offices to the space, filling the entire second floor.
“We had been watching it for a long time,” he said. “Then some of the old incentives went away and made (redeveloping) it a lot more difficult, but as the new Community Revitalization Program (CRP) came back, it kind of helped us unlock it a little bit.”
The restoration includes 12 market-rate apartments, offices, and ground-floor retail to fill the 11,500-square-foot space. Ideally, Coppess said he hopes to get a bar/restaurant tenant to anchor the space and is talking to three or four prospective interests.
“We’re going to be really picky, because it’s going to be our new home,” he said. “We have a few (potential tenants) we’re talking to, but nothing in stone yet.”
None of the project’s financing hinges on signing an anchor tenant, Coppess added.
616 have contracts with First Companies for construction services and architects Lott3Metz for the building’s redesign.
Coppess plans to request a state grant under the newly adopted CRP program. 616 were among the first in the state to receive a CRP grant for the 616 Lofts project at 1 and 7 Ionia, where Grand Rapids Brewing Co. is the anchor tenant.
In 2009, Virgin Soil Development was set to redevelop the Kendall building, and the company secured help from the city’s Brownfield Redevelopment Authority, and the Michigan Economic Development Corp. invited the company to apply for Michigan Business Tax credits worth up to $500,000. The Grand Rapids Downtown Development Authority was also considering $75,000 in grants along with tax reimbursements worth up to $180,000 over 10 years. However, plans died after financing for the building’s purchase fell through.
This time around, 616 Development is requesting the Downtown Development Authority cap property taxes on the dilapidated building under the Michigan Obsolete Property Rehabilitation Act (OPRA). Coppess is going before the DDA board on Wednesday to present the project.
Having started discussion of the project with newly retired DDA director Jay Fowler, Coppess said he is optimistic about his relationship with newly appointed director Kristopher Larson. A successful track record with past projects and solid financial management through a down real estate market also gives him a leg up, he said.
“All of our preliminary meetings have been really positive,” he said. “We’re lucky to have the state and local tools to do this because without them, we can’t do these kinds of projects. This a really good purpose for that public-private partnership.”
While the building offers no on-site parking, Coppess said it’s not really a problem for the company’s development plan. With a sizeable waiting list and having previously redeveloped apartments above Flanagan’s at 139 Pearl St., which also doesn’t offer on-site parking, Coppess is confident in his company’s style and approach to infill development downtown.
Built around 1880 by William G. Robison for George Kendall, the five-story property is not on the historic register, so 616 has free rein to overhaul the building since the project doesn’t hinge on any historic preservation tax credits. However, Coppess said there are a few unique features worth restoring, including some art deco ceramic tiling, many of the original window moldings and plenty of hardware.
On the other hand, one of the first things to go is the rusted green awnings, which are planned for replacement with more historically accurate and separate canvas awnings over each door.
The building has good bones apart from two structure-bearing walls, Coppess said. The company plans to clear out the rest of the building so the construction company can start from scratch, he said.
Before any work starts on the property, the company will have to take care of some environmental contamination common with old buildings and repair some moderate fire damage, Coppess said. He speculates the cost of the work needed to rehabilitate the building probably doomed previous redevelopment plans.
If the current project proceeds, Coppess said his firm would plan to offer apartments starting at $1,000 per month for a one-bedroom or studio unit. Six one-bedroom units, three two-bedroom units and three studio units are expected to fill out the top three levels. The firm wants to convert the roof into a patio-lounge space with access for all of 616 Development’s tenants in Grand Rapids.
Coppess is also on the committee heading up the redevelopment of the Kent County Civil War Monument Park, which is right in front of the Kendall building’s front door. He said the plan for the new park includes quite a bit more green space, which he believes will significantly improve the frontage to the company’s new project.
Coppess said 616’s niche is the kind of infill properties between 15 and 30 units.
“A lot of big players don’t want to mess with small, niche development-style projects,” he said. “It’s still a complicated redevelopment market.”
The company’s five-year plan is to put a couple hundred more units downtown.
Editor’s note: This story changed from its original form. An earlier version of the story misstated the purchase price of the building and misstated that a prior developer had received state incentives.