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Tuesday, 06 October 2015 12:54

Spectrum Health to move 500 employees to downtown Grand Rapids office building

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25 Ottawa 25 Ottawa PHOTO: Nick Manes

Spectrum Health plans to move up to 500 employees to 25 Ottawa Ave SW., a six-story office building that’s being renovated in downtown Grand Rapids’ Arena South neighborhood, MiBiz has learned.

According to a memo filed with the Grand Rapids Parking Commission, Spectrum will consolidate employees from two offices located at 60th Street SE and Broadmoor Avenue and at Leonard Street and East Beltline Avenue.  

The building’s owner and developer, Franklin Partners LLC confirmed the news to MiBiz.

Spectrum will take floors two through six, about 80,000 square feet, said Don Shoemaker, principal at Franklin Partners. The first move-in phase will begin on Nov. 1 and the second phase on Jan. 1. The employees moving to the downtown office work in the organization’s I.T. department, Shoemaker said.

The primary driver for the move, Shoemaker said, was Spectrum Health seeking a high-amenity, urban location.

“People at Spectrum thought of it as more than an office building,” Shoemaker said. “They saw it as part of a recruiting tool.”

[RELATED: Reporter’s Notebook: Spectrum Health’s new downtown I.T. office highlights mobility options]

Requests seeking comment from Spectrum Health were not immediately returned.

Because the building at 25 Ottawa has minimal on-site parking, Spectrum Health plans to use a parking cash-out program, according to the memo.

Organizations such as Downtown Grand Rapids Inc. (DGRI) use a similar program where the company supplies its employees a parking spot in a city-owned ramp but those employees can opt out of the spot and receive an equal cash reimbursement. It is then up to the employee to decide how to get to work.

In the case of Spectrum, it appears the organization will not offer any free parking to its employees, but rather seeks to take advantage of the cash-out program to allow individual employees to opt into city-owned parking at a discounted, business rate.

Spectrum employees who choose to use the cash-out program will have the option to receive a discounted, business rate at one of four city-owned, downtown parking ramps.

“(P)arking cash-out is an effective method to reduce auto congestion and parking demand, and is a program the City wishes to support,” Pam Ritsema, managing director of enterprises services for the city, wrote in the memo. “This is the first business unit that Spectrum is cashing out of parking. Both Spectrum and the City will monitor the parking demand relative to the total employment group and results will inform development of future City and DGRI incentive programs.”

The Parking Commission meets to discuss Spectrum Health’s request on Thursday, Oct. 8. At that time, the commissioners will also discuss similar requests for the proposed Venue Tower development next to The B.O.B. as well as a request from an unnamed insurance company looking to lease space in 99 Monroe, another downtown office building owned and managed by Franklin Partners.

Franklin Partners acquired 25 Ottawa early last year for a reported $6.18 million. Since then, the firm invested approximately $3.5 million in renovations. The Illinois-based investment and property management firm has been in an acquisition mode in and around downtown Grand Rapids in recent years, purchasing or bidding on a number of buildings in the area, commercial real estate sources said.

Its first downtown acquisition was for 99 Monroe, which is nearly 100-percent leased after an extensive renovation project, as MiBiz previously reported.

The 25 Ottawa building is considered “Class A” office space. Typical rents for Class A space in downtown Grand Rapids rent for $21 to $22 per square foot, triple net, sources said.

Franklin Partner’s Shoemaker also mentioned that DGRI’s president and CEO Kris Larson played a significant role in attracting not only Spectrum Health to 25 Ottawa but also advisory firm KPMG LLP and a yet-to-be announced insurance agency to 99 Monroe.

“All (three companies) had a similar mindset,” Shoemaker said. “They’re looking to hire millennials and they liked the feel and the amenities we do.”

This story has been updated to include comments from Franklin Partners principal Don Shoemaker

Read 5872 times Last modified on Monday, 12 October 2015 12:42
Nick Manes

Staff writer

[email protected]

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