Orion Real Estate Solutions, the development arm of Grand Rapids-based general contractor Orion Construction Co. Inc., remains one of the most active developers in the market. The firm plans to open about 550 market-rate apartments in early 2017. Orion Real Estate President John Wheeler and Orion Construction President Roger Rehkopf spoke with MiBiz about their outlooks for the industry in 2017.
How do you see politics at the local level playing out in the coming year?
Wheeler: I think at the city, you’ve got a freshman city commission that is really good. Rosalynn (Bliss) has been a commissioner for eight years and now she’s the mayor. We’ve got some great city commissioners. They don’t want business as usual.
What do you mean by that?
Wheeler: They want neighborhood improvements. I think that opens up the scope for private developers to go in and do some things in neighborhoods — as long as they get neighborhood support. Things like small retail centers, maybe some small entertainment centers. Before, you had to go to just (one) neighborhood, like Eastown. Now Fulton Heights is saying we want some of that stuff. Same with the near west side. I think you’ll see a lot more collaboration in the 32 neighborhoods.
The recent Grand Action report called for the DeVos Place Convention Center to expand, but there seem to be few options to do so. How do you see that playing out?
Wheeler: My crystal ball tells me that the city and the county are going to relocate off of Calder Plaza — certainly the county will. If they’re going to expand the convention center, the county has to move, because the post office ain’t moving — not yet. The county only has three stories there, and they have so much excess space.
What do you think Kent County will do?
Wheeler: I’m saying they’ll flip the keys to that three-story building and say to the Convention Center Authority, ‘Put the 120,000-square-foot addition here and put a sky bridge over to DeVos Place.’ Now the city isn’t in as bad a shape. They just reglazed (City Hall) and they’ve done some things to the building. They don’t own anything else except 201 Market and they’re trying to dump it. They’re not going to move down south. I’d say there will be some public-private partnerships stemming from the lack of available real estate downtown, and that’s going to be county properties.
Kent County has expressed interest in moving the Road Commission off its current riverfront site on Scribner Avenue NW. What kind of opportunities does that present?
Wheeler: They gave me tour of that and asked what it was worth and I said, ‘Nothing to me.’ I’m not going that far up — I’m too old — but somebody will. The city and the county are getting along better than they ever have in my tenure here. There used to be quite a bit of polarization between the two. Not anymore. Now it’s like one vote. If you say, ‘We’re going to do this together,’ it’s OK. That’s a big plus for the future of our city.
What do you think are the major drivers of that?
Wheeler: I don’t know if that’s the Metro Council … pulling everyone together now or if they’re just younger people. Twenty years ago, the average age was older than me. Now they’re in their 30s, 40s and 50s. They think different. They think about getting things done. I like that a lot. I’m more optimistic about Grand Rapids than I ever have been. I feel like there’s no barrier to entry for good development.
What’s happening on the construction side?
Rehkopf: The sub-contractor market is actually pretty good. Some of the tension has gone away. Everyone was just so busy that they couldn’t figure out how to get all this done. I think things have calmed compared to six months or a year ago.
Is that because they’re less busy or they’re finding people to bring on?
Rehkopf: I think it’s a little bit of both. I think back in the recession times, people got lackadaisical. Then when things ramped up, they never got that energy back.
Wheeler: Or the fear. The banks called all their lines of credit. It was scary as hell.
Rehkopf: I’d say a lot of people who left when there was no work, now they’re coming back. We’re trying to hire in more supervision roles, quality assurance roles.