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Friday, 15 September 2017 12:39

616 Development turns to mixed-income housing to move delayed projects forward

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A project at the Kregel Building at 759 Wealthy St. SE will feature 63 total residential units, with 37 of them being reserved for people earning 60 percent of the Area Median Income (AMI). The building also will offer 12,445 square feet of ground-floor commercial space. A project at the Kregel Building at 759 Wealthy St. SE will feature 63 total residential units, with 37 of them being reserved for people earning 60 percent of the Area Median Income (AMI). The building also will offer 12,445 square feet of ground-floor commercial space. COURTESY RENDERING

GRAND RAPIDS — Two previously announced mixed-use projects from 616 Development LLC appear to be moving forward, albeit with significant changes.

The City of Grand Rapids’ Fiscal Committee and the City Commission earlier this week approved the firm’s two requests for payments in lieu of taxes (PILOTs) for stalled projects in the city’s East Hills and Creston neighborhoods.

The developer announced the project at 759 Wealthy St. SE in the so-called Kregel Building in the East Hills neighborhood last August. It first detailed plans for the Creston development in October 2014, as MiBiz first reported.

The two projects appear poised to move forward, but now with the inclusion of mixed-income housing components, as well as senior housing for the Creston project at 1359 Plainfield Ave. NE., according to documents filed with the city.

The projects mark a shift out of market-rate housing for 616 Development, a move that founder and CEO Derek Coppess said he’s long sought to make.  

“That’s my obsession right now is figuring out this workforce housing,” Coppess said, referring to a housing type geared for people who make too much to qualify for low-income housing, but not enough for most new market-rate units. “The city obviously, has made that a big priority … figuring out this missing middle, this workforce gap.”

Mt. Pleasant-based W.S. Development Corp. will serve as the developer for the two projects, working in conjunction with 616 Development and PHRC LLC. Both projects will be owned through limited partnerships, according to the documents.

For its Wealthy Street redevelopment, the developers plan 63 total units with 37 of them being reserved for people earning 60 percent of the Area Median Income (AMI). The building will offer 12,445 square feet of ground-floor commercial space.

The developer expects the Wealthy Street project to cost $10.9 million, with about $4.6 million coming from Low Income Housing Tax Credits (LIHTC).

For the $13.9 million Plainfield Avenue project, the developer plans 85 total units, with 51 restricted to seniors earning 60 percent of the AMI. The four-story, new-construction building will also contain 16,600 square feet of ground-floor commercial space.

Coppess said the partnership plans to apply in October for the next round of the competitive LIHTC, adding that the two projects have scored well based on criteria set by the Michigan State Housing Development Authority (MSHDA), the state agency that administers the federal tax credits.

Another proposed 616 Development project — planned for the southeast corner of Plainfield Avenue and Quimby Street, also in the Creston neighborhood — will remain focused on market-rate apartments, Coppess said, noting further details on that site would be made available in the coming weeks.

The movement on the Creston and East Hills projects comes just months after 616 Development went through a significant reorganization that resulted in it scaling back its staff and forging a partnership with Mt. Pleasant-based real estate management firm KMG Prestige Inc., as MiBiz first reported in June.

KMG Prestige has been helping 616 to ramp up its back-office support and will provide property management services for 616 Lofts projects.

The partnership has allowed Coppess to be “back in the driver’s seat” and primarily focus on his preferred development work.

“It’s fun getting back to the creative side of the business,” he said.

 

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