MUSKEGON –– It’s taken years, but demand for rental residential units in downtown Muskegon appears to be on the upswing.
Jon Rooks, principal with Parkland Properties LLC, hopes that HighPoint Flats project, which has been in the making for 10 years and is projected to be ready for residents in June, serves as the “market maker” for the central business district in the lakeshore city.
“I invested more than I planned, but I happily did it,” Rooks said of the approximately $9 million, nine-story market-rate apartment and commercial project at the corner of 1st Street and Western Avenue.
Rooks has held the former Hackley Bank building for about a decade, despite several attempts to sell it. The redevelopment project has come in a series of fits and starts.
“Ten years ago, I would have worried about people living here. Now there’s no question,” Rooks said.
With its 47 apartments offering a wide range of amenities, including a rooftop patio and views of Muskegon Lake, HighPoint Flats is part of a small wave of market-rate apartment projects in downtown Muskegon, with more on the way.
The Amazon Apartments building is in the process of switching from affordable housing to market rate, and just up the street from HighPoint Flats, developers Chris Benedict and Josh Canale are building the six-story Lake View Lofts, a mixed-use facility that’s set to include 20 apartments. Portage-based The Hinman Co. also is building apartments on the top floors of its Terrace Plaza office building.
“(HighPoint Flats is) a market maker, but we’re pleased to see others investing,” Rooks said, noting that there’s about $80 million worth of development within blocks of the building.
Those blocks have also seen a ramp-up of restaurants, breweries, distilleries and some other small retail in recent years.
Longtime downtown Muskegon advocates like Christopher Kelly, a shareholder and co-manager of Muskegon-based law firm Parmenter Law, said the investments in the city are starting to pay off.
“It’s turned the corner, I know it’s really turned the corner,” Kelly said of the flurry of activity in downtown Muskegon. “There’s not much land left and I think it will fill up easily at this point, and you’ll see the downtown completed in the next few years.”
MORE DEVELOPMENT TO FOLLOW
The HighPoint Flats project offers many of the standard amenities common in modern, high-end apartment buildings, but it also has one unique feature in the form of tax benefits. Rooks secured a Renaissance Zone designation for the property, which provides state and local tax abatements for tenants through 2023.
Rooks’ development companies were prolific users of the tax incentive in many projects in and around downtown Grand Rapids in the early and mid 2000s.
“The Ren Zone has a huge impact in spurring interest and success of new projects in emerging markets,” Rooks wrote in a follow-up email to MiBiz. “Essentially, the Ren Zone kick-starts the establishment of a new downtown market-rate apartment market, which Muskegon is establishing right now.
“There is clear evidence of demand now, but this program rewards the early residents and pioneers of downtown living, while downtown’s success evolves around them.”
Under the Renaissance Zone program, the more money you make, the more you save in rent. A tenant earning $160,000 per year only pays $650 per month for an apartment that would otherwise rent for $1,350 per month, according to Parkland Properties.
While the HighPoint Flats project has been a decade-long labor of love for Rooks, he’s already got more planned for the downtown Muskegon area.
The developer recently began and will continue to ramp up a renovation of his Holiday Inn-Muskegon Harbor hotel at the corner of Western Avenue and 3rd Street. That renovation coincides with plans from the the City of Muskegon, Muskegon County and a variety of partners pushing forward with a downtown convention center.
Rooks also said he envisions more development in the largely vacant blocks between the core business district of downtown Muskegon and the Muskegon Lake shoreline — as well as on the shores themselves — as stakeholders continue to embrace the waterfront as a form of economic development.
Ultimately, Muskegon is following a similar pattern of development that Grand Rapids has experienced in recent years, he said.
“The entertainment drives residential, which drives more entertainment, which eventually leads to retail,” Rooks said. “There’s more happening in Muskegon than anywhere on the lakeshore.”
MiBiz reporter Marla Miller contributed to this report.