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Sunday, 16 April 2017 12:44

Grand Rapids leaders consider new path to redeveloping public assets

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Grand Rapids leaders say they want to build economic and social equality provisions into redevelopment plans for riverfront properties like 201 Market Ave. Grand Rapids leaders say they want to build economic and social equality provisions into redevelopment plans for riverfront properties like 201 Market Ave. Courtesy Rendering

GRAND RAPIDS — As the city of Grand Rapids considers selling publicly-owned land, it hopes to use a new method of engaging would-be developers looking to redevelop the parcels. 

Mayor Rosalynn Bliss suggested it’s time for the city to evaluate its overall needs and goals as it begins exploring options for increasingly desirable properties it owns along the Grand River, both north and south of downtown. 

“I think in the past, the city has been very reactive and responded to a developer’s idea for a site,” Bliss said in an exclusive interview with MiBiz last week. “I would say in the future, we should be much more proactive and we should be identifying what the needs of the community are, what the values are. And then say: ‘This is what we see as the best redevelopment of the site.’”

Bliss’ comments refer specifically to the city’s plan to sell the approximately 15-acre riverfront site at 201 Market Ave. SW, which currently contains a wide variety of city functions as well as equipment storage. 

Bliss added that where much of the services and equipment will be moved to is still something of an open question, but the city is exploring opportunities to share space with other public entities such as Kent County and surrounding suburbs. 

In early April, the city released new information pertaining to the five responders to a Request for Qualifications (RFQ) that seeks to examine would-be developers’ overall experience and financial capabilities. The city will use that information to assist in moving the municipal functions off the site as well as meet its goals for the 201 Market property, which includes mixed-income housing, equitable job opportunities and public greenspace. 

“As we look at a development of this scope and scale, what can we do to make sure that there is connectivity to the parts of our city that are in need of apprenticeships and mentorships and jobs?” Bliss said. “I think we were pretty clear in the RFQ that there has to be mixed housing types, mixed income. … And then access to greenspace — that’s an equity issue — and access to the river. I think you’ll see those elements in this project.”

The RFQ responders included Indianapolis-based Flaherty & Collins Properties, Southfield-based REDICO LLC, Grand Rapids-based Rockford Construction Co. Inc., West Bloomfield Township-based The Velmeir Companies, and Wilmington, N.C.-based Zimmer Development Co.

ADDRESSING CHALLENGES

The 201 Market site represents both challenges and opportunities for the community, according to a group of visiting land-use experts from Washington, D.C.-based Rose Center for Public Leadership. In a session last month, the Rose Center fellows suggested that redevelopment of the site offers an opportunity for the city to focus on “equitable” development, particularly given the fairly lengthy timeline before the site would be open to public or private uses.

An exact timeline for any redevelopment work on the site remains unclear. However, Bliss said that once a development group is selected, the city could likely be off of 201 Market in six to 12 months. 

A key challenge for the various stakeholders within the 201 Market redevelopment is defining equity goals. Sources noted that city leaders and others involved in the would-be project can’t solve every issue, so highlighting a handful of measurable goals and benchmarks makes for a priority. 

“We’re lucky we’re a growing city,” said Kris Larson, president and CEO of Downtown Grand Rapids Inc. (DGRI) and a committee member who will evaluate the RFQ responses and ultimately help to pick a developer. “With growth comes some real opportunity to address inequality, inequity, disparities. Where can we harness the power of growth and the positive impacts it produces to be able to address some of the systemic issues? I think we really want to explore that space.”

Larson and other commercial real estate sources contacted for this report acknowledge that defining goals for the site is one of many challenges for development on the 201 Market site, or any other publicly-owned sites the city may look to sell in the future. 

A variety of infrastructure and utility issues on the Market Avenue site could prove costly for developers, sources said. Relatedly, identifying incentives for any project remains a topic of discussion, according to stakeholders. 

“I think it’s very likely we’ll utilize some incentives for that site. I’m not sure what those are just yet,” said Bliss, who noted that the best use of incentives has become a divisive issue for the Grand Rapids City Commission. “But I do think it’s an opportunity. Depending on what the final proposal is — even based on the housing and housing types and whether there’s low income — potentially we could use a number of different tools for that site.”

To that end, one common tool for redeveloping urban sites in need of environmental remediation may be available for a developer at 201 Market, but in a somewhat diminished capacity. 

The 201 Market RFQ states the Brownfield Redevelopment Financing Act — which allows for capture of incremental tax revenue growth on eligible sites — would first be utilized by the city to bridge any costs between sale of the land and moving of public facilities and infrastructure. 

EXPLORING OPTIONS

While elected officials and other stakeholders were quick to discuss long-term visions for redeveloping 201 Market or other city-owned riverfront sites, the development community remains mum on what it might consider for the sites.

Attempts by MiBiz to obtain more details on the plans of the five RFQ responders for the 201 Market site were unsuccessful as this report went to press. 

One commercial real estate source said it could be hard for any developer to create a viable project in the city given the city’s expectations related to inclusion of affordable housing, site challenges and other uncertainty over incentives. 

At least one Grand Rapids-focused developer said he understands the city’s position when it comes to setting terms for developers who wish to redevelop public assets, particularly given the current high demand in the region. 

“The city (in the past) has been, ‘take it as it comes,’ because a lot hasn’t been coming,” said Sam Cummings, managing partner at Grand Rapids-based real estate development and property management firm CWD Real Estate Investment Inc. “For many years, there wasn’t a lot coming. I think people need to remember that it wasn’t that long ago that most of the historic buildings in downtown Grand Rapids were vacant. It’s really been in the last 10 or 15 years that’s changed.”

The city’s mayor couldn’t agree with Cummings more. 

“I think that’s where the shift will be,” Bliss said. “We’ll do more work on the front end and more of an RFQ or RFP process instead of just responding to a proposal that comes to us.” 

Read 3700 times Last modified on Thursday, 13 April 2017 21:38

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