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Sunday, 28 May 2017 16:10

Kent County again weighs selling downtown GR office building

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The Kent County-owned office building at 82 Ionia Ave. NE has garnered multiple private-sector offers after the county twice put out requests for bids on the facility. However, county officials say they have yet to decide if the county wants to sell the 108,000-square-foot building. The Kent County-owned office building at 82 Ionia Ave. NE has garnered multiple private-sector offers after the county twice put out requests for bids on the facility. However, county officials say they have yet to decide if the county wants to sell the 108,000-square-foot building. Photo by Joe Boomgaard

GRAND RAPIDS — With three offers on the table to acquire its under-utilized downtown office building, Kent County officials now have a decision to make: whether to actually sell the facility at 82 Ionia Avenue NW. 

The county has assembled a subcommittee consisting of Kent County staff and three elected commissioners to examine the positives and negatives associated with potentially selling off the 108,000-square-foot building.

Doing so would mean relocating staff to existing county facilities, most likely at the main 77-acre county-owned campus at Fuller Avenue and I-196 in Grand Rapids, according to Al Jano, Kent County’s facilities management director. The county also would likely need to construct a new building, as existing facilities couldn’t accommodate all the staff currently working out of 82 Ionia. 

“We’re not even close,” Jano said of the county’s ability to absorb staff in existing facilities for anything more than a short-term basis. “We’re a big county, this is the list of buildings and we’re not even close.”

According to county documents, 269 employees from five departments work in the 82 Ionia building. 

A subcommittee is expected to offer a formal recommendation to the Finance and Physical Resources committee in the coming weeks, who would then vote on whether to send it to the Kent County Board of Commissioners.

The county solicited bids for the property — even though it was unsure whether it was prepared to sell the building — because officials wanted to get an idea of how much revenue a sale could bring, according to spokesperson Lisa LaPlante. 

“We thought, ‘Let’s just put it on the market and we’ll go from there,’” she said. 

Much of the decision to pursue a possible sale of the building came after the county commissioned a space needs study, which was completed in 2015. The study — performed by Grand Rapids-based architecture and engineering firm Progressive AE — suggested that the 82 Ionia facility, situated in the middle of a growing downtown and with onsite parking, should be vacated and sold to private developers. 

Jim Horman, a principal with Progressive AE who worked on the space needs study with Kent County, told MiBiz he’s not specifically aware of where the county currently stands with regards to its capacity. At the time of the study, he believed that 82 Ionia workers could likely be absorbed into existing facilities. 

“The county has a lot of quality buildings to migrate departments into,” Horman said. “With that, they have all kinds of opportunities within their existing buildings. They could strategically move these departments so that they’re situated with other departments to offer synergies.” 

Horman added that ultimately, the decision of whether to build a new building in order to absorb Kent County workers would rest with the elected county commissioners. 

To that end, at least two of the commissioners on the subcommittee have expressed apprehension at the notion of taking the proceeds from a sale of 82 Ionia and constructing a new building. 

While not ruling out the possibility of voting for a new facility, Commissioners Roger Morgan and Jim Talen both said they’d need to see a thorough analysis of the potential cost to update 82 Ionia versus building new, a cost that remained unclear as this report went to press. County staff agreed with this request. 

“I’m not afraid of spending money for infrastructure and sustainability,” said Morgan, who represents many of the northern Kent County townships and villages. Morgan said he’d be hesitant to vote in favor of new construction if existing space can be utilized. 

Regardless of what course of action the county will take with 82 Ionia, this is actually the second time officials have sought bids on the building. 

Last July, the county selected Kendall College of Art & Design of Ferris State University’s $10 million offer as the winning bid for the facility after receiving two other proposals. However, Grand Rapids-based KCAD backed away from its plans to redevelop the facility, stating the building would not allow for the kinds of renovations needed to make it feasible for student housing, as MiBiz reported at the time.

This time around, the building garnered interest from three different private development groups. 

Jenison-based nonprofit affordable housing developer West Michigan Housing Alliance came in as the high bidder at $10 million, while Grand Rapids-based Rockford Construction Company Inc. offered a little over $7 million. Naperville, Ill.- and Grand Rapids-based Franklin Partners LLC offered $3.4 million.

County officials said in the subcommittee meetings that they’ve yet to perform any significant due diligence on the bids, but they did note that they’ve moved away from the low bid from Franklin Partners. 

Additionally, Assistant County Administrator Mary Swanson noted that the actual sale price would be just under $8 million based on the terms offered in the West Michigan Housing Alliance bid. 

Rockford Construction’s bid offered the most straightforward terms if the county opts to sell the facility, Swanson said. 

Future uses of the building remain unclear, as the would-be developers largely kept their plans under wraps. 

Only Jeffrey Dombrowski, principal with the West Michigan Housing Alliance, offered details, telling MiBiz that the building would be redeveloped into 110 “workforce” housing units, geared to people earning between 60 percent and 80 percent of the area median income (AMI). 

Dombrowski’s development group also has the nearby Keeler Building at 56 North Division Ave. under option with plans to redevelop the building into affordable housing and ground-floor commercial space. 

“We love the building and the site,” Dombrowski said of the county-owned 82 Ionia building. “The county has done a wonderful job maintaining the structure.” 

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