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Sunday, 20 August 2017 10:30

West Michigan industrial developers embrace new uses

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Crews work to clear ground for an expansion of the Fort Custer Industrial Park near Battle Creek. Crews work to clear ground for an expansion of the Fort Custer Industrial Park near Battle Creek. Photo by Nick Manes

Spurred on by the dearth of available manufacturing space across West Michigan, developers have started to add inventory in the region by building or expanding industrial parks.

But rather than featuring just a sea of drab factory buildings, many of the new industrial parks increasingly are filled in part with non-traditional users. These days, the large modern manufacturing and warehousing facilities are likely to be paired with hotels, restaurants and other retail users that can capitalize on the traffic, as well as act as a draw for the industrial tenants themselves.

Take for example Southwest Michigan’s Midlink Business Park in Comstock Township near the intersection of I-94 and Sprinkle Road just south of Kalamazoo. The 340-acre industrial park with more than 1.5 million square feet of existing industrial real estate now plans to embark on a second phase of development. The expansion will offer another 150 acres for development, including as much as 50,000 square feet for retail and restaurant space, according to David Smith, president of Midlink Business Park, which is owned by Los Angeles-based Hackman Capital Partners LLC, a private real estate investment firm.

“We’ve got almost 1,500 people per day that touch that 340 acres,” Smith said. “Some are just driving through, and we’ve got significant traffic counts (on Sprinkle Road). That’s substantial. Our goal is to continue to build that dynamic park environment that we’ve been working on for 15 years. We think if we can get this retail rounded out, that only makes it more attractive to more users.”

About 15 miles to the northeast, Joe Sobieralski sees similar demand for restaurant and retail services in close proximity to Battle Creek’s Fort Custer Industrial Park.

The president and CEO of Battle Creek Unlimited, an economic development agency, said the park has about 60 acres of new, shovel-ready sites with one unnamed manufacturer under contract to take 27 acres.

Sobieralski said they’ve not yet reviewed proposals to bring other services to the park, but it’s a likely step in the future given the growth of Fort Custer.

“When the park was established, it was zoned just to keep it a pocket of industry,” Sobieralski said. “But now that it’s grown to 13,000 employees, it’s kind of become a food desert. There’s not a lot of places to eat where you can get really quickly. That’s something we’ll probably explore in the coming future.”

In Walker at Rockford Construction Co. Inc.’s Walker View Industrial Park at I-96 and Walker Avenue, an unspecified hotel user has acquired about 2.5 acres of property for an on-site hotel. The industrial park also includes a 340,000-square-foot facility for FedEx Ground Distribution Inc. and will serve as the future home for the Kent County Road Commission.

Multiple other users have contracts for another 30 acres at the park, according to Mike Mraz, managing partner of real estate development for Rockford Construction.

OPINIONS DIFFER

However, not all developers believe that adding service providers to industrial parks makes sense.

Don Shoemaker, principal with Franklin Partners LLC, a Grand Rapids- and Oak Brook, Ill.-based real estate development and property management firm, hopes to attract one or more heavy manufacturers to Site 36 Industrial Park, the 92-acre site of the former General Motors stamping plant located along 36th Street SW in Wyoming.

At least one hotel developer has expressed interest in the four-acre parcel Franklin Partners has across the street from the main industrial park, according to Shoemaker, who said the parcel could also work for retail or restaurant uses.

However, the concentration of commercial and hospitality businesses on nearby 44th Street and Clyde Park Avenue, coupled with the city of Wyoming’s goal to attract well-paying manufacturing jobs to Site 36, has Shoemaker believing the site’s highest and best use will remain as industrial land.

“I don’t think it makes a difference in attracting an employer to the site, but it’s something we’d put on the brochure as an amenity,” Shoemaker said of adding non-manufacturing users at the site. “I’m not sure adding amenities to our park really matters.”

NEED FOR SPACE

While they may lack consensus when it comes to  adding amenities to traditional industrial parks, sources agree the region needs more quality manufacturing space across the board.

It’s an observation supported by data from various brokerage firms, which report industrial vacancy rates hovering as low as 5 percent around West Michigan. In turn, that’s pushing buyers and sellers to “off-market deals,” which have become a driver for activity in the industrial market, according to a recent report from the Grand Rapids office of Colliers International Inc.

“There’s just no real available Class A quality space that’s out there,” said Smith from Midlink Business Park. “A lot of stuff that shows up in (vacancy rate) statistics will always be vacant because it’s just not habitable product or it’s Class C or D product.

“It’s a tight market. We think there’s some opportunities for us to continue to be successful with smaller multi-tenant and larger single-tenant or larger multi-tenant (projects).”

Sobieralski with Battle Creek Unlimited tells a similar story with regards to the Fort Custer Industrial Park. The park only has one truly vacant building, he said, adding that the majority of growth in the Cereal City area stems from businesses in the automotive supply chain.

Even as the automotive industry has plateaued, the supplier network in the region continues to find itself busy, according to Sobieralski.

“Our sweet spot will be that supplier network,” he said.

Somewhat differently, the proposed Site 36 Industrial Park in Wyoming has received interest from a broad group of potential users, according to Shoemaker with Franklin Partners. So far, the company has talked with unspecified food processors, steel firms and other “specialty” manufacturers.

Franklin Partners also marketed the site to Taiwanese contract electronics manufacturer Foxconn Technology Group, but Shoemaker said the company ruled out Site 36 because it was too small for its needs.

Foxconn, which makes parts for iPhones and other consumer electronics, has said publicly that it plans to build a large facility in Wisconsin and is considering a research and development facility in Michigan, according to various media reports.

While Foxconn may be out of the picture for the former GM stamping plant site, Shoemaker said numerous users are all prepared to take around 150,000 square feet on the site, and some larger users remain interested as well.

“The perception was that the site wasn’t developed because (Wyoming) only wanted a million-foot, LEED-certified advanced manufacturer,” Shoemaker said. “The reality is they want good jobs for the city of Wyoming, period. They’re not hung up on size anymore. I have complete confidence that when we get (a user) on the hook, they’ll be blown away by how fast the city mobilizes.”

 

Walker to improve traffic access near industrial park

WALKER — To ease the flow of traffic to the Walker View Industrial Park and the nearby Meijer Inc. corporate campus, the city of Walker is working with the state to shift the eastbound off-ramp on I-96 at Walker Avenue.

The move will align the off-ramp with Holton Court, some 50 yards south of the exit’s current location, on property donated by Meijer for the road right-of-way. The new intersection also will feature traffic lights, which the current intersection lacks.

Late last month, the Walker City Commission voted to award Grand Rapids-based Kamminga & Roodvoets Inc. a $673,000 construction contract for the project, which has an estimated total cost of just over $1 million. The state is providing a $626,200 grant to Walker, which is applying $100,000 from a Walker View escrow account for transportation improvements toward the project, according to the authorizing resolution that passed unanimously in September 2016.

Plans also call for a right turn lane to be built on Walker Avenue into Holton Court “to assist in the increased traffic flow to the existing and future commercial uses in that area,” according to city documents. Meijer is paying the $37,000 construction cost for the turn lane “to support eventual development of the land east of Walker Avenue” that it owns through an affiliate.

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Nick Manes

Staff writer

nmanes@mibiz.com

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