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3 developers bid on Kent County-owned downtown Grand Rapids office building

BY Sunday, May 07, 2017 08:00pm

GRAND RAPIDS — Kent County received three wide-ranging bids earlier this week for its 104,000-square-foot downtown office building at 82 Ionia Ave. NW.

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.

Only one of the development groups opted to share specific details of their plans for the building.

Jeffrey Dombrowski, principal with West Michigan Housing Alliance, said his group would redevelop the building into around 110 “workforce” housing units, targeting residents earning between 60 percent and 80 percent of the area median income (AMI). The plans also include ground-floor commercial space.

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

Dombrowski added that converting the building from an aging municipal office facility into housing would require a significant investment, “but is very doable.”

The other development groups were more hesitant to share details regarding potential uses of the building.

Rockford Construction executives say they’re still evaluating several potential options for the building. A Franklin Partners executive declined to comment for this report.

Kent County officials say they’ll assess the bids based on multiple factors including, but not limited to financial considerations, terms and conditions, and timing issues, according to Communications Director Lisa LaPlante. The county wants to ensure a smooth transition for its staff currently working in the building and for the buyer, she said.

Some of the bidders mentioned being open to possible sale leaseback deals involving the county.

The county has no specific timeline for announcing the successful bidder, LaPlante added.

Kent County began seeking proposals nearly two years ago after a study conducted by architecture firm Progressive AE found the local government was under-using the building and that the four departments housed at 82 Ionia could easily be absorbed in other county-owned facilities.

Last July, Kendall College of Art and Design backed out of a $10 million bid to acquire the building, stating that the facility would not allow for the kinds of renovations needed to make it feasible for student housing, as MiBiz reported at the time.

Franklin Partners and Airmont, N.Y.-based The Embassy Group Acquisitions LLC bid on the building at that time as well, offering $6.8 million and $6.5 million, respectively.

Regardless of which bidder is ultimately successful, a redevelopment of the 82 Ionia building would add to the rush of activity in the area and for all of the bidding parties.

A subsidiary of the West Michigan Housing Alliance currently has the nearby Keeler Building at 56 North Division Ave. under option with plans of developing affordable housing and ground-floor retail on the site. Franklin Partners previously had the building under option but decided against moving forward with a project, as MiBiz previously reported.

Dombrowski from West Michigan Housing Alliance told MiBiz on Friday afternoon that having the two buildings in such close proximity would allow for significant efficiencies in terms of property management and other services.

For its part, Franklin Partners is currently in talks to build an office tower on a surface parking lot south of Van Andel Arena as part of a mixed-use entertainment district.

Meanwhile, Rockford Construction redeveloped the Morton House building across the street from 82 Ionia. The Morton is now market-rate apartments with retail and office space. The construction and development firm recently began demolition of several buildings along Bridge Street west of downtown Grand Rapids as part of a large-scale mixed-use development set to bring apartments, office and retail to the area.

Rockford Construction was also one of five development groups to respond to a request for qualifications from the city of Grand Rapids as part of a process to redevelop a publicly-owned 15-acre site along the Grand River on the south end of downtown.

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