GRAND RAPIDS –– The Grand Rapids Downtown Market continues to restructure long-standing debt tied to a state economic development incentive as it attempts to stabilize its finances.
Executives said they’ve worked closely with the Michigan Economic Development Corp. (MEDC) and the Michigan Strategic Fund to ensure they’re ultimately positioned for success in that endeavor.
On Tuesday morning, the MSF board approved a request by Downtown Market affiliate Grand Rapids Downtown Market Holdings LLC to “amend or replace” its Michigan Community Revitalization Program (CRP) loan agreement.
Under the new agreement, the Downtown Market extended the amortization period of its $3 million loan and reduced its annual interest payment from 2 percent to 1 percent, allowing it to pay about $116,000 annually rather than about $260,000.
Tuesday’s approval by the MSF board makes for the fifth amendment to the Market’s agreement with the state, following action as recently as January, as MiBiz previously reported.
Executives at the MEDC say that the Downtown Market has helped to revitalize the southern end of downtown Grand Rapids, which was part of their original intent with the project and now they want to continue their support.
“We want to be part of the reason why the market is successful,” Greg Tedder, executive vice president and chief community development officer with the MEDC, said on a conference call with reporters on Tuesday morning. “We don’t want to be overly burdensome. We want to be part of that success story.”
Last month the Market announced that it had raised capital to pay off a quarter of its $4 million loan from Fifth Third Bancorp and is now taking steps to reduce some of its operating costs, largely through staff attrition and “significantly” reducing its marketing budget, according to state documents.
“Each day since the Market’s opening day has been a better day for the Downtown Market,” Mimi Fritz, president and CEO of the Grand Rapids Downtown Market, said in a statement.
The debt restructuring comes as the Downtown Market reported sales from its operations and tenant businesses grew 14 percent to $14 million in 2017, according to a statement. The company said approximately 961,000 people visited the facility last year.
Executives said the report of revenue growth at the facility comes at an “opportune time” when the organization is working with the MEDC on the debt restructuring and helps show progress.
“This growth and success comes from the talent, creativity, expertise, and top notch customer service of our talented Downtown Market tenants and entrepreneurs, who have found ways to create a better model for local food in our city and region, and from their customers who are learning to shop local for more and better food,” Fritz said in a statement.