GRAND RAPIDS — The state’s economic development body today voted to approve incentives for two mixed-use development projects around downtown Grand Rapids.
The board of the Michigan Strategic Fund approved brownfield tax incremental financing (TIF) for Orion Construction Company Inc.’s mixed-use, twin-tower development containing corporate office space, a hotel and parking in the core downtown business district. Additionally, the MSF approved brownfield TIF for Third Coast Development LLC’s proposed 42-unit apartment development along Michigan Street, just east of Union Avenue, near the region’s cluster of medical and health science buildings.
The $63 million office and hotel development by an Orion Construction subsidiary would take over a surface parking lot at the northeast corner of Ottawa Avenue and Lyon Street. The current parking lot was built over the site of a previous building, with much of the former building’s infrastructure still buried underneath, causing significant site remediation costs, according to documents filed with the state.
The MSF board approved just over $8.6 million in local and school capture funds over 22 years to make the project economically feasible.
Jason Wheeler, a spokesperson for Orion Construction, said the approval of state brownfield incentives was one of the last major hurdles the project needed to move forward. Wheeler said only a handful of internal agreements remained before the project could break ground, possibly this spring.
As MiBiz previously reported, tenants will include Grand Rapids law firm Warner Norcross & Judd LLP, which is relocating from 111 Lyon St. NW, and Midland-based Chemical Financial Corp., which plans to open a regional headquarters for Chemical Bank in the facility.
A Hyatt Place hotel will occupy one 12-story tower, while the offices will be in an adjacent 15-story office tower, which include seven stories of parking.
Additionally, the MSF board approved the request of a subsidiary of Grand Rapids-based Third Coast Development to demolish three structures along Michigan Street between Grand and Benson Avenues, clearing the way for the firm to move forward with a new mixed-use apartment building, as MiBiz first reported.
The state approved local and state capture of just over $675,000 for the proposed project. Third Coast Development Principal Max Benedict told MiBiz in a text message that the company hopes to break ground by June 1 with a 12-month or shorter construction period.
The project would include “micro apartment units” beginning as small as 312 square feet for a studio going up to 610-square-foot two-bedroom units.
The units are designed small to target those earning approximately 80 percent of the city’s area median income (AMI), sometimes called the “missing middle.”
“Although the units are smaller than traditional apartments, the economies of scale do not result in dramatic savings simply because the number of fixtures, appliances and similar amenities per apartment per apartment will be present as would be found in larger studio or one-bedroom apartment,” the company said in documents filed with the state. “As a result, the overall cost of construction is not dramatically lower for these micro units than it would have been for a similar number of units sized on par with a traditional market rate product.”