GRAND RAPIDS — The eight-story office tower Spectrum Health plans to build will bring a major new redevelopment and hundreds of employees to the Monroe North neighborhood near downtown Grand Rapids.
Spectrum Health aims to begin construction late this summer on the Center for Transformation and Innovation that will rise on a 4.8-acre site along North Monroe Avenue and Ottawa Avenue just east of the Grand River. The $60 million to $80 million project will house about 1,200 Spectrum Health administrative staff — executive leadership, human resources, legal and finance — now working at 26 leased offices in the city. Spectrum expects to save about $15 million annually in rent.
Spectrum Health hopes the project will lead to further redevelopment and “breathe more life” into the Monroe North business district that most recently saw a former industrial site transformed into the 246-room Embassy Suites hotel, said Spectrum Chief Financial Officer Matt Cox.
“I think it’s certainly going to transform the neighborhood. It’s going to bring even more life into a neighborhood that’s growing now, and I think more development will happen as a result of us being there than if we weren’t there,” Cox said.
The center also will house a training and a learning center in a first-floor meeting space for up to 500 people, including hosting new employee orientations and corporate meetings. A pedestrian bridge will connect the 160,000-square-foot project to the adjacent 155,000-square-foot Brass Works building that Spectrum Health bought last year for $25 million and plans to renovate.
The Grand Rapids Planning Commission last week approved plans for the project, including a special land use permit for Spectrum Health to build two parking decks of 420 spaces each and a 100- to 150-space surface parking lot on Bond Avenue as part of the Center for Transformation and Innovation (CTI).
Approval of the parking structures represent an “intermediate step” for the project toward a full buildout that could include future retail and office development on the perimeter of the site, Grand Rapids Planning Director Kristen Turkelson said. City staff has been meeting regularly with Spectrum Health on project plans, Turkelson added.
“From a planning perspective, we’re quite excited about this and appreciate the collaboration and coordination that Spectrum has worked with city staff so far,” she said.
The 1,200 employees that will relocate to the CTI will join about 300 Spectrum staff who now work at the Brass Works building, bringing the total workforce at the campus to 1,500 people.
Spectrum seeks to ensure that the proposed parking structures and lot “doesn’t overload the streets in our community,” said Alan Kranzo, the health system’s director of strategic real estate services.
The timing of future development on the site’s perimeter “is not yet known,” Kranzo said last week.
“Certainly we want to control the development of this site, so the nature of how that site will develop over time is not known at this time,” he said.
A resolution the Planning Commission unanimously approved for the parking plans noted that the project “will encourage other investment” in the Monroe North neighborhood, as well as benefit the downtown business district as Spectrum employees “patronize businesses in the vicinity.”
The CTI has been in the planning stages for two years as Spectrum Health acquired the parcels in the neighborhood, including the former Gill Industries Inc. facility on Ottawa Avenue.
The office building will feature “hoteling space” to accommodate Spectrum Health employees in the era of the COVID-19 pandemic who split their time between working remotely and coming into the office for team meetings or conferences, Cox said.
“We were able to change some things so it can be very useful in a post-COVID environment where we have people that maybe work at home three days a week and come in two days a week,” he said. “We’re creating it to be much more open so people can come in and find hoteling space or the work space that they need so they can continue to solve complex problems together and also build culture together in this environment.”
Spectrum Health targets occupancy of the CTI for the summer of 2023.
The CTI will give Spectrum Health a corporate headquarters and a single location for executives and its administrative employees who are now spread out across Grand Rapids, plus eliminate staff travel time for team meetings. None of the finance staff that report directly to Cox, for example, work in the same office building where he’s based.
“To come together to solve complex problems is going to be a game-changer for us because we haven’t had something like that before. It’s just going to be a lot more convenient for people to work together,” Cox said. “By having one central location, it’s just going to be more efficient and more effective and a lot easier.”
The CTI also will free up space now used for offices at the nearby Butterworth Hospital campus on Michigan Street for future medical uses, he said.
Spectrum Health did look at several other sites around downtown and the city, as well as in the suburbs, to build the CTI, Cox said. The plan for the Monroe North site was the most economical and had the quickest payback, he said.
“Overall, we know this is the right place for the CTI,” Cox said. “Just like downtown Grand Rapids is the hub for business for West Michigan, this is where we wanted to have our hub for innovation and transformation.”
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