GRAND RAPIDS — The last major vacant building in the core of downtown Grand Rapids will remain empty, at least for the foreseeable future.
Don Shoemaker, a principal with Franklin Partners LLC, told MiBiz that his development and property management firm decided not to move forward with acquiring the 102-year-old Keeler Building at 56 North Division Ave.
The Grand Rapids and Naperville, Ill.-based Franklin Partners entered into a contract to acquire the historic building in January, as MiBiz first reported at the time, but required more time for due diligence than existing owner James Azzar was willing to give, according to Shoemaker.
“We weren’t able to proceed to close and we needed more time,” Shoemaker said. “We shook hands and went our different directions.”
Shoemaker said the decision to walk away from buying the building from Azzar was done amicably.
Franklin Partners had planned to convert the building to office use with retail on the ground floor.
Mark Ansara, an associate vice president in the Grand Rapids office of commercial brokerage firm Colliers International Group Inc., which brokered the initial deal, confirmed that Franklin Partners had decided not to move forward with the property acquisition.
Ansara said that Colliers is no longer actively marketing the property.
The decision not to move forward with the final sale resulted from a combination of factors, Ansara said.
Initial redevelopment costs were pegged at north of $10 million and the existing construction market would have made renovations cost prohibitive, leading to a need for incentives to cover gaps, Ansara said.
Additionally, the seven-story, 167,706-square-foot building is designed to hold approximately 1,200 people and required added nearby parking, sources said.
Kris Larson, president and CEO of Downtown Grand Rapids Inc. (DGRI), said his organization understands the redevelopment of the aging building will always be a challenge.
“We recognize that it’s going to involve multiple parties working toward a shared solution,” Larson said. “At the end of the day, every deal requires a willing buyer and seller and that’s always a delicate process.”
Moreover, much of DGRI’s work is geared toward public spaces in the center city area. Despite efforts by the city and other parties to force Azzar to make repairs, the owner has blocked off the crumbling sidewalk around the building for a number of years.
“We think it’s important that that building experience that next chapter of a renaissance,” Larson added. “It has something of a blighting effect on the community. Living with the sidewalk that’s closed off, that’s not the city we’re trying to build.”
While the overall potential for future redevelopment of the Keeler Building remains unclear, Franklin Partners will now turn its focus to its proposed redevelopment of the Display Pack Inc. industrial building in the Grand Rapids Monroe North building.
The current tenant is expected to be mostly out of the facility by the end of the year, and Shoemaker said he hopes to decide whether to turn the building into office or residential uses in the next 30 days.
Earlier this year, Franklin Partners sold two downtown buildings for a combined $50 million. Additionally, Franklin Partners announced this week its acquisition of a five-story office building in Oak Brook, Ill., about 20 miles due west of downtown Chicago. That building is almost fully leased.
Terms of the all-cash deal were not disclosed.