Mixed-use $14.7 million Kalamazoo Creamery project secures state incentives

BY Tuesday, May 21, 2019 04:44pm

KALAMAZOO — A partnership headed by Portage-based Hollander Development Corp. plans to transform a vacant lot in Kalamazoo into a new mixed-use building under a proposal that secured state backing.

Kalamazoo Creamery LDHA LP is proposing to construct a new 59,420-square-foot building on a vacant 1.33-acre vacant parcel at 1101 Portage St. in the city’s Edison Neighborhood.

Once completed, the LEED-certified project will include 48 mixed-income apartments and 10,500 square feet of commercial space, including a YWCA Children’s Center and small business accelerator.

The site formerly housed Klover Gold Creamery, which delivered dairy products to the Kalamazoo community from the 1950s through 1980s.

The company received more than $2.5 million in incentives from the Michigan Strategic Fund board to purchase tax-exempt bonds and provide performance-based loan support for its proposed mixed-use project.

“This mixed-use project will add density and promote walkability by constructing new commercial and residential space near downtown Kalamazoo; the Project will also supply mixed-income housing and childcare facilities in a traditionally underserved area,” according to a briefing memo supplied to the MSF board.

The city of Kalamazoo Brownfield Redevelopment Authority also received MSF board approval for $280,018 in local and school tax capture to use for site remediation.

Hollander Development, the general partner in the Kalamazoo Creamery partnership, anticipates the project will result in a total capital investment of more than $14.7 million and create 23 full-time jobs, according to the memo.

The MSF document indicates the developer has raised a portion of the equity in the project via InSite Capital, a division of Chemical Bank focused on financing low-income housing.

Developers requested state incentives to cover a financing gap “due to high costs of construction, as well as the reduced income generated by affordable residential rental rates.”

In its 40 years in operation, Hollander Development has developed more than 4,000 units of affordable and senior housing since, according to the memo.

Vicksburg-based Frederick Construction Inc. is serving as construction manager for the project, which was designed by Kalamazoo-based Byce & Associates Inc.

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