MUSKEGON — The developer of a six-story mixed-use project in downtown Muskegon is changing the scope of the development to replace some office space with more residential units to reflect market demand.
The Michigan Strategic Fund board today approved amendments to Sweetwater Development Partners LLC’s $1.5 million Michigan Community Revitalization Program (MCRP) loan and ancillary agreements to facilitate the modified project scope.
In re-assessing the real estate market, the developer is now planning to increase the number of apartment units from 18 to 24 and downsize the amount of office space. As well, the due date for completing a project milestone was pushed back to facilitate changes.
The Leonard project is being constructed at 292 W. Western Ave., at the corner of Second Street and Western Avenue, on property that formerly housed the Muskegon Mall. The MCRP loan was originally approved on Dec. 17, 2019 for a 51,565-square-foot building, as MiBiz previously reported.
Owned by Corey Leonard, Sweetwater Development previously developed a property farther south at 605 W. Western Ave., which is now Radiology Muskegon P.C. Leonard is also the owner of Grand Haven-based graphics and sign company Big Signs.com Inc.
The Leonard is about 55 percent complete, with framing on all six stories in place, according to a memo filed with the Michigan Economic Development Corp. The development has been through multiple delays related to materials costs and lack of available labor availability.
The project is now planned to include one floor of retail space, one floor of office and four floors of residential units. The change in scope — as well as changing some of the finishes throughout the plan — is expected to result in a $1.24 million cost increase for the project. The developer is seeking bank loans to raise an additional $1.98 million in financing, and expects to raise rental rates.
The property was previously owned by the Downtown Muskegon Development Corp. The site is within an Opportunity Zone and has been approved by the Muskegon City Commission for a 15-year Neighborhood Enterprise Zone tax exemption.