GRAND RAPIDS — Partners including the founder of now-bankrupt 616 Lofts LLC have launched a new venture that is proposing a mixed-use housing development in Grand Rapids’ Creston neighborhood.
While neighborhood leaders say they’re eager to see a project move forward at the long-vacant site at the southeast corner of Plainfield Avenue and Quimby Street, they also say the new group needs to work hard to repair trust stemming from broken promises from one of their current partners, as well as be responsive to the neighborhood’s housing needs.
Grand Rapids-based The Establishment Group LLC, founded by Isaac Oswalt and former 616 Lofts founder Derek Coppess, have partnered with local developer and investor Brian Papke on the proposed North End Lofts project, a three-story building with 36 one-bedroom market-rate apartments in the Creston Business District. The project also calls for 7,000 square feet of ground-floor retail space.
“There’s been a few other people with different ideas who have come to try to do something here and been unable to do it,” said Oswalt, the owner of 21 Handshake LLC, an Ada-based digital communications firm.
A subsidiary of The Establishment Group purchased the property in late 2019 for $1.4 million. 616 Development LLC had proposed a mixed-use facility at the same location and promised to spur new business investment in the Creston neighborhood, but the project and others it planned for nearby properties never came to fruition. Parent company 616 Lofts went on to file for Chapter 7 bankruptcy at the end of 2018 in the U.S Bankruptcy Court for the Western District of Michigan, as MiBiz previously reported.
For the project, The Establishment linked up with Papke, an Ada resident who previously worked as principal and design lead at Capital City Real Estate in Washington, D.C. Recently, Papke and two friends opened The Forager, a restaurant featuring regional cuisine, in a historic building they restored in Howard City.
Papke told MiBiz he “stumbled across” the work of 616 Lofts when looking for projects to develop and invest in around Grand Rapids, and met up in Ada with Oswalt, who had been working with Coppess to start The Establishment Group for about a year.
“The first thing (Coppess and Oswalt) said is they had some projects in Grand Rapids that they need a local sponsor for, because they’re working on the corporate side of The Establishment Group more heavily, and they needed a local guy on the ground to be the Grand Rapids guy,” he said. “The suite of resources they’re building is pretty impressive in terms of their knowledge base, their marketing skills. That was a big help to me.”
The North End Lofts project marks the first known project in West Michigan for Coppess after the 616 Lofts bankruptcy. He’s also personally named as a defendant in several lawsuits tied to former real estate deals.
Since 616 Lofts’ previous plans for the Creston site never came to fruition, the neighborhood and local business owners who moved in after hearing about the project have been eager to see the property developed, said Megan Kruis, executive director of the Creston Neighborhood Association.
“The fact remains that the current status of that property is not what we want it to remain,” she said. “But I do think the extent to which the previous developer of that property is involved now … there is a lot of trust that would have to be rebuilt in the community.”
Kruis added that the neighborhood would like to see housing added that offers a variety of price points.
“Nobody wants to keep that a grassy lot, but it is just really important to us that as we are creating the future of our neighborhood, it’s a future where everyone has a place,” Kruis said. “We will continue to talk to neighbors and think about ways to work with the developer. We really would prefer it to be a mixed-income development.”
The Establishment Group anticipates finishing the project by the end of 2020, with a groundbreaking in the first half of the year.
Grand Rapids-based Construction Simplified is the general contractor on the project, which was designed by Wyoming-based Richard Postema Associates Architects and Engineers PC.
The Establishment began with Oswalt and Coppess and an emphasis on mentorship, Oswalt said. The company’s model is to work with a local developer and provide industry expertise while investing in the development and retaining long-term ownership that will be different with each project, similar to how 616 Lofts structured its deals.
The Establishment Group aims to replicate the North End Lofts model with similar projects in cities around the country, namely Indianapolis and Nashville, said Chris Knape, founder of K Corner Consulting LLC, a spokesperson for the development company.
“If there’s opportunities in Grand Rapids to do more, that’s maybe something Brian (Papke) looks at,” Knape told MiBiz. “The focus now is really on North End Lofts and doing this project right because this is really the first of what we hope will be many projects that help establish The Establishment.”
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