GRAND RAPIDS — Tribally-owned Gun Lake Investments is making an active push into the West Michigan commercial real estate market with an investment in a high-profile redevelopment and three property acquisitions so far this year, MiBiz has learned.
With an equity investment in Rockford Construction Co. Inc.’s Stockbridge development on the city’s west side, Gun Lake Investments is helping pave the way for a new Meijer Inc. gas station and convenience store, as well as five additional ground-floor retail spaces along Stocking Avenue. The retail project forms an integral part of a five-story mixed-use building, where nonprofit developer Inner City Christian Federation plans 64 mixed-income units on the upper floors.
“For us, it was a way to be part of an effort of funding partners that we share values with and to benefit the community,” Kurtis Trevan, CEO of Gun Lake Investments, told MiBiz in an exclusive interview.
Meijer, which operates the adjacent Bridge Street Market, signed a long-term lease for the new gas station and convenience store space in the development, Trevan said. In December, the project secured $372,000 in state brownfield grants.
“It cleans up a dirty gas station and is putting in retail along there to complement the Bridge Street Market,” Trevan said of the retail-led investment.
Mike Mraz, president of real estate development at Rockford Construction, called the investment a “perfect fit” for the company’s large-scale project on Grand Rapids’ west side.
“It was a great way to provide equity support to that project and bring additional retail and service and a Meijer gas station to the neighborhood,” Mraz said. “It’s really making quite a few improvements on that block.”
Additionally, Gun Lake Investments spent a combined $2.6 million in May to acquire two adjacent industrial properties on the western banks of the Grand River just north of downtown Grand Rapids.
The separate deals for 1250 Front Ave. NW and 1300 Front Ave. NW follow a transaction in which Gun Lake Investments refinanced the land contract for the Grand River Band of Ottawa Indians’ headquarters, which is adjacent to the two industrial buildings.
The Grand River Band, which continues to seek federal tribal reaffirmation, houses its tribal government operations and leases space to other tenants in the Class C office building at 1310 Front Street NW.
Trevan said Grand River Band Chairman Ron Yob alerted Gun Lake Investments that 1300 Front Ave. was about to hit the market. That set Trevan and his team in motion, and they submitted an offer and purchased the building for $1.275 million. The deal led Gun Lake Investments to discussions with the owners of the adjacent building at 1250 Front Ave., culminating in a second deal valued at $1.325 million.
Gun Lake Investments, the Grand Rapids-based economic development entity for the Match-e-be-nash-she-wish Band of Pottawatomi Indians, or Gun Lake Tribe, opted to get involved in the “opportunistic” property deals “to protect our collateral and help out the Grand River Band,” Trevan said. “We like to talk about it because we are promoting tribe-to-tribe trade.”
Trevan noted the deals were “on the smaller side” of the firm’s typical investments.
“The $6 million range, plus or minus, is ideal, but we will go lower or higher if it checks all the boxes,” he said.
In addition to the Grand Rapids deals, Gun Lake Investments in late May purchased the headquarters property for portfolio company Commercial Sanitation Management LLC (CSM), a Hudsonville-based commercial custodial services provider. The firm first acquired the CSM business in 2018.
Trevan, who’s involved with the Grand River Whitewater organization, said both riverfront properties in Grand Rapids could benefit in the future as the city begins to reimagine its waterfront. Still, he acknowledges that Gun Lake Investments approached the deals as income-generating properties.
The investment firm is working with Matt Abraham at First Companies to market the spaces to industrial warehouse and distribution tenants.
“It’s an interesting part of the city with the river,” Trevan said, noting any connection to the whitewater project came as a secondary reason for the purchase. “We’re still a long ways before we’ll see it turning into something else. … We want to see what the river can do to activate that part of the city.
“We have the ability to be selective with the tenants we put in so we can make sure we’re improving the neighborhood.”
The Front Street properties also sit just south of the Kent County Road Commission Central Complex, which recently went through a request for proposals process to try to identify a buyer for the 14.2-acre riverfront site. The commission’s board ultimately rejected a $5 million bid, as MiBiz reported in March.
While the project was too large for Gun Lake Investments to do on its own, “if someone wanted to sit down, we’d be happy to talk” about co-investing in a deal for the site, Trevan said.
Refocusing on strategy
The busy May for Gun Lake Investments coincided with a marked shift in focus toward commercial real estate investments to generate more passive income for the tribe. Trevan expects that real estate focus to continue through the end of the year, but notes that the investment group remains interested in acquiring operating companies.
Trevan sees the shift as a way for Gun Lake Investments to take more of a “community focus and be impactful with our investments.”
Through the end of the year, he envisions Gun Lake Investments closing one more large real estate transaction “and trying to still ramp up our pipeline of real estate and operating company opportunities.”
The deals also come as Gun Lake Investments engaged Grand Rapids-based DWH LLC to revisit its corporate strategy and ensure it’s using best practices across its portfolio of 10 separate investments.
“We’re now at that point where we need to rethink our strategic plan,” Trevan said. “DWH has done an amazing job. They share our values and they have the experience of plugging in with other tribes.”
Monica King, managing partner and CEO of DWH LLC, said the process will help Gun Lake Investments transition from the startup phase and “define objectives for continued focus and also to aid in the development of internal infrastructure needs.”
“The business environment is constantly changing and to some extent, your business plan should evolve as well,” King told MiBiz via email.
Hiring DWH also fits with Trevan’s support of “tribe-to-tribe trade,” since the consultancy is 60-percent owned by Waséyabek Development Co. LLC, the Grand Rapids-based economic development arm of the Nottawaseppi Huron Band of the Potawatomi. DWH also has experience working with tribally-owned economic development corporations (EDCs) on assessment and business planning.
“We help with that planning and then can come alongside during the execution phase, whether it be supporting the EDC or subsidiaries directly, or helping with due diligence or integrations and governance structure,” King said.
The equity investment in the Rockford Construction project in Grand Rapids came about over the last two years after Gun Lake Investments got to know the contracting, development and property management firm.
The relationship dates back to 2017 and Rockford Construction’s involvement in the development of Noonday Market and a Subway restaurant location across from the Gun Lake Casino in Bradley.
Since then, Rockford has engaged CSM, Gun Lake Investments’ portfolio company, for custodial services. Meanwhile, Gun Lake Investments tapped Rockford Construction’s property management division for services at its newly acquired Front Avenue facilities.
Mraz said the investment was the culmination of a process in which the two organizations worked closely together to understand each other.
“We’re starting to see opportunities across multiple paths,” Mraz said. “The relationship is really strong on all fronts. There’s a lot of trust in Kurt and vice versa. We’re excited to see where that can go.”
According to Trevan, Gun Lake Investments found in Rockford Construction a partner who shares its values and long-term focus. The two companies will continue to find ways to work together on projects because of the firms’ alignment and compatibility, he added.
“We’re collaborating with Rockford on ideas, and we’re collaborating with other partners as well,” Trevan said, declining to discuss the nature of ongoing project investment discussions.
With the Stockbridge project, Gun Lake Investments brought to the table what Trevan describes as “patient capital,” given the firm’s long-term investment strategy.
Mraz said Rockford Construction welcomed the chance to work with a partner who understood and endorses the company’s vision for the project.
“It’s nice to have financial partners that are willing to take those steps alongside of us,” Mraz said. “Many of our real estate holdings are longer term in nature, and so having that stability is great for us.”