GRAND RAPIDS — Developers behind a $140 million movie theater and mixed-use district south of Van Andel Arena want to expand the project to include a new office tower and hotel, MiBiz has learned.
Sources with knowledge of the plans say the developers have engaged Franklin Partners LLC in ongoing discussions to join the project team and head up development of a new office building at the site, located on two current surface parking lots. The partners in the project, J.D. Loeks’ Jackson Entertainment LLC and Grand Rapids-based 616 Lofts LLC, also have been in talks with another unnamed company to develop and manage a newly added hotel as part of the plans.
Real estate sources contacted for this report, who spoke on the condition of anonymity, note that formal development agreements have yet to be finalized for the new office tower and hotel, adding that the plans face a number of hurdles and could still fall through.
Without getting into specifics, the original project partners acknowledge their plans have evolved since they were first unveiled in April 2016.
“There’s been some changes to the scope we think will be for the better,” said Jeff Olsen, director of development for 616 Lofts LLC. “We’re in the process of finalizing the development deal.”
The partners initially proposed a nine-screen Celebration Cinema movie theater concept, 337 apartments built over two phases, retail and public space. The initial project also included a more than 900-space parking deck.
Sources with knowledge of the project said the partners have scaled back on the number of apartment units, citing market conditions, and are considering converting some of them into condominiums, which would be offered for sale.
“What we come back with will be driven by market demand,” Olsen said.
616 Lofts has updated renderings reflecting the changes, but Olsen declined to release them as this report went to press. However, he said the plans for a public plaza remain part of the updated proposal.
Executives at Franklin Partners declined to comment on the firm’s involvement in the proposed project. The Grand Rapids- and Naperville, Ill.-based development and property investment firm has a track record of renovating and leasing downtown Grand Rapids office buildings in recent years. If the office tower project moves forward, it would mark the first time the company has turned to new construction for office development in West Michigan.
One challenge related to the new plans stems from a term sheet agreement 616 Lofts and Jackson Entertainment LLC signed a year ago with the city of Grand Rapids and the Grand Rapids Downtown Development Authority (DDA), which owns the surface parking lots.
Sources contacted for this report said both the Grand Rapids City Commission and the DDA’s board would have to sign off on any changes to the term sheet, which specifies the number of residential units and parking spaces the developers are expected to build, among other items.
Attempts to reach Loeks of Jackson Entertainment were unsuccessful as this report went to press. A company affiliated with Loeks, who also serves as the president of Celebration Cinema, has held an option on the parking lots since 2012.
In an interview last year about the project, Loeks stressed the importance of thinking big and partnering for a meaningful development on the site.
“I recognized that the scale of a project that would make sense on that big of a piece of property would be something bigger than our company alone would want to take on,” Loeks told MiBiz at the time.
According to the term sheet agreement, the development partners have one year from April 15, 2016 to receive approval for the project from the Grand Rapids Planning Commission. It remained unclear when the partners would reveal their plans for the updated development proposal.
When the project was initially announced, Downtown Grand Rapids Inc. — the organization that administers the DDA — released a statement saying the development proposal would generate $369 million in economic benefit to the city in the decade following its completion.
“We continue to work closely and collaboratively with the development team to define a project that advances the community’s GR Forward vision for the future of downtown,” a DGRI spokesperson said last week in a statement to MiBiz, referring to the city’s master plan document.