GRAND RAPIDS — Tribally owned Gun Lake Investments and Waséyabek Development Co. have jointly acquired McKay Tower in downtown Grand Rapids, MiBiz has learned.
The two tribal non-gaming economic development entities purchased the iconic downtown building from Steadfast Property Holdings for $17.5 million in a deal that was completed earlier today and brokered by NAI Wisinski of West Michigan.
The 18-story, 154,000-square-foot building at 146 Monroe Center St. — located at the corner with Pearl Street in the core downtown business district — houses retail, office space, an event venue and luxury apartments on the upper floors.
The deal marks a “rare co-investment” by the economic development arms of two Native American tribes based in Michigan.
“It’s obviously an investment that is going to return revenue, so that’s part of it, but to be able to purchase this building — being so iconic in our business communities and mutual ancestral lands — is really a big deal, and a source of pride for the membership, council and board of directors,” Deidra Mitchell, president and CEO of Grand Rapids-based Waséyabek Development, told MiBiz.
Waséyabek Development is the non-gaming economic investment entity of the Nottawaseppi Huron Band of Potawatomi Indians, while Grand Rapids-based Gun Lake Investments serves in a similar function for the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe.
The new owners plan to continue offering apartment, office, retail and commercial space for leasing, as well as run the event venue.
The joint acquisition comes as a significant investment for the two tribes’ non-gaming economic development companies. Both Mitchell and Kurt Trevan, CEO of Gun Lake Investments, are charged with diversifying economic opportunities for their respective tribes, and they had been formulating ideas for a joint investment in recent years.
Both partners look at the investment in McKay Tower from a seven-generation perspective.
“We think through how our investments will survive us and our children, and their children,” Trevan said. “That’s unique to tribes, and this was one of those buildings that have obviously stood the test of time, and we think it will continue to do so for a long time to come.”
The acquisition and visibility of the building lends credence to both tribes, Mitchell said, and shows they are relevant in economic development and have business structures and a commitment to the community.
The growth of the tribes’ economic development arms for non-gaming investments has been significant in recent years. Gun Lake’s portfolio now includes 13 investments, and Trevan said he is hoping to double the size of the company in the next two years. Gun Lake Investments and Waséyabek Development have each invested about $50 million, whether in real estate, creating new companies or via acquisitions of existing non-tribal businesses.
Trevan said since beginning these endeavors, new and existing companies have expanded in Grand Rapids to work with tribal businesses, including banks, law firms and consultants, among others.
“That makes it easier for us to conduct business, and we think that’s going to make it easier for others to also work with tribes and tribally owned businesses,” Trevan said. “This feels like just the beginning.”
Steadfast Property Holdings, an investment company operated by the Borisch family, founders of Borisch Manufacturing Corp., purchased McKay tower in 2012 for $10.5 million and invested heavily in renovating the building in 2013, including adding a ballroom on the second floor.
The first four floors of McKay Tower were built in 1914, with the remaining floors added in 1925.
Tenants in the facility include Elliott’s News, Freshii, Kilwins, Sushi-Yama, Commerce Bank, Wells Fargo, Edward Jones, and TG Manufacturing. The building is 98.5 percent occupied.
Waséyabek Development was advised on the transaction by Dickinson Wright PLLC, while Rosette LLP advised Gun Lake Investments. As well, Barnes & Thornburg LLP also provided legal counsel to the tribes on the transaction.
EDITOR’S NOTE: This story has been updated from its original version.
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