The emergence of life sciences-based higher educational institutions continues to have a discernible impact on ancillary development in urban areas across Michigan.
From the downtowns of Grand Rapids and Kalamazoo to Detroit’s booming Midtown neighborhood, major research institutions each with an emphasis on the life sciences are investing hundreds of millions of dollars into new facilities that stakeholders claim will continue to attract new residential and retail users in close proximity.
“Not only are we attracting a lot of national and federal dollars into the state for research and development, but those dollars are then employing researchers and faculty members that are living and spending money in the local communities,” said Jeff Mason, executive director of Lansing-based University Research Corridor (URC).
Mason’s organization serves as an alliance between three of Michigan’s major research institutions: the University of Michigan, Michigan State University and Wayne State University.
According to Mason, the three URC schools last year invested $1.1 billion — or more than 50 percent of their total research and development expenditures — into life sciences-related endeavors.
While that money may be related to investments in new facilities and expensive technology, Mason and other industry sources say there’s a direct spillover effect into the local communities.
“I think what you see in the life sciences and the investments universities are making, there’s a lot of research and development going on,” Mason said. “There’s the saying that’s been out there for a long time about ‘eds and meds.’ I think our three universities really reflect that.”
Indeed, the institutions create the types of jobs that municipalities, the state and universities need to be fighting for, said Ned Staebler, vice president of economic development at Wayne State University and president and CEO of TechTown Detroit, the school’s nonprofit business accelerator and incubator. Research organizations typically have a high multiplier effect in creating other jobs in the surrounding communities, he said.
“These types of workers are the manufacturing jobs of 50 to 60 years ago,” Staebler said.
EXPLORING DEVELOPMENT OPTIONS
While still more than a year out from opening and several years from being at full occupancy, MSU’s Grand Rapids Research Center could function as an anchor on the western end of the so-called Medical Mile along Michigan Street, according to stakeholders.
With the structure fully enclosed and interior work underway, the $88 million biomedical research facility sits at the northeast corner of Michigan Street and Monroe Avenue on the former site of the Grand Rapids Press headquarters.
Plans call for the other two parcels on the site to house some sort of ancillary development. Michigan State plans eventually to issue a request for proposals to determine appropriate uses for the parcels, said Vennie Gore, vice president of auxiliary services for the university.
At this time, Gore said the university has no specific timeline as to when it would issue RFPs or select partners for ancillary development on the site.
“We’ve been meeting with various folks in the community and we’re interested in this being an innovation park,” Gore said. “We’re being thoughtful with who those partners are. We’re purposely taking our time as we move through this.”
Gore declined to offer any specifics on the types of uses the university would like to see proposed, but did say the city of Grand Rapids is pushing for some form of retail user on the site.
Additionally, the Grand Rapids Research Center is projected to have a $28 million economic impact on the broader Grand Rapids community, according to a report released last summer by Anderson Economic Group LLC, an East Lansing-based consulting firm.
“The (research center) will increase the daytime population and pedestrian foot traffic at the site due to employees working at and visitors to the facility,” according to the report. “The physical improvement of the site will also generate interest in the area and has spillover effects in attracting interest in nearby properties.”
Directly across Monroe Avenue from the Grand Rapids Research Center, crews continue to work on the Rowe Hotel redevelopment, which is slated to open in early fall. The approximately $25 million redevelopment project by CWD Real Estate Investment Inc. will offer 77 market-rate apartments, a small number of condominiums and ground-floor retail space, including a satellite location for Detroit-based Atwater Brewing Co.
That type of nearby ancillary development is exactly what URC’s Mason hopes to have happen in more areas of the state.
“Certainly these types of positions … like those at the research center in Grand Rapids are going to be high-paying, technical kinds of positions that will create great wealth for the community,” Mason said. “Those positions create disposable income that helps stimulate other parts of the economy. There’s certainly positions that are well above the average salary, not only for West Michigan but the statewide average.”
Likewise, Western Michigan University’s Homer Stryker M.D. School of Medicine in downtown Kalamazoo also appears to be acting as a catalyst for ancillary development in Southwest Michigan’s largest urban core.
The facility — a collaboration between WMU and health care providers Borgess Health and Bronson Healthcare Group — sits in the southeastern corner of Kalamazoo’s expanding downtown, in the vicinity of several mixed-use housing developments, as well as increasing office, commercial and dining options.
In the short term, the medical school and the nearby development projects bring about $100 million in investment to the downtown, according to Jerome Kisscorni, assistant city manager and economic development director for the city of Kalamazoo.
“That brings down all the professional folks to operate and administer the organization,” Kisscorni said of WMU’s emerging medical school. “We’re ramping up the number of students going in, and that has a rollover with housing in downtown. There’s really a boom from the standpoint of housing.”
In many ways, the development pipeline in downtown Kalamazoo and its adjacent areas has begun to mirror what’s been coming online in Grand Rapids, with multiple mixed-use housing projects either under consideration or under construction. Additionally, developers in both cities have announced plans for projects to update office and commercial space.
The trends also reflect what Staebler of Wayne State University is seeing in the booming areas of Detroit. He believes the presence of life sciences companies can only help to ramp up the redevelopment efforts.
“It’s not going to stay contained. You’re already seeing some of that spillover effect,” Staebler said. “The adjacent areas to Midtown and downtown are starting to benefit from the increased demand in these neighborhoods. That’s the ultimate goal. … The core is now to the point where it’s starting to grow organically.”