Large housing, retail project would transform aging, industrial stretch of Grand Rapids
Posted By: mlive on April 11, 2023. For more information, please click here to read the source article.
Several dilapidated, largely vacant warehouses along the 600 block of Godfrey Avenue SW would be transformed into a 475-unit housing development with office, retail and event space, and a food hall under a proposal from three metro Detroit developers.
The development, known as Factory Yards, is expected to cost $150 million. If completed, it would represent a significant change for the area, bringing scores of residents, businesses and activity to an industrial stretch of the city south of downtown in the Roosevelt Park neighborhood.
“This is truly a transformational project,” said Jeremiah Gracia, director of economic development for the city of Grand Rapids.
Spanning 15.5-acres and including five buildings, Factory Yards would rank among the largest and most expensive mixed-use projects in Grand Rapids in recent years. It would also be the biggest such project in the Roosevelt Park neighborhood’s history, officials said.
On Tuesday, the project’s developers — Dennis Griffin, Scott Magaluk and Ben Smith — spoke to the Grand Rapids City Commission about their vision for Factory Yards. City staff also told commissioners the developers want to apply for a relatively new and rarely used incentive tool known as transformational brownfield funding.
The traditional brownfield program, in place for more than two decades, uses property tax revenue to reimburse developers for costs associated with redeveloping contaminated, functionally obsolete properties often found in urban areas.
The transformational brownfield program builds on that. Launched in 2017, it allows developers to capture income tax of people who work and live at the project site and certain taxes associated with construction, according to a Michigan Economic Development Corporation fact sheet.
Under the transformational brownfield program, which has not yet been used in Grand Rapids, the developer would be eligible to be reimbursed about $120 million over a 20-year period, city staff said. That’s up from about $20 million under the original brownfield program.
The developers say the project isn’t doable without that assistance. “The cost to construct property, service the debt and operate the building is too high, even with rents where they’re at in the market today, to make it sustainable and financeable,” Smith said. “We wouldn’t be able to get a construction loan.”
The timeline for the project is still a work in progress, the developers said. But if everything goes according to plan, construction could start yet this year. Overall, the project would take several years to complete, though it could be completed in phases. A proposal for the transformation brownfield funding could come to the city commission for approval in May, officials said.
During the city commission meeting, leaders from the Roosevelt Park Neighborhood Association spoke in support of the project. They said they were pleased with the developer’s neighborhood outreach, and that the renovated warehouses could provide retail space for residents.
“From our conversations, it really came across that their goal is to create a space where people of all socioeconomic levels can have a high quality of life,” said Amy Brower, executive director of the Roosevelt Park Neighborhood Association.
Rental rates for the development haven’t been determined. But as part of the plan to seek the transformational brownfield incentives, the developer is aiming to reserve about 100 of the 475 apartments for residents earning up to 80% of Kent County’s area median Income. Those units would have “below market rents,” though the exact rate was not listed in a city commission memo.
For a two-person household, 80% of Kent County’s area median income is equivalent to $57,280, according to Michigan State Housing Development Authority.
Factory Yards is located at 655 Godfrey Ave. SW, north of Oxford Street SW and south of Grand Rapids Community College’s Leslie E. Tassell M-TEC building. The property is home to a five-story warehouse, a three-story warehouse, a single-story warehouse and a two-story commercial building.
Under the project, the buildings would be rehabbed, though a portion of the two-story building would be demolished. In addition, an apartment building would be built on the south end of the property. Besides the apartments, food hall, retail and office space, the development would also include an outdoor green space plaza courtyard along Godfrey Avenue and self-storage of about 500,000 square feet.
Reggie Smith, the longtime president of the Roosevelt Park Neighborhood Association, said the project would represent the largest development in the Southwest Side neighborhood since the early 20th century.
The warehouses targeted for redevelopment once represented the area’s blue-collar, working-class roots. Now, with the new development on the horizon, they could serve as an “anchor” for the Godfrey Avenue corridor, he said.
“It’s exciting to now have some new life, some new energy there,” he said.
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