When completed, 616 Lofts on Michigan will feature 54 apartments and nearly 10,000 square feet of commercial space. Courtesy 616 Development
The Grand Rapids Brownfield Redevelopment Authority approved a brownfield plan and an obsolete property designation for one of the city’s most active developers last week, and this project will mark the first time 616 Development will build from scratch after having revived many vacant structures.
The development company and community builder plans to put up a new four-story, 56,000-square-foot, mixed-use building on the property at 740 Michigan St. NE and the adjacent lot to the east. The building site is about seven-tenths of an acre and is situated near the intersection of Michigan Street and Eastern Avenue.
“It’s a functionally obsolete property, so it qualifies,” said Kara Wood, the authority’s executive director.
616 Development bought the property for $550,000 in September.
“We find this site as a great connector to downtown and the Medical Mile, with all the development going on, on Michigan Street,” said Monica Clark, director of community development at 616.
The completed project will be called 616 Lofts on Michigan. The firm will invest nearly $16.2 million into the project that will result in 54 market-rate apartments, 9,700 square feet of ground-floor commercial space and 95 parking spaces. Twenty-seven of those spaces will be at ground level, while 68 will be below ground.
Clark said the surface-level spaces will be public spaces for customers of the ground-floor tenants and the building’s residents will use the underground spaces. The underground parking deck will cost about $2.5 million to construct and is the main reason the project qualifies for reimbursements through tax-increment financing. According to state law, new parking ramps and underground spaces are eligible for reimbursement, but surface lots aren’t.
In all, 616 will invest more than $3.3 million into activities that meet the state’s brownfield statute, and the company will be reimbursed for that investment from the higher property taxes the finished project will generate. But that reimbursement won’t come quickly.
“It’s expected it will take 21 years to reimburse this project,” said Wood.
616 Lofts on Michigan is expected to create 15 new full-time jobs that will pay an average wage of $16 an hour, and the city will get nearly $5,000 a year in new income-tax revenue from those jobs. The project also expects to generate $247,700 in new property taxes in its first full year; the city will get $41,200 of that total.
Members of the brownfield authority mentioned the site was once home to one of the city’s busiest and most popular restaurants in the 1960s and 1970s: Duck’s Restaurant. The original building still stands, but will be razed because it has deteriorated and would cost too much to restore. Demolition will cost about $30,000, an expense that also is reimbursable.
Clark said she presented the project to the Midtown Neighborhood Association and the Michigan Street Corridor Association, and both groups expressed their support for it.
“They’re all very excited with the project,” said Clark.
Wood said the project meets the city’s Master Plan and is permitted in the Michigan Street district.
The firm will build 616 Lofts on Michigan with environmentally sound features that may include a green roof, and will ask for financial support from the Michigan Community Revitalization Program.
616 Development recently finished renovating the two buildings that now comprise 1 Ionia Ave. SW and the former Kendall Building at 16 Monroe Center. Both are 616 Lofts locations. The firm is in the process of turning a historic church in the Heritage Hill neighborhood into 616 Lofts on Prospect.
The brownfield request will now go to the city commission for its approval.