The city expects that 15 full-time equivalent jobs will be created when Lofts on Michigan is finished. Courtesy 616 Development
A key mixed-use project planned for the city’s near northeast side took another step toward reality last week when the Brownfield Redevelopment Authority approved a development and reimbursement pact with the developer of Lofts on Michigan.
The developer, 616 Development, proposes to spend $16.1 million to build a new four-story structure at 740 Michigan St. NE near Eastern Avenue with 54 market-rate apartments, 9,700 square feet of ground floor retail space, and 95 parking spaces, with 68 of those going into an underground ramp.
The firm, headed by founder Derek Coppess, will invest $3.3 million into the site, which qualifies as being functionally obsolete, to prepare it for construction; that investment is reimbursable under state law.
The developer will spend about $30,000 to raze an existing building on the site — a former restaurant with an apartment on the second floor — and another $2.8 million on infrastructure improvements to the property. Those improvements include new sidewalks and curbs, a new stormwater management system, a new lighting system, an underground parking ramp and a green roof for the building.
The reimbursement will come from the tax-increment financing the new development generates and will take about 21 years to complete. Then the brownfield authority will capture the revenue for five years and deposit those dollars into its Local Site Remediation Revolving Fund.
City Economic Development Director Kara Wood, also the authority’s executive director, said 616 Development expects 15 new full-time equivalent jobs will be created in the ground-floor commercial space, and the average wages from those jobs will range from $12 to $20 an hour.
When completed, Lofts on Michigan is expected to generate $147,932 in new state and local property taxes, with $24,643 going to the city. Grand Rapids also expects to get $4,992 in new income-tax revenue from the jobs each year.
616 Development has applied to the state for funding through the Community Revitalization Program and has asked the city to designate the residential part of the project as a Neighborhood Enterprise Zone. If approved by city commissioners, the NEZ would reduce the building’s property taxes by as much as 28 percent.
The Midtown Neighborhood Association has joined 616 Development in the NEZ request. Both the Midtown association and the Michigan Street Corridor Association support the project, which is the first new construction effort that 616 Development is undertaking following years of building renovations.
Construction for Lofts on Michigan is expected to begin this spring.