A key urban development situated on Michigan Street’s Medical Mile received the green light last week to go ahead with its second and final phase.
Grand Rapids city commissioners gave their blessing to a revived brownfield plan for Mid Towne Village, and now Third Coast Development Partners can invest $31 million more into what is expected to be a $68 million project when the next phase is completed.
Dave Levitt and Brad Rosely, partners in Third Coast, want to put up a 94,000-square-foot hotel and parking ramp on one of the development’s surface parking lots and a 30,000-square-foot office building on the other lot. The hotel will offer 149 rooms at an investment of $25 million, while the office structure will have underground parking at a cost of $6 million.
“If we can get this project, we can put an entire bow around this project,” said Rosely prior to the commission’s vote. “The hotel should help the restaurants on Michigan Street.”
Mid Towne Village is located near Michigan Street and College Avenue NE. It was created as a walkable mixed-use project and has a 15,000-square-foot urban park. It also has 100,000 square feet of medical office space, 60,000 square feet of professional office space and 40,000 square feet of Chicago-style brownstone condominiums known as Park Row Condos.
That portion of the project was completed in 2008. It won the Project of the Year Award from the Commercial Alliance of Realtors when it was given its initial brownfield in 2004. The property was seen as blighted under state law. About $37 million was spent on that construction stage.
“The anticipated investment in phase two of the project is $31 million, bringing the total investment at the property to $68 million,” said City Economic Development Director Kara Wood.
“The developer estimates that the second phase of the project could result in the creation of 70 new jobs and the retention of 50 jobs, which would be transferred to the property from other locations in the city. This would bring total employment at the Mid Towne Village campus to approximately 420,” she added.
When Third Coast was awarded its initial brownfield, the firm had eligible costs of $3.4 million and so far has received $2.6 million in tax-increment reimbursements, which run through 2017. The second phase has an eligible brownfield cost of $7.5 million, with most of that reimbursable amount coming from the hotel’s parking deck and the office building’s underground parking. Those reimbursements are likely to be completed in 2028.
“This phase of the project is also seeking support from the Michigan Community Revitalization Program, and the local tax-increment financing will serve as the local match for that request,” said Wood.
The city will exempt Third Coast from half of its property taxes as its part of the reimbursement, but will still collect $127,500 annually from the project. In addition, the city expects to gain $50,500 each year in new income-tax revenue from the jobs the second phase is expected to generate.
Third Coast hopes to begin construction on the hotel this summer and finish it in two years. Work on the office building should start in 2015 and be finished in a year.
The city’s Brownfield Development Authority and Economic Development Project Team supported the revised brownfield plan.