Wheeler Development granted extension for due diligence on downtown project

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With the COVID-19 climate, WDG now describes The Wedge project as a 270,000-square-foot mixed-use building, still comprised of residential, commercial, office and parking but with more emphasis on residential development and less emphasis on office development, leading to a new approximate investment of $50 million. Courtesy Wheeler Development Group

After being put on ice by COVID-19 and last year’s state-mandated freeze on construction, Wheeler Development Group’s plans for The Wedge still are underway.

The Grand Rapids City Commission recently granted an extension to its one-year agreement with Wheeler Development Group (WDG) to begin due diligence and negotiate a development agreement for a portion of 22 Ottawa Ave. NW, also known as The Wedge.

The city commission originally approved the agreement in January 2020, and WDG began due diligence the following February. The developer proposed a 24-story mixed-use building with retail on the ground floor, five levels of parking, and office and residential uses above, consisting of a total of approximately 310,000 square feet and an investment of $55 million.

However, WDG’s plans were another casualty of the pandemic. Once the dust cleared, WDG remained interested in pursuing the project and continues to be motivated by the prime location and potential of the property.

“This is a two-yearlong construction project,” WDG CEO John Wheeler said. “Right now, there’s not a major project on the boards here, so it’s not really competitive. Right now, the timing couldn’t be better. Bringing this online is perfect for our portfolio. Interest rates are great. I don’t know how that’s going to play out with the new political environment, but I honestly don’t think they’re going to raise interest rates.”

The developer still needs more time to fully understand and respond to any changes that may occur in the office and/or residential real estate markets to ensure the development is financially feasible and results in a successful project for both WDG and the city.

To that end, the city commission extended the original option term to Oct. 1, as well as an additional 12-month extension of the option term — to Oct. 3, 2022 — upon notice and deposit of an additional $30,000.

With the COVID-19 climate, WDG now describes The Wedge project as a 270,000-square-foot mixed-use building, still comprised of residential, commercial, office and parking but with more emphasis on residential development and less emphasis on office development, leading to a new approximate investment of $50 million.

“We’re not leaning more toward residential. We’re leaning away from office,” Wheeler said. “When our office tenants all canceled on us dude to COVID — and with the new office environment — we still wanted to keep it above 20 stories. So, we’re increasing our residential and reducing office.”

With The Wedge, WDG said it hopes to continue to add to its downtown apartment portfolio. Wheeler said his firm has had considerable success with its other downtown apartment sites, and The Wedge is prime location for more.

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