The Grand Rapids City Commission unanimously approved an option agreement with the Grand Rapids-Kent County Convention/Arena Authority (CAA) for the sale of a portion of the city property at 201 Market Ave. SW.
The city’s approval follows an action by the CAA for the potential location of a 14,000-seat amphitheater at the 201 Market site.
The option agreement provides for the sale of approximately 11.6 acres of the northern portion of the approximately 17.5-acre 201 Market property estimated at up to $24.5 million.
The property appraisal takes into account the CAA’s investment in the decommission and relocation of the east side trunk sewer and costs related to the demolition of existing site improvements. The final sale price will be determined based on the appraised value per square foot of property established in the memorandum of understanding and the amount of property required for development of the amphitheater project.
The city teamed up with community partners in November 2020 on an agreement to move the eastside trunk sewer — a longstanding barrier to the future redevelopment of the Market Avenue corridor. The sewer relocation project will extend from Fulton Street to Wealthy Street with construction scheduled to begin this spring and be completed in spring 2022. The partnership created the framework for this sale of the city’s 201 Market property to the CAA.
The city, CAA, AHC Hospitality and 63 Market Avenue Holdings LLC are the principals behind this redevelopment approach. Under the November agreement, the parties involved will share the estimated $18.6 million cost of the relocation. Cost share is as follows: private entities, $7,383,942; CAA, $5,000,000; and city of Grand Rapids, $6,252,643.
“This partnership, I think, embodies the best of public private partnerships,” Deputy City Manager Eric DeLong said. “It has worked really well for us in this community and delivered other major investments that have moved us forward, and in this case, to help us with economic recovery and reinvestment as we move out of the pandemic.”
The city plans to use sale proceeds, in part, for relocation of city facilities from 201 Market, development of the recreational river’s edge along the riverfront property and other potential investments in service of the city’s strategic plan, including providing support for the affordable housing fund.
“We are going to take some pretty prime land … and have a greater public benefit with the amphitheater that’s very, very timely, considering the amount of outdoor engagement that we’ve learned is needed for people to enjoy during COVID,” City Manager Mark Washington said. “But also, there will be amazing community benefits created … we will be able to fund more adequately the community investment fund that will also allow us to create more funding in our affordable housing fund, so we are really accomplishing a lot.”
The development will retain the waterfront frontage for equitable recreation purposes, aligning with the city’s River for All strategy. The CAA and Grand Rapids also will collaborate on use of portions of the amphitheater property for passive recreation when not in use for events. The balance of the 201 Market property will be reserved for future private development.
With the approval of the option agreement, the CAA will proceed with its final due diligence with amphitheater project partners. The option agreement anticipates the CAA will exercise the option by June 30 but provides for an extension of that due diligence period upon agreement of the parties. If the CAA proceeds to exercise its option, the option agreement anticipates the CAA will close on the property by Dec. 31 unless otherwise extended by agreement of the parties.
The terms of the option provide for payment of $10 million at closing with the balance due in equal installments over 10 years.
The initial $10 million down payment from the sale to the CAA and future proceeds from the sale of the remaining portions of the 201 Market property will be deposited into the community investment fund to be established by the city.
If the project does not proceed, the city must then pay the CAA back the $5 million it invested in the trunk sewer decommissioning. DeLong said the city has made arrangements for that possibility.