The 64,600-square-foot residential housing project at 240 Ionia Ave. SW will now include a two-story parking deck, bumping the total cost to $15 million. Courtesy of Grand Rapids DDA
At its last meeting, the Grand Rapids Brownfield Redevelopment Authority unanimously approved an amended work plan to redevelop a vacant parcel at 240 Ionia Ave. SW and authorized a development and reimbursement agreement for the project being done by Brookstone Capital.
Brookstone Capital of Midland plans to build a $15 million, seven-story residential and retail structure on the property across Ionia from Heartside Park. The project includes creating 60,000 square feet of space for 48 one- and two-bedroom apartments, mostly the low-income variety, and 4,600 square feet of space for ground floor retail.
In addition, the blueprint includes a two-story parking deck. The parking facility wasn’t included in the first version of the construction plan; its addition raised the cost of the project from $13.5 million to $15 million.
“The parking garage will serve the retail space and the apartments,” said Kara Wood, executive director of the redevelopment authority.
The brownfield plan the authority amended was approved in 2005, but not for Brookstone Capital. The brownfield was awarded to Fulton and Division LLC, which proposed to build a 10-story mixed-use structure on the Ionia site and at 243 Commerce Ave. SW, just around the corner.
That project never went forward, and the authority terminated its agreement with the developer in 2011, but the brownfield designation remained available for the site. Brookstone Capital Principal Karl Chew said he kept a close eye on the property after it received brownfield status.
Of the $15 million the firm is investing in the project, $2.47 million qualifies as eligible activities under the brownfield statute. Infrastructure improvements of $2 million easily make up the bulk of that amount, with another $133,700 going toward site preparation, $321,540 as an acceptable contingency cost, and $10,000 for preparing the work plan the authority approved.
The infrastructure upgrades include new sidewalks and curbs, but the parking deck accounts for most of that spending. Privately funded parking facilities, above or below ground, as part of a project are acceptable activities under the brownfield law.
Wood said the projected tax-increment reimbursement revenue from the project should be around $540,000 and will come from the parking deck and retail space because the residential portion of the project has been granted a payment-in-lieu of taxes, or PILOT. A portion of the project’s financing is coming from the state’s low-income housing tax credits.
Both the Downtown Development Authority and the City Commission awarded the development a PILOT, and that means Brookstone Capital will pay the city 4 percent of its annual rental income for 35 years instead of property taxes.
Brookstone Capital got similar deals for its projects at 209 S. Division Ave. and 217 S. Division in 2010. Those sites now house the Division Park Avenue Apartments. Serrano Lofts at 17 Williams St. SW also was granted a PILOT then. Awarding one to a low-income housing project is a fairly standard procedure in the state.
The firm’s latest project on Ionia is the eighth in the city since 2005.
“The City Commission is very supportive of Karl’s work,” said Wood, who is also the city’s economic development director.
The project’s location is a few blocks south of Van Andel Arena and a few blocks north of the new Downtown Market being developed by the DDA and Grand Action Committee. That site also falls within the target area of the DDA’s Arena South Visioning Plan, which has a goal of increasing residency in the area, among other objectives.
“We need more residential development. We need more people living there,” said Lynee Wells, an urban planner at Williams & Works, a consultant on the visioning plan with Cornerstone Architects and Virdis Design.
Progressive AE designed the Brookstone Capital project and the Wolverine Building Group will manage the construction, which is expected to begin in June.
“They are expecting to complete the project by late summer 2014,” said Wood.