Third Coast Development principals Max Benedict, David Levitt and Brad Rosely are looking at every angle of their company’s strategy and asking: What if?
If there’s no dialogue on how they develop their projects or it’s all positive talk, that’s a bad sign, Benedict said.
A lot of Third Coast’s discussions obviously are positive; otherwise, they wouldn’t have so many shovels in the ground across the city, including the Mid-Towne Village developments, Diamond Place, 25 Jefferson and the affectionately named “Leo & Al” project on the corner of Leonard Street and Alpine Avenue.
“A lot of our project discussions start with the question of ‘what if?’” Benedict said. “We’re not going to say, ‘It’s all good,’ or ‘Don’t say any bad words.’ With the numbers we’re building at, we’re comfortable, even with our doomsday scenarios with any of our projects. They’re all a solid game plan.”
Benedict said Third Coast executives make a point of looking beyond the current development boom in Grand Rapids to make sure they’re not doing more than they should. It helps that he’s worked with a consultant that called it the second-best market for development in his 35 years of studying developing cities.
The optimistic outlook is why Third Coast currently is embarking on several projects as it finishes up several others.
Most recently, Third Coast finished the nearly $30 million, 142-room Hampton Inn & Suites at Mid-Towne Village on Michigan Avenue, which has sold out most weekends since its official opening earlier this year.
As the hotel was readying for opening day, Third Coast started work on two apartment buildings on the northern corners of Michigan Street and Union Avenue.
The building at 601 Michigan St. NE, slated to finish May 1, is three stories with eight apartment units, and already has a ground-floor retail tenant.
The larger of the two buildings, at 555 Michigan St. NE, has 18 apartment units and a larger, 3,500-square-foot retail space. It’s expected to be ready for move-in June 1, and while it is attracting interest, the retail space so far is proving to be too large.
“We have a ton of interest in 1,500 and 2,000 square feet,” Benedict said. “We could divide it, but every one would want the corner space, so if we divide it, all of a sudden there’s a good and bad space, instead of one good space if we can find the right tenant.”
The hotel and apartment projects, along with the Women’s Health Center, Park Place Condominiums and the mixed-use office building that includes The Omelette Shoppe and El Barrio, are all in a three-block area Third Coast purchased more than a decade ago. It expected to see approximately $27 million worth of development in the area, but it’s well past that — nearing $100 million, according to a previous Business Journal interview with Levitt.
Further east on Michigan Street, closer to where Third Coast developed Lumberyard Lofts at 855 Michigan St. NE, the company is nearly ready to break ground on the 150-unit Diamond Place, where the Proos Manufacturing facility currently sits.
Benedict said Third Coast closed on the property three weeks ago, and Proos is in the process of moving to a new facility on Oak Industrial Drive.
Once Proos is fully moved, Third Coast will begin an accelerated construction timeline, with a target demolition date of July.
“It’s going to be about an 18-month build schedule — very aggressive,” Benedict said. “That would hopefully target us to the end of the year in 2017, and there’s … tax benefits so we have a really aggressive schedule to hit that date.”
Third Coast is in “advanced talks” with a grocery store partner for Diamond Place, along with restaurant groups for two other ground-floor retail spaces.
Much of Third Coast’s focus is on Michigan Street, but the developers are beginning to spread the wealth elsewhere in the downtown area.
In October, Third Coast purchased the four-story 25 Jefferson Ave. SE building and plans to turn it into a 21-unit apartment building. The developers are slated to go in front of Downtown Grand Rapids Inc. April 13 to push for an extra two years on the Obsolete Property Rehabilitation Act tax relief program for the project.
Typically a 10-year deal, Third Coast hopes to get two additional years, based on new programs that include providing tenants with bus passes and converting a building to be at least 25 percent ADA compliant.
The bus pass incentive could actually end up costing Third Coast money in the long run, but Benedict said it’s worth it to be a good community steward.
“We’re willing to invest more to not necessarily have economic return but to have that social return,” Benedict said. “We’re going for that, but the cool thing is, the city is trying to make it that much easier.”
On the northwest side of town, on the southeast corner of Leonard Street and Alpine Avenue, Third Coast is in the very early stages of a potential $7.4 million mixed-income apartment building. The development hinges on whether the company gets Low Income Housing Tax Credits for the project from the state. Third Coast applied April 1 and will apply again in October if this request isn’t accepted.
The development would include 36 apartments, of which 28 would be affordable units, and 3,000 square feet of retail space. The Grand Rapids Planning Commission gave Third Coast conditional approval to demolish a duplex behind the property for a parking lot, should the project move forward with affordable housing.
Third Coast recently spent approximately $25,000 to update the current building, so if the development falls through, they can at least, “worst-case scenario, continue to be good neighbors,” Benedict said.
Best-case scenario for the “Leo & Al” development is that Third Coast will be able to spur even more development in the neighborhood.
“You have (Mitten Brewing Co. and Long Road Distillers) on one side (of Leonard), and it’s inching westward,” Benedict said. “If we put up this post, then stuff in the middle becomes really attractive to other developers. Hopefully, they’ll say, ‘This stuff is rockin’ and rollin’ — let’s get in the middle.’
“There are underutilized buildings; the bones are there. We’d love to see it transformed into a vibrant area.”