The predevelopment cost for the new urban market that Grand Action proposed last month shrank by $100,000 last week when the Downtown Development Authority unanimously agreed to fund its design by that amount.
“The extent to which the DDA wants to partner is critical (to the project). You own the land,” said David Frey, a co-chairman of Grand Action with John Canepa and Dick DeVos, to board members.
Ted Spitzer, the project’s Portland, Maine, consultant and owner of Market Ventures Inc., has scaled the cost for the initial architectural, legal, engineering and marketing work from a low of $652,000 to a high of $900,000.
“In all likelihood, the total cost will be somewhere in between, but at this stage we don’t know where. I recommend that Grand Action raise the full $900,000 for predevelopment, which is a reasonable amount for a $27 million project,” said Spitzer.
“These funds need to be secured soon to keep the project on schedule,” he added, while noting that work would have to get under way this winter to open the market by spring 2012.
Besides making the financing commitment, money that will come from the DDA’s tax-increment fund, board members also agreed last week to help Grand Action look for government grants that could pick up a portion of the predevelopment cost. They also agreed that the market is a good use for the site the DDA owns, and to enter into talks with Grand Action about selling, leasing or possibly donating the land on Ionia Avenue near Wealthy Street for the project. The land is at the far southern edge of the board’s district.
The DDA bought the property two years ago for $2 million. The board’s Executive Director Jay Fowler said a surface parking lot had been a standby use for the land, especially if the two lots the DDA owns just south of Van Andel Arena had been developed. “That was always an option,” he said. “But this seems to be a better opportunity.”
With three new parking ramps in the Heartside Business District — two already built and one under construction — Fowler didn’t think that parking was as much of an issue now as it was a few years ago. “We really put in a lot of parking for that area,” he said.
Spitzer, who addressed the DDA last week, said having the right site is one of the key elements for a successful market, and he liked the board’s property. “It’s critical to have surface parking around the market,” he said of the site that is capable of offering more than 200 spaces. “This site has great advantages. It helps extend the downtown.”
Spitzer said the property is also visible from U.S. 131 and accessible by foot, bus, car and truck. He also pointed out that the four-acre site has a potential to influence a revitalization of the immediate area, which has a few vacant buildings nearby that could be renovated and reused. “It’s very important that the adjoining properties be developed in a compatible fashion,” said Frey.
The DDA previously has partnered with Grand Action on the construction of the arena and DeVos Place. In fact, the DDA owned the arena for its first five years until it relinquished that responsibility to the Convention and Arena Authority when that body was formed in April 2000. But the DDA still makes the bond payments for the building’s $55 million package that the board approved for its construction. The DDA also committed $10 million to the convention center’s construction.
“There are a number of issues yet to be resolved, including funding,” said Frey of the market. “This (project) does not lend itself to a lead donor. Once we get the predevelopment money, we will be able to tell you more.”
He added that Grand Action has asked the area’s six major foundations to help with the predevelopment costs.
“Ownership is an issue and management is an issue. We will continue to work on both issues,” said Frey. Spitzer said most urban markets are managed by nonprofit organizations. “The trend has been toward nonprofit groups. The nonprofit model seems to be the best,” he said.
DDA member Brian Harris, seemingly speaking for the entire board, said he liked the idea of downtown having an urban market.
“This is in the wheelhouse of Grand Rapids. One thing that is very important to me is the multiplier effect,” he said. Harris wasn’t only referring to the potential jobs and developments the project could inspire, but also the “renown” the market could bring to the city. “This might be that multiplier effect.”