Parkland Wants More Time In Ren Zone


    GRAND RAPIDS — Parkland Investments Inc. has the distinct honor of being the first firm to request a 15-year extension of a Renaissance Zone designation under the policy city commissioners recently approved.

    But a few commissioners may be reluctant to extend the zone, which ends in five years, and at least two developers are urging commissioners to deny the request.

    Parkland Investments, headed by developer Jon Rooks, wants the nearly tax-free status extended for the former Sligh Furniture building at 446 Grandville Ave. SW, a building that was occupied by Israels Designs for Living’s The Other Store until recently.

    Parkland plans to invest more than $30 million into the 665,000-square-foot structure and convert the building into 400 apartments with some retail and office space. Rooks said the project would create 30 permanent jobs and more than 200 construction jobs for the 2.5 years it will likely take to renovate the building. Rooks estimated that 600 residents would live in the apartments.

    Should the city grant the extension, it would begin next year and run through 2023. City Economic Development Director Susan Shannon said the city would give up $8,472 in tax revenue each year from the extension.

    When commissioners agreed to make extensions available to property owners located in the city’s original zone that opened in 1997, 1st Ward Commissioner Roy Schmidt and both 2nd Ward commissioners, Rick Tormala and Rosalynn Bliss, said they would hesitate to extend a designation for residential developments.

    In addition, correspondence from two downtown developers flatly opposed giving Parkland the extension.

    “First, tenants don’t pay real-estate taxes, the property owner does. The party who stands to benefit is Mr. Rooks as owner of the apartment project not paying real estate taxes to the city,” wrote Todd Schaal, who heads The Estes Group Companies.

    “Second, the tenants most likely to be found in an apartment project like that do not have a significant income problem. Also, there are a number of good existing and important apartment complexes in the area that would be hurt by this project receiving preferential treatment, not to mention a couple of recently approved projects that did not receive Ren Zone status,” Schaal added.

    Second Story Properties President Sam Cummings told commissioners in an e-mail that he was pleased they ratified the extension, especially if commercial investments that retain and create jobs are the result.

    “My reservation is when it comes to residential, as I believe we have created enough value in the city over the last 15 years to make most projects feasible without a Ren Zone extension, and if there is to be more residential Ren Zone, how do you justify ‘picking’ which projects get that sugar coating (as it does represent a change in the rules),” wrote Cummings.

    “I think that you will find that some of these projects will happen without referenced extension,” he added.

    Rooks told the city the sale is expected to close on Jan. 7, and the finished project would provide the city with income tax revenue of $165,000 annually, plus the income tax from the construction jobs. He said the development would act as a catalyst for other projects along the Grandville Avenue and Wealthy Street corridors.

    “Not many people would try to save this huge old building. But we have a great team assembled to attack challenging projects and enjoy the challenge,” wrote Rooks in his application, which was accompanied by a $5,000 application fee.

    “Our successful track record with Union Square, the Boardwalk, the People’s Building, and Monroe Terrace suggests we can handle a project of this size,” he wrote of his firm’s other residential developments.

    A Ren Zone completely waves the Single Business Tax, state and local income taxes, local personal and real property taxes, the utility users tax, and the Michigan 6-mill state education tax for the first 12 years of a 15-year extension and escalating portions of those taxes for the remaining three years.

    Under the new policy, though, commissioners can chose to extend a zone for less than 15 years.    

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