Tuesday A Last-Ditch Hotel Pitch

    GRAND RAPIDS — At a luncheon meeting on Tuesday, city commissioners will learn something that a few of them have wanted to know for years — the current structural status of City Hall.

    The big twist in their learning curve, though, is that commissioners won’t be getting a report from city staff. Instead it will come from Gallium Group LLC, a development partnership that wants to build a convention center hotel on Calder Plaza and a new City Hall on a yet-to-be determined downtown site.

    Gallium Group, a partnership between Blue Bridge Ventures LLC of Grand Rapids and Houston-based Hines Interests LP, will have 90 minutes Tuesday at a rebuttal meeting to convince at least four commissioners that they can trade their current 38-year-old building for a new one and also get a new, tax-generating, 400-room, high-rise hotel across Monroe Avenue from the new convention center that opens in five weeks.

    And here’s the kicker: Gallium said the transaction won’t cost the city any more money than it is now spending to operate and upgrade the existing City Hall.

    “The meeting is about credibility,” said Bob DeYoung, a partner at Miller, Canfield, Paddock & Stone, who will serve as a moderator for the developer’s presentation.

    At the same time, Gallium will ask for a six-month extension of the one-year option the firm has to buy Calder Plaza and the Government Center parking ramp underneath it. The option expires Wednesday and Gallium wants the extension so commissioners can have ample time to digest the numbers and to assess the structural report they will be given.

    “The beauty of it, from the commissioners’ standpoint, is it will really give them a chance to evaluate the credibility of the information that we are going to give them,” said DeYoung.

    Gallium won’t reveal any numbers until high noon on Tuesday, an effort on their part to keep the figures clear for commissioners to grasp. But at least four qualified experts in their respective fields will testify to the current condition of City Hall and to how the numbers affect, or don’t affect, city coffers.

    Blue Bridge Ventures CEO Jack Buchanan told the Business Journal that Gallium has spent close to $250,000 since June to gather the information that commissioners will hear. The money was used to hire structural engineers and Americans With Disabilities Act experts to examine City Hall and financial specialists to explain the finer points of the transaction’s costs.

    “We didn’t want to spare any expense in the way we evaluated anything,” said Buchanan, who also claimed that the city didn’t allow his inspectors to photograph certain portions of City Hall for their report to the commission.

    The gathering is being held in response to a June meeting when city staff had 90 minutes to tell commissioners that the deal would cost the city $67 million over 30 years. An attempt to end the purchase option then was defeated by a 5-to-2 vote, the same margin that allowed Gallium to pay $25,000 for the exclusive right to buy the plaza.

    So how much is the plaza worth? It’s hard to tell.

    Gallium offered $11.3 million for the plaza and its underground parking ramp in June and promised to spend nearly $6 million for ramp repairs and $2 million on plaza improvements. But the city said those figures weren’t high enough because it could earn roughly $98 million from parking receipts over the 30-year financing period.

    Three years earlier, however, Buchanan put in a $21 million bid for both and was accused of attempting to bribe city officials because his offer was at least twice what the property was worth.     

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