GRAND RAPIDS — The $2.5 million deal closed last Monday and was another prime example of how businesses work with nonprofit organizations and the city to make Grand Rapids a better place.
The result is that Dwelling Place, the city’s largest nonprofit property manager, will have a new home and Cherry Street Health Services will have a new dental clinic at 101 Sheldon SE.
Both Dwelling Place and Cherry Street Health Services are expected to begin moving in on March 15.
Spectrum Health, National City Bank, Grubb & Ellis/Paramount Properties, the Peter T. Wege Foundation and the city’s Economic Development Office all pitched in to make the transaction work.
Dwelling Place will move its offices from 339 S. Division Ave. to the 10,000-square-foot second floor, a shift that will give the agency four times the space it has been working in for years. Cherry Street will open its dental clinic on the ground floor, which will primarily serve low-income residents, and add 20 employees to its staff.
Spectrum Health, the region’s largest health care provider, donated the Sheldon Avenue building, a two-story, 20,000-square-foot structure with an appraised value of $400,000. The hospital had been using the building for storage.
National City Bank, just named by the Small Business Administration as the top small-business lender, entered into a limited liability corporation with Dwelling Place and Cherry Street and bought the historic tax credits that accompany the renovation, a move that made the bank the primary owner of the project.
“They are contributing approximately $750,000 to it. It’s going to go up or down a little bit depending on what our final costs end up being. But it’s approximately $750,000 of equity, plus they’ve already approved and funded a $1.6 million loan,” said Dennis Sturtevant, Dwelling Place executive director.
“What the bank essentially did for us and Cherry Street was reduce the amount of money that we had to raise to renovate the space because of the $750,000 contribution they put into the project,” he added.
Jim Maskell, of the National City Grand Rapids office, worked with both organizations on the loan. Michael Taylor, president of the National City Community Development Corp. in Lansing, handled the investment end.
The Wege Foundation gave Dwelling Place $500,000 for the renovation work. A lot of others also contributed. George Larimore, an investment specialist with commercial real estate firm Grubb/Ellis Paramount, came up with the creative financial structure that made the project possible.
“George was very key to this whole thing,” said Sturtevant. “George’s knowledge and expertise of the tax code and the way in which we could generate equity have really helped us, both in the Ferguson project and other projects that we’ve been involved with.”
Chris Shea, Cherry Street director, said he estimates the new dental clinic will serve 6,000 patients in its first year. Still, his organization would like to do more.
“We are the largest provider of dental services to low-income people in the state,” said Shea. “But yet in the Grand Rapids area, we and the few others who accept Medicaid, or have other discounting arrangements, are only enough to fulfill about a third of the need of low-income people out there.”
Dan Oegema of the Economic Development Office helped get obsolete property tax credits for the project, the first time these credits were used here. What that means is the building’s property levy is capped at the amount at the time of purchase, so all the improvements made to the structure aren’t added to the tax bill. The taxes are capped in return for reusing a vacant building and for adding jobs to the city’s economy.
“That was another way to keep the project cost effective for us,” said Sturtevant.
The building at 101 Sheldon marks the final phase of the Ferguson Initiative, the reuse of the former hospital by Dwelling Place. Much of the renovation work is complete. Just the entrance to the Cherry Street clinic was left on the project’s to-do list.
“In the new facility, we’ll have a large boardroom and employee training room, which Cherry Street and Dwelling Place will utilize, and others in the community will utilize from time to time as well. And we’ve got some good space for small conferences,” said Sturtevant.
“Because we’re continuing to try to expand our involvement in different areas, it gives us a little room for growth. It’s going to be great space.”