County to sell 82 Ionia

[Pattmost20]

1 hour ago, GRDadof3 said:

Also buried in the article is a link to an article back in April that Franklin Partners is looking at doing an office tower as part of the Celebration Cinema project? 

Yeah that is what caused delay with getting the Celebration project moving, they were in talks with Franklin to come on as a partner.

[GVSUChris]

1 hour ago, GRDadof3 said:

It's somewhat troubling to me that the LIHTC developer is able to offer substantially more for the building. And does there need to be an income restricted project right across the street from another one? (the developer is the one doing the Keeler Bldg).

Also buried in the article is a link to an article back in April that Franklin Partners is looking at doing an office tower as part of the Celebration Cinema project? 

It is the same developer working on the Keeler project and/or they are connected. They intentionally want both projects next to each other for management purposes. I'm all for affordable housing but why do we keep seeing these massive concentrations of low income residences packed into one spot? 

[Paramaribo]

Sounds like the hobo gauntlet is growing. 

The WMHA should move its offices from Jenison and join the fun!

 

[x99]

14 hours ago, joeDowntown said:

Seems odd that there is such a disparity in bids. And if Kendall backed out at $10 Million and Franklin came in at half their original bid, makes me wonder if this building is a difficult renovation. 

Franklin seems like a pretty savvy company, it'd be interesting to hear why they dropped their bid. 

Joe

If you do the math, it will (or should) bother you.  Their bid is about $90,000 per eventual unit, if you discount the value of highly speculative ground floor space.  What does it cost to actually build those units?  Who knows.  Even if this "West Michigan Housing Alliance" makes this work, the housing isn't really "affordable" at all.  It is, by definition, extraordinarily expensive luxury housing that will be populated by low income persons.  Whether that makes sense isn't up to me, though.

Based on their website and past publicly available history, "West Michigan Housing Alliance" has little if any experience or expertise in development work.  "West Michigan Housing Alliance" has existed since all of, oh, 2013, and they often forgot to file their corporate paperwork on a timely basis.  The business address is the personal residence of the "Founding Member and Director". This guy, along with the "Senior Member & Lender" also seem to run (or at least used to run) a mortgage loan shop.  The "Senior Member & Lender" is a "Loan Officer at West MI Housing Alliance/Ascension Capital" according to his LinkedIn page.  Ascension Capital, incidentally, also has its business address as the residence of the "Founding Member and Director" of WMHA.  Something else floating around says the guy is or was  an "investment property advisor".  More on Ascension later.

Not that there is anything wrong with a bunch of mortgage lending guys trying to broaden their horizons, but I have to ask:  Apart from the LIHTC program, would any bank give these guys a loan to do this project based on their knowledge, expertise, financial acumen, and financial wherewithal?  The answer may well be yes.  But, if the answer is not yes, then why would the state finance them with taxpayer dollars?  

Another fun factoid:  WMHA's first project proposal I can find was in Newaygo, and was self-scored about 40 points worse than the next worse project (LIHTC projects use a bunch of scoring criteria to rank how "deserving" the project is).  My guess is that project did not go.  Oh, and they were essentially maxing out the grant request for a project in Newaygo.  Then the Keeler project a couple year later--surprise, surprise--managed to have a score higher than any other proposed project for that funding round.  Now, not only are they maxing out the grant request, but they split Keeler in half to double-max the grant request.

I'm sorry, but if you're just dipping your toe into LIHTC and development, would it not make sense to start small, rather than try to take on absolutely massive projects?  

Oh yeah, and before I forget, just what is Ascension Capital? It seems to be something that its own personnel mixed up with "Ascension Mortgage" which was a mortgage lender they also ran (see above LinkedIn page title).  But as far as Ascension Capital, here's the blurb from a list of "companies ... preliminarily assessed to be eligible for the SBITC Program at the date of assessment per the Program's criteria."

Investment Profile

Sectors: Advanced Materials, Advanced Transportation, Alternative Energy, Defense & Homeland Security, Information Technology, Life Science, Medical Devices, Next Generation Manufacturing, Products ans Services

... and the last guy who shows up as being involved at WMHA also used to be the "Senior Partner" of this outfit as well according to their corporate filings. So what I've identified so far is at least three guys that have run two separate shops who curiously do a lot of running around fishing for tax credits utilizing businesses which, according to all public appearance and filings, appear to have little if anything to show in the way of a track record or assets.  Similarly, I have been unable to determine that WMHA has ever done anything other than apply for tax credits and build a website.  Furthermore, all of the WMHA projects they have proposed (and that I have been able to identify) appear to be "shoot the moon" projects that try to max out the credits.  Could be innocuous.  I really don't know.  Perhaps they are just very ambitious.  

Still, I tend to think if these projects were good projects, a proven operator would be chasing them down, and not a brand new shop that seems to have absolutely no track record.  We have more than a few proven low income operators in town.  I assume the county will do its due diligence, and that the state will do it as well before awarding credits.  I hope we find out, in the end, that WMHA is a deserving operator and is not just a paper tiger with a name designed to sound impressive (they also call themselves the "Great Lakes Housing Authority").  

Edited May 8, 2017 by x99

[MJLO]

3 hours ago, x99 said:

... and the last guy who shows up as being involved at WMHA also used to be the "Senior Partner" of this outfit as well according to their corporate filings. So what I've identified so far is at least three guys that have run two separate shops who curiously do a lot of running around fishing for tax credits utilizing businesses which, according to all public appearance and filings, appear to have little if anything to show in the way of a track record or assets.  Similarly, I have been unable to determine that WMHA has ever done anything other than apply for tax credits and build a website.  Furthermore, all of the WMHA projects they have proposed (and that I have been able to identify) appear to be "shoot the moon" projects that try to max out the credits.  Could be innocuous.  I really don't know.  Perhaps they are just very ambitious.  

 

Based on what you're saying I wonder did they include a hydrogen power plant for any of their projects?  I feel like they should include a hydrogen power plant. 

[GRDadof3]

3 hours ago, MJLO said:

Based on what you're saying I wonder did they include a hydrogen power plant for any of their projects?  I feel like they should include a hydrogen power plant. 

What, am I the only one who got that joke?!  #duanefaustian

[joeDowntown]

2 hours ago, GRDadof3 said:

What, am I the only one who got that joke?!  #duanefaustian

Is Duanefaustian the official name for the architectural style of futuristic Hydrogen Power Plants?  

@x99 - interestesting research. I hope the County does their due diligence. Sounds fishy. 

Joe

 

[GRDadof3]

20 hours ago, x99 said:

If you do the math, it will (or should) bother you.  Their bid is about $90,000 per eventual unit, if you discount the value of highly speculative ground floor space.  What does it cost to actually build those units?  Who knows.  Even if this "West Michigan Housing Alliance" makes this work, the housing isn't really "affordable" at all.  It is, by definition, extraordinarily expensive luxury housing that will be populated by low income persons.  Whether that makes sense isn't up to me, though.

Based on their website and past publicly available history, "West Michigan Housing Alliance" has little if any experience or expertise in development work.  "West Michigan Housing Alliance" has existed since all of, oh, 2013, and they often forgot to file their corporate paperwork on a timely basis.  The business address is the personal residence of the "Founding Member and Director". This guy, along with the "Senior Member & Lender" also seem to run (or at least used to run) a mortgage loan shop.  The "Senior Member & Lender" is a "Loan Officer at West MI Housing Alliance/Ascension Capital" according to his LinkedIn page.  Ascension Capital, incidentally, also has its business address as the residence of the "Founding Member and Director" of WMHA.  Something else floating around says the guy is or was  an "investment property advisor".  More on Ascension later.

Not that there is anything wrong with a bunch of mortgage lending guys trying to broaden their horizons, but I have to ask:  Apart from the LIHTC program, would any bank give these guys a loan to do this project based on their knowledge, expertise, financial acumen, and financial wherewithal?  The answer may well be yes.  But, if the answer is not yes, then why would the state finance them with taxpayer dollars?  

Another fun factoid:  WMHA's first project proposal I can find was in Newaygo, and was self-scored about 40 points worse than the next worse project (LIHTC projects use a bunch of scoring criteria to rank how "deserving" the project is).  My guess is that project did not go.  Oh, and they were essentially maxing out the grant request for a project in Newaygo.  Then the Keeler project a couple year later--surprise, surprise--managed to have a score higher than any other proposed project for that funding round.  Now, not only are they maxing out the grant request, but they split Keeler in half to double-max the grant request.

I'm sorry, but if you're just dipping your toe into LIHTC and development, would it not make sense to start small, rather than try to take on absolutely massive projects?  

Oh yeah, and before I forget, just what is Ascension Capital? It seems to be something that its own personnel mixed up with "Ascension Mortgage" which was a mortgage lender they also ran (see above LinkedIn page title).  But as far as Ascension Capital, here's the blurb from a list of "companies ... preliminarily assessed to be eligible for the SBITC Program at the date of assessment per the Program's criteria."

Investment Profile

Sectors: Advanced Materials, Advanced Transportation, Alternative Energy, Defense & Homeland Security, Information Technology, Life Science, Medical Devices, Next Generation Manufacturing, Products ans Services

... and the last guy who shows up as being involved at WMHA also used to be the "Senior Partner" of this outfit as well according to their corporate filings. So what I've identified so far is at least three guys that have run two separate shops who curiously do a lot of running around fishing for tax credits utilizing businesses which, according to all public appearance and filings, appear to have little if anything to show in the way of a track record or assets.  Similarly, I have been unable to determine that WMHA has ever done anything other than apply for tax credits and build a website.  Furthermore, all of the WMHA projects they have proposed (and that I have been able to identify) appear to be "shoot the moon" projects that try to max out the credits.  Could be innocuous.  I really don't know.  Perhaps they are just very ambitious.  

Still, I tend to think if these projects were good projects, a proven operator would be chasing them down, and not a brand new shop that seems to have absolutely no track record.  We have more than a few proven low income operators in town.  I assume the county will do its due diligence, and that the state will do it as well before awarding credits.  I hope we find out, in the end, that WMHA is a deserving operator and is not just a paper tiger with a name designed to sound impressive (they also call themselves the "Great Lakes Housing Authority").  

Plus, you have to assume that if they pay $10 Million for the property, they're probably going to hit $30 Million for the whole project, especially since LIHTC allows you to splurge and put granite countertops and laminate floors everywhere. I would want to see experience in doing a project that large. Rockford? No problem. Franklin Partners? No problem. 

[Dj Augustine]

It would be more considerate if Kent County would hire an appraiser when trying to determine if they want to sell.

 

 

Edited May 31, 2017 by Dj Augustine

[Telecaster Rex]

8 hours ago, Dj Augustine said:

It would be more considerate if Kent County would hire an appraiser when trying to determine if they want to sell.

 

 

Elaborate please?

[joeDowntown]

3 hours ago, Telecaster Rex said:

Elaborate please?

I don't know exactly what he/she meant but to me, doesn't it seem like you'd figure out a fair price, see if that price gets you what you need to move people, etc., THEN put it on the market? They put it up for bid (twice) and have just decided to figure out if it makes financial sense to move? 

Joe

[MJLO]

http://www.mlive.com/news/grand-rapids/index.ssf/2017/06/kent_county_moves_forward_with.html

This makes me nervous.  Perhaps I could use a perspective adjustment but my fear is that they will sell this to the Faust-esque W. Michigan housing alliance for $10million dollars.  I don't feel this and the Keeler going LIHTC would be the best uses for the area. 

[Dj Augustine]

The $10 million offer was not close to following the bid process that the County required.  Rockford's offer followed it with the required bid bond attached.  They even offered a performance bond for the entire purchase price if selected.  It would be a real strech for the county to go with the other offer.  

 

[x99]

1 hour ago, Dj Augustine said:

The $10 million offer was not close to following the bid process that the County required.  Rockford's offer followed it with the required bid bond attached.  They even offered a performance bond for the entire purchase price if selected.  It would be a real strech for the county to go with the other offer.  

There's another interesting potential side effect if Kent County were to sell the property for LIHTC.  I have to assume the property ultimately would be worth quite a bit less than what it would eventually be worth versus a sale to someone like Rockford.  That would ding property tax revenues for quite some time to come.  I wonder if they look at that when evaluating bids.

[GRDadof3]

15 hours ago, x99 said:

There's another interesting potential side effect if Kent County were to sell the property for LIHTC.  I have to assume the property ultimately would be worth quite a bit less than what it would eventually be worth versus a sale to someone like Rockford.  That would ding property tax revenues for quite some time to come.  I wonder if they look at that when evaluating bids.

I have to agree with Jim Talen in the article too. Even with the $10 Million proceeds from the sale, the county has to spend $19 Million (will probably end up being 30 - 40% higher by the time they finish construction) to build a new county facility at the Fuller campus. And more LIHTC housing on Division, yay... I'm all for the building being re-used to its full potential, but this deal stinks all around. 

 

[x99]

3 hours ago, GRDadof3 said:

I have to agree with Jim Talen in the article too. Even with the $10 Million proceeds from the sale, the county has to spend $19 Million (will probably end up being 30 - 40% higher by the time they finish construction) to build a new county facility at the Fuller campus. And more LIHTC housing on Division, yay... I'm all for the building being re-used to its full potential, but this deal stinks all around. 

Doesn't make sense to me either after I read the article.  Why pay more money to replace space they already have?  Why not expand the parking ramp, and rent out the empty space in the building and generate income?  Dumb.  It would be nice to see the dead space on the main floor gone, but that's a rather selfish concern in light of what looks an awful lot like wasting $20 million for no good reason.  

[GRDadof3]

1 hour ago, x99 said:

Doesn't make sense to me either after I read the article.  Why pay more money to replace space they already have?  Why not expand the parking ramp, and rent out the empty space in the building and generate income?  Dumb.  It would be nice to see the dead space on the main floor gone, but that's a rather selfish concern in light of what looks an awful lot like wasting $20 million for no good reason.  

Taxpayer subsidies on the sale and moving of the county, taxpayer subsidies for the LIHTC tax credits (locked in for what, 50 years?), all for what? Couldn't you just give 100 households $20 Million+ to split and you'd pretty much eliminate those families' need for low income housing? 

[joeDowntown]

It really seems like an"anywhere but here" situation. "Penny foolish, pound foolish?" They should spend some money to configure the space to work for modern uses (probably increasing capacity), rent out extra space (as someone mentioned above) and stay put. 

Joe

[wingbert]

"Other issues with the downtown building, Jones said, include limited access to parking ," - Perhaps not the primary driver but once again this topic comes up as part of the discussion.  Interesting.

[walker]

25 minutes ago, joeDowntown said:

It really seems like an"anywhere but here" situation. "Penny foolish, pound foolish?" They should spend some money to configure the space to work for modern uses (probably increasing capacity), rent out extra space (as someone mentioned above) and stay put. 

Joe

At one time I believe there were other tenants (besides the bar) but then for good reason a few years ago they put in airport style security screening at the front door.  The screening isn’t something I would guess most potential tenants would see as a desirable feature.

What does seem to be a possibility to me is to move the county IT department into the unused space then sell their little building up the street which is where the county intends to move the criminal division of the prosecutor’s office.  The extra security for IT I think would be a good thing.

Another thing, don’t know how true it is but I heard a year or so ago that the 82 Ionia parking ramp is in bad shape and needs to be replaced.      
 

[x99]

2 hours ago, walker said:

Another thing, don’t know how true it is but I heard a year or so ago that the 82 Ionia parking ramp is in bad shape and needs to be replaced.      
 

Even describing that thing as a ramp is charitable.  It's more like a parking lot with a basement.  If they replaced it and reconfigured they would be able to rent out valuable parking spaces and office space and put in some ground floor retail activity.  Make money, instead of burning it up on a new building.  Maybe even partner with a property manager to pull it all off.  

As far as the screening and security... It bothers me.  This is not a good way to deliver services if they are doing screening on the Community Housing and Development and Friend of Court.  Probation, fine.  But treating people (mostly poor) like criminals who need to be screened for some sort of bizarre "security" purpose is not acceptable.  Fix the configuration, rebuild/expand ramp and the empty space would become much more rentable.  

[GRDadof3]

11 minutes ago, x99 said:

Even describing that thing as a ramp is charitable.  It's more like a parking lot with a basement.  If they replaced it and reconfigured they would be able to rent out valuable parking spaces and office space and put in some ground floor retail activity.  Make money, instead of burning it up on a new building.  Maybe even partner with a property manager to pull it all off.  

As far as the screening and security... It bothers me.  This is not a good way to deliver services if they are doing screening on the Community Housing and Development and Friend of Court.  Probation, fine.  But treating people (mostly poor) like criminals who need to be screened for some sort of bizarre "security" purpose is not acceptable.  Fix the configuration, rebuild/expand ramp and the empty space would become much more rentable.  

I'd bet that the Rowe would be interested in picking up parking spaces if they were expanded there. 

[walker]

2 hours ago, x99 said:

As far as the screening and security... It bothers me.  This is not a good way to deliver services if they are doing screening on the Community Housing and Development and Friend of Court.  Probation, fine.  But treating people (mostly poor) like criminals who need to be screened for some sort of bizarre "security" purpose is not acceptable.  Fix the configuration, rebuild/expand ramp and the empty space would become much more rentable.  

As much as I wish it was otherwise, security is necessary there, just like it is at the courthouse.  Certainly the vast majority of people aren’t a problem but there are a lot of unhappy people with anger issues and poor self-control that pass through there and generally they are not happy to be there.   The Community Development Department isn’t a problem but people going there have to go through the same front door and that’s the same problem a tenant would have. Possibly some kind of reconfiguration might work but it would involve completely segregating the secure and non-secured portions of the building. 

[walker]

Commissioners change their minds:

kent county scraps plans to sell 82 Ionia

[organsnyder]

Glad to see this. This never felt like the right move—either financially, or for the effectiveness of county operations.