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GRDadof3

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  • 4 years later...

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I hope not. It was not stated in the heritage hill email. If it is I will vigorously protest it, as there is already an excess of low income housing in the vicinity; either designated or market rate that is so run down that it has become low income housing by default.

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Thanks for the heads up.  I must have missed it in my newsletter.  The last thing we really need in the area is more crappy low income housing.   Most of this crap turns into crime dens owned by absentee landlords--Stuyvesant, anyone?  This is NOT a positive development, and I hope it isn't presented as such.  There is already more than enough low income housing the area, and plenty of demand for market rate.

 

The disturbing truth about LIHTC is that it is nothing but a massive and unnecessary state subsidy which is incredibly wasteful, destabilizes neighborhoods, and degrades property values for the foreseeable future.  The numbers all come in about the same for Chews projects.  Here's some quickie math:

 

131 Units  //  $36 million   http://www.mlive.com/business/west-michigan/index.ssf/2012/09/developer_plans_to_break_groun.html

45 Units  //  $13 million    http://www.rapidgrowthmedia.com/devnews/Brkstne1007.aspx

48 Units //  $15 million  http://www.mlive.com/business/west-michigan/index.ssf/2013/02/new_apartment_project_and_rest.html

 

Ignoring the retail space, the cheapest of these things averages out at $274,000.00 per unit.  Even if 20% of the cost is allocated to the retail space, these things are still running well over $200k per unit.  That is completely, bat$h!t insane.  At market rate, these things would need to rent for about $2000 to $2500  per unit for a developer to come close to eyeing this project.  And who wants to bet these are not $2500-a-month-quality units?  Prices for existing housing stock in the HH area run to about $100k per unit on the very top of the market.  Typically the per unit cost is well below this.   Remind me again why paying well over market rates for Karl Chew to line his pockets is a good idea?  The State would do far betting building $100k a piece single family, standalone houses in the almost completely vacant area east of Jefferson south of Wealthy (or doing infill in multiple other areas of the city).  Allen Edwin seems to have no problem hitting that price point when asked to do so.  Or, how about a trailer park--now that's cost-effective.  Or, perhaps the State could simply sue the City about its current effective ban on affordable multifamily housing through its oppressive use of zoning regulations.  While there are many alternatives, it ought to be clear that paying these rates for crappy apartments is akin to flushing money down the toilet.

 

State Street may have needs, but  Karl Chew is not one of them.  Nor, by and large, does the city or the state as a whole have any need for the wasteful LIHTC program. 

 

I don't know if this is specifically limited to HHA members, but sounds like an informational session about the project:'

 

https://www.facebook.com/photo.php?fbid=10151528134487794&set=a.413360802793.188251.134798582793&type=1&theater

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Ignoring the retail space, the cheapest of these things averages out at $274,000.00 per unit.  Even if 20% of the cost is allocated to the retail space, these things are still running well over $200k per unit.  That is completely, bat$h!t insane.  At market rate, these things would need to rent for about $2000 to $2500  per unit for a developer to come close to eyeing this project.  Any who wants to bet these are not $2500-a-month-quality units?  Prices for existing housing stock in the HH area run to about $100k per unit on the very top of the market.  Typically the per unit cost is well below this.   Remind me again why paying well over market rates for Karl Chew to line his pockets is a good idea?  The State would do far betting building $100k a piece single family, standalone houses in the almost complete vacant area east of Jefferson south of Wealthy (or doing infill in multiple other areas of the city).  (Or, perhaps the State could sue the City about its current effective ban on multifamily housing through its oppressive use of zoning regulations.  If there is becoming a shortage of low income housing, that's the larger part of the reason.)

 

State Street may have needs, but  Karl Chew is not one of them.

 

Help me understand this,  you're saying it basically costs 275k  to produce just one of these units?    Is the cost of renovation and construction really that high?   That doesn't seem possible.   It costs a third of that to build a brand new home that sells for 275k.   What all is involved in these projects that would make them so exspensive?

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Help me understand this,  you're saying it basically costs 275k  to produce just one of these units?    Is the cost of renovation and construction really that high?   That doesn't seem possible.   It costs a third of that to build a brand new home that sells for 275k.   What all is involved in these projects that would make them so exspensive?

 

 

Thanks for the heads up.  I must have missed it in my newsletter.  The last thing we really need in the area is more crappy low income housing.   Most of this crap turns into crime dens owned by absentee landlords--Stuyvesant, anyone?  This is NOT a positive development, and I hope it isn't presented as such.  There is already more than enough low income housing the area, and plenty of demand for market rate.

 

The disturbing truth about LIHTC is that it is nothing but a massive and unnecessary state subsidy which is incredibly wasteful, destabilizes neighborhoods, and degrades property values for the foreseeable future.  The numbers all come in about the same for Chews projects.  Here's some quickie math:

 

131 Units  //  $36 million   http://www.mlive.com/business/west-michigan/index.ssf/2012/09/developer_plans_to_break_groun.html

45 Units  //  $13 million    http://www.rapidgrowthmedia.com/devnews/Brkstne1007.aspx

48 Units //  $15 million  http://www.mlive.com/business/west-michigan/index.ssf/2013/02/new_apartment_project_and_rest.html

 

Ignoring the retail space, the cheapest of these things averages out at $274,000.00 per unit.  Even if 20% of the cost is allocated to the retail space, these things are still running well over $200k per unit.  That is completely, bat$h!t insane.  At market rate, these things would need to rent for about $2000 to $2500  per unit for a developer to come close to eyeing this project.  And who wants to bet these are not $2500-a-month-quality units?  Prices for existing housing stock in the HH area run to about $100k per unit on the very top of the market.  Typically the per unit cost is well below this.   Remind me again why paying well over market rates for Karl Chew to line his pockets is a good idea?  The State would do far betting building $100k a piece single family, standalone houses in the almost completely vacant area east of Jefferson south of Wealthy (or doing infill in multiple other areas of the city).  Allen Edwin seems to have no problem hitting that price point when asked to do so.  Or, how about a trailer park--now that's cost-effective.  Or, perhaps the State could simply sue the City about its current effective ban on affordable multifamily housing through its oppressive use of zoning regulations.  While there are many alternatives, it ought to be clear that paying these rates for crappy apartments is akin to flushing money down the toilet.

 

State Street may have needs, but  Karl Chew is not one of them.  Nor, by and large, does the city or the state as a whole have any need for the wasteful LIHTC program. 

 

I'm guessing too that the average square footage is around 1000 sf, making them about $300/sf. That's Riverhouse pricing, upper floors facing the river, high end upgrades (solid 10' high doors, granite counters, real hardwood/not laminate, high end carpet, high end light fixtures). I've been through some of these LIHTC projects and some have granite counters and cheap laminate floors, the rest of the finishes are basically builder grade.

 

$300 per square foot is what you pay for a pretty nice home in Ada.

 

So where's all that money going?

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The last thing State Street needs is something to "compliment" Stuyvessant Apartments. I worked in that building for two and a half years and no matter how hard the neighborhood tried, the apartments limited progress (not gentrification, progress...) in the neighborhood. 

 

I honestly can't understand why our city is allowing all of this to go on unchecked. I understand development deals are tough. But do we really want to be short-sighted and pay for the void they cause until the developers have fulfilled the obligations of LIHTC.

 

Slow, steady, planned growth seems much better than the "slap this sh*t up" mentality we seem to be witnessing in recent months. 

 

It seriously makes me want to pull my hair out.

 

Joe

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Bingo.  "Affordable housing" is anything but--it's a thinly-veiled transfer program to large corporations, investment groups, and government cronies, all in the name of "serving the poor."  In truth, it does anything but--particularly in an area like Grand Rapids where real estate is in plentiful supply.  Heck, Habitat for Humanity will actually sell a family a nice home at a decent price using volunteer labor, and allow the family to have some sense of pride and accomplishment.  Not these [email protected]$t4rd$.  Into the poor people housing farm you go.  So far as "income diversity" is concerned, the programs are designed to fail:  The annual tax credit is computed based on the percentage of the eligible basis dedicated to low income housing.  Since the costs are so outrageous (and likely often inflated through blatant cronyism), effectively all of the housing must be dedicated to low income because market rents adequate to cover construction costs cannot be obtained.

 

GRDad mentioned Riverhouse.  Riverhouse cost a reported $80million for 207 luxury units, or about $386,000.00 per unit.  Ignoring the retail space (which Riverhouse could have in spades if not for the location), the worst of Chew's comes out at $312,500.00 for "low income" units.  $34 million is what it will cost to build the new 270 suit Embassy on the Grand River (and if you have ever been in one of these things, you know how huge the rooms are and how much space is flat-out wasted)--less than Chew's cost for a 131 unit "low income" project. 

 

As to where the money goes, see McSha v United States for a good example: http://www.novoco.com/low_income_housing/resource_files/court_rulings/cr_mcsha.pdf  Those guys setup shell companies and dumped money into them to inflate construction costs.  Fortunately, they were caught.  Now, this presumably isn't the case in most of these projects, but it illustrates the point.  Even if there is not outright fraud, there is zero incentive to keep an eye on costs, and every incentive to run the meter.  Here's a good whitepaper explaining this in some more detail:  http://eriksen.myweb.uga.edu/Papers/LIHTC_Eriksen.pdf/LIHTC_Eriksen.pdf

Granted, Chew's outfit is just working the system, and I am sure is doing everything on the up-and-up, but that still doesn't make it right, and it certainly doesn't mean that we should politely nod along and condone this.  I agree that a 30 year twin to the Stuyvesant is the last thing we need.  I believe that project is now finally coming to the end of its life.  Now we're getting another one?
 

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  • 2 weeks later...

Well this is going to be a fight. 

 

Karl Chew's brilliant proposal?  Who needs the Park Professional Building when you can have the wonderful Park Tenement House!  I hope they included a litigation contingency in their planning, because I don't see this thing getting built short of a lawsuit.  This proposal is going to make an awful lot of people really, really mad once word starts to get out.

 

The plans being proposed are nothing like those seen on the first page of this thread.  What Karl apparently wants is a can't-lose-deal with effectively zero risk:  40+ low income units with ZERO market rent and ZERO commercial space.  Why?  He just can't seem to make enough money otherwise.  "The numbers don't work," he says.  My impression was that he was rather irritated about sitting for a few years on ground floor retail on Division which he had to include because "zoning required it."  I got the feeling that if he had his way, he would have bricked up those storefronts to pork them out with even more low income housing.  That is effectively what will occur here.  Progressive AE did the renderings, and they are not attractive to my eyes.  Budgetary constraints, I hope.  Kudos to ICCF are due here:  Their stuff almost always looks nice.   This thing has next to no permeability and looks like @$$. He even wants to slather a layer of apartments onto the parking ramp.  Make no mistake:  The exterior of thing will look every bit like the low income housing project it is.  It does not look all sexy-cool like the renderings on the first page of this thread from 2006. 

 

In order to get this thing done, they apparently need a zoning variance to have more units than otherwise permitted on the lot.  I didn't look into the parking scenario or the lack of commercial space or street level transparency, but it seems suspect.  I assume they must be skirting around this, though, or they would have asked for a variance.  Now, the hardship (according to their zoning application) is apparently that the Stuyvesant has more density than they do, so they should be able to build more units than otherwise permitted.  Now, here's what I don't get:  What is proposed is an intentional addition of two new floors onto an office building plus stacking units on the parking ramp in order to exceed the permissible number of units. How is this not entirely self-created?  What concern should the zoning commission have with how many low rent units they need to stuff in to provide big enough returns to their investors using LIHTC financing?  Of course, that's probably why they don't mention that tidbit in the zoning app.  Long story short, it sounds to me like he looks over at the Stuyvesant and his eyes get big and he turns green with envy.  The Stuyvesant is mentioned repeatedly through the zoning application. 

 

The worst part of the whole thing is that Karl made his presentation after a few folks did a great presentation on the new State Street Master Plan.  A lot of good work went into this.  That his request is consistent with this is also a requirement for the zoning variance.  He has the audacity to say that his low income housing project with no commercial street frontage and no market rate housing will somehow "assist in revitalizing" the area consistent with the plan.  If that's the case, we ought to be giving the Stuyvesant Limited Dividend Housing Association Limited Partnership gold medal awards instead of citations and police sirens.  At least the cops might have a change of scenery if the State St. project goes through.

 

If the ZBA lets this thing squeak through, I hope it is tied up in litigation for a very, very long time.  I think Brookstone is going to find out what happens when you try to slap up a massive low income housing project which exceeds zoning regs inside the bounds of the most expensive residential district in the city.  Did these jokers seriously think that they were going to be met with open arms?  I hope they weren't that naive.  I'd rather have a vacant building for the next 40 years than this thing for 30 years, which is the almost-guaranteed minimum life-span.

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The thing I don't understand is that the flyer that invited people to the meeting specifically talked about adding vibrancy to the area with street level retail, restaurants, etc. In the next breath, this development turns it's back to the street with no first floor commercial space.  That's really sad and I hope people fight to stick with the Master Plan. 

 

I really feel like we're having the wool pulled over our eyes with these developments. I hope people realize this does not help build a healthy neighborhood. Karl Chew is impressive at getting things done. I just don't like his product and think we'll look back in ten years and say "why did we let this happen?!". 

 

Is it just me?

 

Joe

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Chew's ability to get things done is the thing that scares me a bit.  I hope that the Zoning Board of Appeals doesn't offer up any leeway because of the cash he's been dumping in elsewhere (well, more appropriately, the federal government with his assistance).  A lot of it has actually does some good.  The Division stuff is one thing.  But a low income housing project in the Hill with zero positive aspects for the neighborhood?  Not so much.

 

I really feel like we're having the wool pulled over our eyes with these developments. I hope people realize this does not help build a healthy neighborhood. Karl Chew is impressive at getting things done. I just don't like his product and think we'll look back in ten years and say "why did we let this happen?!". 

 

Is it just me?

 

Joe

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The thing I don't understand is that the flyer that invited people to the meeting specifically talked about adding vibrancy to the area with street level retail, restaurants, etc. In the next breath, this development turns it's back to the street with no first floor commercial space.  That's really sad and I hope people fight to stick with the Master Plan. 

 

I really feel like we're having the wool pulled over our eyes with these developments. I hope people realize this does not help build a healthy neighborhood. Karl Chew is impressive at getting things done. I just don't like his product and think we'll look back in ten years and say "why did we let this happen?!". 

 

Is it just me?

 

Joe

I don't think that he pulled the wool over anyone's eyes at the meeting. there were two people out of about 30 that thought that this wasn't a terrible idea.  I don't know how he is getting these things through as he is a terrible presenter.  the only thing I can think of is that there isn't any opposition in heartside as there aren't any traditional 'neighbors'.  I think that he will find that opposition is quite strong to this project.  

 

The thing is, if he would include a mix of market rate, or some street level retail, then he might of actually had some support for the project. as it is there is no aspect of his plan that wasn't shot down in flames.

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Great to hear that about this project. What worries me is that LIHTC seem to be the "easiest" route for developers, but not the best fit for the long-term growth of our city. Yet, because it has the words "low income" attached to it, I worry that nobody will stand up and say 'enough is enough'.

 

Luckily, Heritage Hill has a lot of people looking out for the health of the neighborhood (and a lot of weapons in its arsenal to make sure things are done right/up to historic standards). Meanwhile, Division and (now) Ionia continue to have buildings utilize LIHTC, putting a 30 year choke hold on the area. 

 

Joe

 

 

I don't think that he pulled the wool over anyone's eyes at the meeting. there were two people out of about 30 that thought that this wasn't a terrible idea.  I don't know how he is getting these things through as he is a terrible presenter.  the only thing I can think of is that there isn't any opposition in heartside as there aren't any traditional 'neighbors'.  I think that he will find that opposition is quite strong to this project.  

 

The thing is, if he would include a mix of market rate, or some street level retail, then he might of actually had some support for the project. as it is there is no aspect of his plan that wasn't shot down in flames.

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I'm keeping my fingers crossed that the design changes.  I've heard some rumblings that they went back to the drawing board to add some retail and lower the unit count.  Still, I would have to wonder whether the goal would be more to avoid the zoning battle than to appease the neighborhood.   We'll see.  I sincerely hope it is the latter.  But, with some true transparency on the first floor, and a meaningful amount of retail, I suspect they would encounter much less objection.  It may not be perfect, but this is the planned retail area for a $250k to $450k subdivision.  My guess is that the last thing they want is a lot of professionals and other relatively influential people in this town breathing down their necks for building a tenement house in their backyards.  My guess is they must have thought they were developing another abandoned building in an area no one cared about.  They probably didn't even bother to look at the value of the surrounding real estate and its history.  I cannot imagine they would have so cavalierly announced plans to build a 40+ unit low income housing project in the middle of East Grand Rapids or their hometown of Midland.  For all practical purposes, though, that's what they did.

 

To be clear, though, I still have a lot of fear that the people who would occupy this would not be your typical Hill tenants but more like Stuyvesant tenants.  LIHTC property cannot, generally, have full time students as tenants, or even two people with jobs in a two unit.  The income limits as I understand them are on the low end of a logarithmic scale--they are not linear.  That is, while you might be able to make $24,000 and live in a single unit, you could only make, say, $15,000.00 apiece in a two unit.  All of those stories are bartenders and servers and retail workers probably aren't going to qualify for those two units.  Two full time minimum-wagers might have a tough time qualifying.  That quickly leads to the 30% to 40% unemployed, housing voucher, mentally ill, or you-name-it population that lives in some of these projects.  Not that they're bad people, but statistically speaking, they tend to have high crime rates and don't have the disposable income to support commercial development in the area. 

 

Great to hear that about this project. What worries me is that LIHTC seem to be the "easiest" route for developers, but not the best fit for the long-term growth of our city. Yet, because it has the words "low income" attached to it, I worry that nobody will stand up and say 'enough is enough'.

 

Luckily, Heritage Hill has a lot of people looking out for the health of the neighborhood (and a lot of weapons in its arsenal to make sure things are done right/up to historic standards). Meanwhile, Division and (now) Ionia continue to have buildings utilize LIHTC, putting a 30 year choke hold on the area. 

 

Joe

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What I heard is that they are decreasing the number of one bedroom units and increasing the number of two bedroom units.  Something to the effect that the number of occupants hasn't changed.  I didn't hear about retail being added though.

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So going back and reading posts from a couple weeks ago,  I saw the price tags for the new builds that are currently under construction.   Is there a construction estimate for this project?  I havent seen anything on it that I can tell.  I cant imagine the conversion of an old office building into Apartments would be that much.

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  • 3 weeks later...

new plans have been released for the redevelopment. I don't know how to post the renderings or plans but in a nutshell: 

 

there is a 2700 sq. ft. retail space on the ground floor. 

the number of units has been reduced to 34 with all but 6 of those being two bedrooms.

 

the project now needs only approval by the HPC.  There is a hearing Wed. Aug 7th at 5 pm; 1120 Monroe Ave NW public hearing room 2nd floor.

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  • 11 months later...

It looks like 345 State St. is finally getting a hard date for redevelopment!

 

313hq53.jpg

 

 

Admittedly I have no idea what the rendering is showing me.

 

5klxxu.jpg

 

That looks like a building built on top of the parking deck in the back.

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