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City looking for development proposals for Fulton & Ionia surface lot - 22 Ottawa


GRDadof3

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Starting a new topic for this, pulled from the retail thread. The possibility of bridging over the ramp entrance, filling the entire footprint, and going up 75,000 square feet sounds pretty exciting.

http://www.bing.com/maps/?v=2&cp=r4tj2b7vtpq3&lvl=19.77599303825835&dir=5.876530585227781&sty=b&where1=W%20Fulton%20St%20%26%20Ionia%20Ave%20NW%2C%20Grand%20Rapids%2C%20MI%2049503&form=LMLTCC

http://www.mlive.com/news/grand-rapids/index.ssf/2011/08/small_downtown_grand_rapids_pa.html#_login

Hmmmm..

2438063966_56a8c49943_z.jpg?zz=1

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I wonder if this is connected to Zondervan's move

I thought Zondervan was moving because they didn't have any money and were downsizing? Why would they move into a high-end, most likely class A, facility downtown?

I'd say whatever proposal comes forward, it will not include much office space. Not with Bridgewater under bank foreclosure and losing tenants. Most likely apartments, would be my guess, with ground floor retail.

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I thought Zondervan was moving because they didn't have any money and were downsizing? Why would they move into a high-end, most likely class A, facility downtown?

I'd say whatever proposal comes forward, it will not include much office space. Not with Bridgewater under bank foreclosure and losing tenants. Most likely apartments, would be my guess, with ground floor retail.

My guess is apartments also considering how low vacancies are. Demographics certainly work in their favor with the rapid increase in 1 and 2-people households according to the latest census statistics ...

http://www.mlive.com/news/index.ssf/2011/08/for_a_majority_of_michigan_hou.html

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My guess is apartments also considering how low vacancies are. Demographics certainly work in their favor with the rapid increase in 1 and 2-people households according to the latest census statistics ...

http://www.mlive.com...chigan_hou.html

I was working on an article about the census and found that only about 1/4 of Kent County households have school aged children living at home now. One of the lowest recorded in decades. Pretty much the same trend nationwide.

It makes sense. Most people are generally waiting until their 30's and even 40's to have kids. And kids of baby boomers have long left the house, for the most part.

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By the wording, it'll be interesting to see if they try to get a national player to come in to town. Someone with "expertise". I'm sure a mixed used development (w/ apartments) would do really well there. But with the lending climate the way it is, it seems like it'll take someone with deep pockets to get it done. Will be interesting to see if it can be pulled off by local developers, and if national developers have any interest in GR.

Joe

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I thought Zondervan was moving because they didn't have any money and were downsizing? Why would they move into a high-end, most likely class A, facility downtown?

It was my understanding Zonedrvan was closing its distribution center, consolidating with a Harper Collins DC. I don't think any office staff was being let go. Still would be good to see them downtown, somewhere.

Glad the city is on the ball with this parking lot, would be nice to see some infill there.

Edited by mpchicago
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By the wording, it'll be interesting to see if they try to get a national player to come in to town. Someone with "expertise". I'm sure a mixed used development (w/ apartments) would do really well there. But with the lending climate the way it is, it seems like it'll take someone with deep pockets to get it done. Will be interesting to see if it can be pulled off by local developers, and if national developers have any interest in GR.

Joe

Are there any "national" developers left. :P

There might be some Chicago developers who are struggling with saturation in that metro area, perhaps. Maybe I'll reach out to some Chicago architects I know...

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Not sure if this is completely relevant to the topic, but I talked with a guy this morning at Rockford Construction who said that they will have a pretty large project announced for DT GR in the next couple of months. Anyone care to elaborate on this?!

Edited by Yankee Fan
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Not sure if this is completely relevant to the topic, but I talked with a guy this morning at Rockford Construction who said that they will have a pretty large project announced for DT GR in the next couple of months. Anyone care to elaborate on this?!

I would imagine it's the renovation of the old Merton Hotel into another GRid70 type project. It was reported on last week or the week prior.

There's also a Rockford Construction trailer parked at the corner of Wealthy and Division....

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For the City to choose issuing the RFP now (in a depressed real estate climate), the City has almost certainly been approached with a credible development proposal. It will become evident by the fact that one proposal will be significantly more advanced than the remaining.

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A realtor mentioned in passing that something "really cool" was brewing. At the time, I thought he was talking about a particular space in a particular, but looking back on it, I think he may have been talking about this project. I know who I'm betting on in the early rounds. :)

I just hope we don't see renderings with a suburban style Walgreen's as a main focal point (Rockford Construction lost out to Sam Cummings on that proposal, which ended up becoming Gallery on Fulton).

Joe

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  • 1 month later...

From the minutes of that meeting:

RESOLVED:

1. That the 17-space metered surface parking lot including certain air

rights adjacent to the Ottawa-Fulton parking ramp (the “Property”), having been

recommended for disposal by the Parking Commission, shall be sold in

accordance with City Commission Policy No. 900-41 through a combination of

the listing and sale option and the negotiated sale method; and

2. That the Property shall be listed for sale with the Grand Rapids

Association of Realtors Multiple Listing Service with the actual purchase price

to be determined by an independent appraisal of an appraiser mutually

acceptable to the City and purchaser determined within 45 days of closing; and

3. That, upon request and payment of option fees, the prospective

purchaser may have an option to purchase the Property for a maximum of

three years; and

4. That a proposal to purchase the Property shall include (a) the

proposer’s experience in developing or redeveloping property in downtown

Grand Rapids; (b) a proposed mixed-use office/retail development with a

substantial opportunity to attract tenants that are new to the City; © a

development with a minimum investment of $15,000,000 (exclusive of the

Property purchase price) and containing a minimum of 75,000 square feet to be

completed within three years of purchase; and (d) an agreement by the

purchaser to enter into a development agreement memorializing development

criteria including development milestones; and

5. That Economic Development staff shall review proposals received

and may as a result of such review negotiate with one or more prospective

purchasers and upon completion of negotiations will bring such proposal(s)

forward to the City Commission together with a recommendation for the City

Commission’s consideration for approval, approval with condition or rejection;

and

6. That all resolutions or parts of resolutions in conflict herewith shall

be and the same are hereby rescinded.

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If they want at least 75,000 sq. ft, how many stories would that be (to fit on the current footprint) approximately?

Surprised 4b didn't mention residential. Why couldn't it be residential/retail or all three. It seems like new residential (apartments) would be a higher demand use for the spot than office at this point.

Thanks for the find GRDad.

Joe

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I would estimate about 20,000 sq ft per floor, since the space is triangular, and looks slightly larger than 200 ft on each side (though I could be wrong). So, sadly, that looks like only about 4 floors.

I just calculated about 23,000 sqft, but the first floor would only have 13,000 with the ramp entrance.

Although the interior spaces would be more desirable if the building 1) did not take up the entire lot, or 2) provided for atria or light courts, because otherwise any room in the north corner of the site is going to be 140-180 feet from exterior walls and windows.

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I've got to ask: Who is going to propose a mixed office/commercial development in this space? Assuming you could build out to the 75,000 square feet, and get $15 a foot for it, with no vacancies or other expenses, you would net $1.125 million per year in some sort of obscenely perfect, non-existent world (where, to top it off, the City gives the property away for free). At an 8% cap rate, you would be justified in spending only 14,062,500.00. Granted, this is really back-of-the-napkin, but I can't imagine any bank would lend on that. It's too tight, and the market (I suspect) will not sustain another $15/ft officeplex at full occupancy. Plus, it doesn't hit the City's minimum investment price. So either this thing has to go substantially bigger, or it just ain't gonna go without some other sort of incentive. I suppose bigger is a good thing, but for those suggesting there is already a proposal on the table that the RFP was tailored to accommodate, I'd like to see a little more proof in your pudding.

Edited by x99
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I've got to ask: Who is going to propose a mixed office/commercial development in this space? Assuming you could build out to the 75,000 square feet, and get $15 a foot for it, with no vacancies or other expenses, you would net $1.125 million per year in some sort of obscenely perfect, non-existent world (where, to top it off, the City gives the property away for free). At an 8% cap rate, you would be justified in spending only 14,062,500.00. Granted, this is really back-of-the-napkin, but I can't imagine any bank would lend on that. It's too tight, and the market (I suspect) will not sustain another $15/ft officeplex at full occupancy. Plus, it doesn't hit the City's minimum investment price. So either this thing has to go substantially bigger, or it just ain't gonna go without some other sort of incentive. I suppose bigger is a good thing, but for those suggesting there is already a proposal on the table that the RFP was tailored to accommodate, I'd like to see a little more proof in your pudding.

I agree. I don't think it's being tailored for anything specific. I think it's just exactly as the city explained, an opportunity to put some city land up for its next best use, and see if they get any bites. I think the language actually is to prevent flippers or some company to buy it and use it for surface parking.

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I can't really see this being only 75k square feet. I would imagine something in the 8-10 floor range at the least which would give you around 150k square feet. it should be relatively easy to hit a development cost of 15 million with that size.

Edited by jas49503
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  • 2 months later...

For the City to choose issuing the RFP now (in a depressed real estate climate), the City has almost certainly been approached with a credible development proposal. It will become evident by the fact that one proposal will be significantly more advanced than the remaining.

Not that it matters but I wonder which really came first, the RFP or the credible development proposal:

http://www.mlive.com/news/grand-rapids/index.ssf/2011/12/when_is_a_small_parking_lot_wo.html

Cummings knows a lot more than me but I think he may be getting way ahead of the market.

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I suppose bigger is a good thing, but for those suggesting there is already a proposal on the table that the RFP was tailored to accommodate, I'd like to see a little more proof in your pudding.

As I mentioned, it will become evident (in time) that the City was approached with a credible development proposal. While having no involvement on this project, I have had sufficient experience working on PPPs to read what the City was doing. This is a common practice (which I support if done in an open and equitable process) that will lead to a great new project downtown. The negative alternative would be a closed sale to the developer, an abbreviated RFP response deadline to rig the process, or no sale at all. The City handled this in the appropriate manner.

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  • GRDadof3 changed the title to City looking for development proposals for Fulton & Ionia surface lot - 22 Ottawa

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