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Studio Park - $140 Million Celebration Cinema/mixed use project


joeDowntown

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1 hour ago, joeDowntown said:

It feels like a big punch in the gut. If we can't fill a (relatively) small Class A office building, it says a whole lot about what downtown *won't* look like anytime soon. And Franklin Partners seems like the type of company that could get it done. 

After a few failed attempts (this building, the Keeler Building, Site 36, putting the Display Pak building on the market), you wonder if Franklin Partners and other outside companies will give up on this market and go back to where they can get deals done?

Joe

Isn't it really frustrating? You have Detroit (a city people still make fun of) about to build the new tallest building in Michigan, and the height of our projects get cut in half, and that is if they get built at all. Now one of the bright spots is going to have a major missing piece in it for the near future too?

X99 is absolutely right that the solution isnt more bike lanes, buses, electric scooters or rental bikes. We are going to have to get serious.

I just wish I knew what the solution was. Is it taxes and regulation? I know that out of all of my siblings, parents, nephews/nieces, and their kids, I'm the only one that still lives in GR because they simply cannot afford the taxes and fees. I cant think that a major company would want to spend lots of money to be in the middle of a DT of a city with low name-recognition, but with a lot of self-esteem, with a high price tag and few amenities.

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46 minutes ago, GR_Urbanist said:

Isn't it really frustrating? You have Detroit (a city people still make fun of) about to build the new tallest building in Michigan, and the height of our projects get cut in half, and that is if they get built at all. Now one of the bright spots is going to have a major missing piece in it for the near future too?

X99 is absolutely right that the solution isnt more bike lanes, buses, electric scooters or rental bikes. We are going to have to get serious.

I just wish I knew what the solution was. Is it taxes and regulation? I know that out of all of my siblings, parents, nephews/nieces, and their kids, I'm the only one that still lives in GR because they simply cannot afford the taxes and fees. I cant think that a major company would want to spend lots of money to be in the middle of a DT of a city with low name-recognition, but with a lot of self-esteem, with a high price tag and few amenities.

I'm not sure it's taxes since Detroit charges 2.4% income tax and GR charges 1.5%.   I know Detroit has the name recognition but I'm not sure that's a good thing regarding the perception of Detroit.

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13 minutes ago, GRJohn said:

I'm not sure it's taxes since Detroit charges 2.4% income tax and GR charges 1.5%.   I know Detroit has the name recognition but I'm not sure that's a good thing regarding the perception of Detroit.

You'll get paid a lot more in Detroit than you will here, which makes up for the higher income taxes. But property taxes of 60+ mills in Detroit will bury you. 

 

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4 hours ago, MJLO said:

I wonder if FP talked to any out-state companies as well.   There are some pretty massive and progressive Fortune 500 companies scattered throughout the state, located in cities that are downright toxic to attracting the modern talent base.  No offense to Jackson, Battle Creek, Midland, or Benton Harbor. but the companies headquartered in these cities have been desperately finding creative ways to attracted an educated talent pool for a least 20 years.  If a shiny new office building is going get filled downtown it would be from companies like that.  Not one of the big, cash shy private W. Michigan companies that are doubling down their investments in their suburban fortresses.  To me their assumptions about these companies show a bit of an amateur naivety I wouldn't have expected.  Anyone on here could have told them this and saved them $.  It's not a secret.

They know what they're doing but not being based here, it's hard to make inroads into the major corporations in Michigan.

Let's not forget that Consumers Energy is about to put in a big presence downtown, but over on the West Side. DTE has a presence downtown now, on the West Side. Chemical Bank is moving a bunch of their offices into the Warner Tower I believe. Kellogg opened a bigger presence here out by the airport (a project owned by Franklin Partners). The Amway families are dumping all of their investments into GVSU expansions (which is certainly not a bad thing at all). Oh and they're about to dump a bunch of money into the Amway Grand. 

I would also add, and not to you MJLO, but Detroit isn't building a lot of those projects, people are. Bold people with deep pockets, a lot of employees, and a lot of STATE tax incentives. The State of Michigan wants downtown Detroit to succeed big time. I also think East Siders were sick and tired of always being in the duldrums economically and having lil ol Grand Rapids be the favorite son of Michigan nationally, the one bright spot in an otherwise stagnating State. It has them fired up. I've been following discussions about Detroit and GR for more than 15 years. Nothing changes. :) It's a "big brother/little brother complex." 

Has downtown GR lost its way? A lot of people scoffed at me when I raised the red flag about worker/permit parking more than a year ago... Studio Park is going to have built-in parking but does anyone know how much was allocated to the office building? Any?

 

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Wzzm is a joke.

This project is still going to be a terrific addition to Grand Rapids.

To anyone panicking about where this leaves us, I’ll just say...

We’ve solved the major problem, which was people not wanting to LIVE downtown. That’s what changes the environment.

It’s going to take a minute (probably a full economic cycle) for office to be doable.

But we’re getting there. 

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19 minutes ago, localtalent said:

Wzzm is a joke.

This project is still going to be a terrific addition to Grand Rapids.

To anyone panicking about where this leaves us, I’ll just say...

We’ve solved the major problem, which was people not wanting to LIVE downtown. That’s what changes the environment.

It’s going to take a minute (probably a full economic cycle) for office to be doable.

But we’re getting there. 

Agreed. Studio Park is going to be a game-changer! :)  j/k with the terminology. 

It will be transformative though to how downtown entertainment crowds flow. I have noticed that 20 Monroe Live has helped put crowds on the sidewalks at night, even weeknights.  

I'm not always positive but I'm endlessly optimistic. 

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Agreed. I’m frustrated that Franklin couldn’t make it work because it looked like a really high-end, signature building (albeit not tall). But I don’t think that piece of property is going to sit weed-ridden very long. Seems like a good spot for another mixed use project. I’m sure something will take its place soon. 

Joe

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22 hours ago, Lmichigan said:
Quote

“It led to very few second conversations. I’m a little surprised.”

 

I can not countenance the parking reason,

Yes, the parking thing is boilerplate crap.

But Grand Rapids has yet to capture an out of state employer of any note, and that's something significant.  Various business leaders and developers have commented on that in the past.  Probably many reasons for that, first being unimpressive infrastructure: our transit system is OK,  our airport is OK,  we have ONE train a day to Chicago (tier#1 city).  Our education demographic is not impressive. Our housing market is tight, and neighborhoods are well organized in opposition to change.  Our City Government is weak.
I mean . . . why would a top tier company locate here?  Grand Rapids is a beautiful city and a great place to live [if you're already here and established] but doesn't have any trump cards in its hand.
Add to that the rumors of recession and near certainty of rising interest rates; that makes everyone timid. 
GR got a lot out of this latest boom - I will certainly patronize Studio-C. But I believe, in time, we'll look back on this period as a missed opportunity. Although given how our civic systems are engineered/rigged to be conservative what was accomplished may really be all that was possible. :(

13 hours ago, GRDadof3 said:

I have noticed that 20 Monroe Live has helped put crowds on the sidewalks at night, even weeknights.  

This.  The level of weekday activity on downtown sidewalks has ticked up impressively.

I know DGRi has pedestrian counters;  I'd love to have a look at that data and make some pretty charts.

Edited by whitemice
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11 hours ago, joeDowntown said:

Agreed. I’m frustrated that Franklin couldn’t make it work because it looked like a really high-end, signature building (albeit not tall). But I don’t think that piece of property is going to sit weed-ridden very long. Seems like a good spot for another mixed use project. I’m sure something will take its place soon. 

Joe

I agree Joe. It will be a ready-made development site, someone will take up a project there. Maybe it will be taller. Maybe 12 stories. I have to think too that looking at the back of the arena may have been an internal objection? Although Miller Johnson has a similar view. 

This article says the new ramp will have 900 parking spaces, with 300 being leased to the city to replace Area 4 and 5 lots. 

https://www.woodtv.com/news/grand-rapids/2nd-parking-lot-to-close-for-studio-park-project/1098175711

So I have to imagine the office building space gets at least some of the 600 remaining spaces (?). There are two apartment buildings and a possible 3rd down the road. I wonder what the development agreement states. I know at least one person from Franklin Partners lurks here...

 

 

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18 hours ago, x99 said:

Virtually no family of four with a six figure income is going to live without a car.  Just get over that ridiculous fantasy.  Enough, already.  You clearly were never in a downtown parking ramp at 7PM 10 years ago and then in one today.  Even the people who bought stuff right downtown mostly have car(s).  You might save a few bucks on commute gas, best case.  That's how I lie to myself and tell myself I make up the tax difference.  :)

For a company already in the suburbs, moving your HQ (and executive suite) downtown makes no sense.  I'm just glad Wheeler finally made the point (albeit indirectly) that the way the city chooses to manage and fund itself means it really only markets to people without a lot of disposable income.  You can't support lots of Class A office space and expensive residential with that formula in a market like this.  Are taxes the only factor that are a problem?  No, but they're another nail in the office space coffin, on top of the nailed on, spiked, dead, and buried lid on the retail coffin.   I'm glad someone is finally publicly pointing to more problems other than parking.  This Studio Park project is only the latest in a string of stillborn office and residential projects.  It's high time to starting identifying some causes.   Hint:  None of the causes are "lack of public transit" which none of the projects have relied on.

Edit:  I thought I had run across a study at one point explaining the city income tax problem.  Here it is:  https://www.nber.org/papers/w2197.pdf.   If you don't care to read through pages of complex regression analysis and math, the important takeaway for our purposes here is this:  "Assuming constant total tax revenue... the net effect of shifting away from property taxes toward income taxes is to reduce the size of the property tax base."  The corollary would be that the net effect on development of a higher income tax versus elsewhere is indeed to shift development elsewhere, or stop it from happening at all.

I never suggested living without a car. I suggested living with one less car than you normally would to save upwards of $10k per year per vehicle. Having grown up in a family of four with four cars (while my sister and I were in high school) I found the amount that we paid out of convenience (due to our location) to be ridiculous, regardless of my family's six-figure income. 

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13 minutes ago, demhem said:

They can't afford the taxes and fees? I live in GR because it is cheaper than living in the suburbs. My property taxes are a quarter of what my parent's pay on their half-acre suburban lot and my commute to work is an 8 minute drive/10 minute bike ride/15 minute transit ride (compared to my dad's 40-minute work commute). I mow my 4,000 square foot lot in 10 minutes with a push mower vs. my parent's 1.5 hour riding mower/push mower combo. Are we living in the same universe? Financial choices can be made which favor an urban or suburban argument. It depends on what your priorities are. 

No they cant afford them.

That is why they live in apartments in the southern suburbs, and out in Ottawa county. They all work out there too. They certainly dont count their living space in terms of acreage :). Plus they have other expenses like children. My parents are also seniors on a fixed income.

 

It's a far different setup than living in the city, where you work a few minutes away, with perhaps a spouse and/or no kids. I very grateful that the stars aligned for us that we can afford to live in the city, in East Hills, live close to work, and really be financially comfortable. I wouldn't trade it for their situation!

Edited by GR_Urbanist
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Walker has a 1% income tax and they have Meijer and Bissell, among others.  That has not stopped them.

(Side Note) Personally, I am going to say the city income tax is more annoying than anything else.  I've worked in Walker, lived in Grand Rapids, while my wife worked in Ionia (which also has a city income tax).  Thats 3 additional required tax returns.. thats simply just annoying.

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So is this the 'Building A' that's being put on hold?  Isn't that area already under construction or is that just for the parking ramp?

That glass building in the renderings looked really great.  I'm good with waiting as long as it doesn't up some stubby little building.  With the size of the spot it would make sense to go higher

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2 hours ago, Lmichigan said:

GRDad had a diagram on the previous page of this and explicitly stated that the Building A site is not under construction.  I'd say it looks like it's currently being used for staging for the parking garage or other buildings under construction.

Yes I think it actually has a couple of construction trailers on it, Pioneer ones I believe. 

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On 10/30/2018 at 8:25 AM, tSlater said:

While we may have a hole there, that worked out in a good way overall when it happened with Bridgewater's (Riverhouse) hole. 

This.  Patience is a virtue;  there does not need to be a rush to fill it.  It might be better to wait until the next positive cycle than to fill it with something diminutive.

On 10/29/2018 at 11:24 AM, demhem said:

Gas, vehicle maintenance, and time could easily account for a good chunk of that if you are in the $100,000 range. Per the US Dept of Labor, the average vehicle costs nearly $10,000 per year to own and operate. Eliminate a car from a family of four and reduce gas, wear/tear, and time from commuting with other vehicles and the tax benefits are likely marginal. 

There is no way employees pay anywhere near the ~$8K an automobile costs; even if you include in-city property tax. 
Municipal taxes are an enormous net win.

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35 minutes ago, whitemice said:

This.  Patience is a virtue;  there does not need to be a rush to fill it.  It might be better to wait until the next positive cycle than to fill it with something diminutive.

There is no way employees pay anywhere near the ~$8K an automobile costs; even if you include in-city property tax. 
Municipal taxes are an enormous net win.

The bolded is likely correct. Others may disagree, but I have a strong sense that things are starting to slow down after the area's furious growth the last few years - both in real estate throughout the area and commercial growth in the city. As someone said previously, it may take having all of these new units filled for a while before a culture is established that starts to attract a new wave of commercial growth downtown.

Edited by GRLaker
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11 minutes ago, GRLaker said:

The bolded is likely correct. Others may disagree, but I have a strong sense that things are starting to slow down after the area's furious growth the last few years - both in real estate throughout the area and commercial growth in the city. As someone said previously, it may take having all of these new units filled for a while before a culture is established that starts to attract a new wave of commercial growth downtown.

Downtown has also not really been a hotbed of drawing new office users. Most of the new ones that have set up shop downtown are small boutique design services and similar small offices. Most of the big office users you see downtown now are the same ones that were downtown 30 years ago, just in new spaces. The big institutional users like Spectrum, MSU, VAI, and GVSU are the only newcomers. The Class A office space vacancy rates seem to be at about the same level from reports I looked at 15 years ago lol.  Franklin Partners did an excellent job filling 99 Monroe and 25 Ottawa, both of which with new users. There was probably not a very deep pool of potentials to keep that momentum going though. 

If you were responsible for drawing suburban office users to downtown office space, what would be your selling points? Keep in mind that generally speaking it will be quite a bit more expensive, both for rent and for other costs (parking, income tax for employees). 

Go!  

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16 minutes ago, GRDadof3 said:

If you were responsible for drawing suburban office users to downtown office space, what would be your selling points? Keep in mind that generally speaking it will be quite a bit more expensive, both for rent and for other costs (parking, income tax for employees).  

When Spectrum moved into 25 Ottawa, leadership talked a lot about using downtown to attract new talent, especially tech workers. If someone is considering moving to Grand Rapids, a downtown office might appeal more to them than a suburban one. There are a lot of generalizations and stereotypes that go into this, making assumptions that tech workers on average are younger, less likely to have kids, and more interested in a "trendy" lifestyle. But there's also a calculation that you're competing with other markets, such as Ann Arbor, Chicago, and even NYC and Silicon Valley. Unfortunately, most employers here haven't caught up to those cities in terms of compensation (not even to A2 or Chicago), but they at least try to provide a slice of the urban lifestyle of those other locales.

I don't think you're going to convince any business to pack up their suburban office and plop it downtown. However, if a business is reorganizing or making a major expansion (both of which were true in the case of Spectrum and 25 Ottawa), you might entice them downtown by convincing them that it will help with recruitment. But that only works for industries, such as tech, that struggle to recruit locally—and GR, despite its economic progress, simply doesn't have many big businesses—urban or suburban—that fit that mold.

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I think we often talk about critical mass for retail or for residential but I think it can also apply to office space.  It's much more expensive to put your office in downtown Chicago than it would be to put it in Waukegon but in order to be in the thick of things, you'd pay the higher prices.  I don't think GR is to the point where a major company would see a benefit of moving downtown just yet.  I think if we continue to see more residential and retail/entertainment, the office space will eventually get there but it will be a long time coming.

I never thought that the office building of this development was the crown jewel.  It was nice to see office use move south of Fulton but the movie theater is what I saw as the most important part of this development.

 

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