ARegion'scoreprint

Region's Core Cities See Rebirth

May 3, 2004
MIBiz Network
By Tim Gwozdz

When The Shoreline Business Monthly first hit the streets in fall 1988, the downtown core of West Michigan’s major cities looked tremendously different than it does today.

The region’s major metropolitan center — Grand Rapids — was feeling the strain of years of residential and business flight to suburbia. Monroe Avenue North was a wasteland of abandoned or underutilized warehouses and factories. Just south of the downtown hub, more buildings remained either empty or in need of serious repair. Business and social activity was non-existent after 5:00pm as downtown workers fled the meager entertainment offerings and uncomfortable urban environment for the security of businesses closer to home.

In 1988 downtown Grand Rapids was relegated to the east side of U.S. 131 and was wedged between Fulton Street to the south and Michigan Street to the north. Monroe Avenue was a pedestrian mall.

But the landscape of downtown Grand Rapids has changed.

Since 1990 over $1.4 billion has been invested in downtown development projects. Among the top dollar projects — the Van Andel Institute, Eastbank Plaza Towers, Bridgewater Place, the Grand Rapids Community College Applied Technology Center, Van Andel Arena, the Grand Valley State University Richard M. DeVos Center and the Kent County Courthouse. New facilities built for Spectrum Health alone account for an investment of over $57 million.

These high-profile projects were augmented by a number of smaller new construction and rehabilitation projects. Those included the renovation of the Fifth Third Building, renovations and additions to Mary Free Bed Hospital, the renovation of The B.O.B. and the renovation of the St. Cecilia Music Society facilities.

The Grand Action Committee is one of the driving forces behind the rebirth of Grand Rapids’ core. Established in 1993 as an offshoot of the Grand Vision Committee, Grand Action put the plans for Van Andel Arena and DeVos Place into motion. John Canepa, one of the visionaries behind Grand Action, told The Shoreline Business Monthly in May 1993 that the arena and expanded convention center would have both local and regional implications.

“We recognize the vision is here and what can happen if we don’t make it a more viable downtown, a more viable region,” he said.

Rick Chapla is the redevelopment specialist at The Right Place Inc. and facilitates the organization’s Urban Redevelopment Council. He feels the real downtown renaissance began in 1996 with the arrival of Van Andel Arena. “It was a benchmark year, no doubt about it.”

Chapla singled out three key contributors that have kept that resurgence going. The first is the creation of “Health Hill,” the area around Michigan Street that includes Spectrum Hospital, the Van Andel Institute and GVSU’s health sciences building.

“Without looking at documentation, I would guess that the employment gain from those investments must be in excess of 1,000 employees,” Chapla said.

The second is the creation of Grand Valley State University’s downtown campus. The sprawling campus includes over 500 student housing units. Said Chapla, “It’s truly astounding.”

The third contributor is the development of Cherry Street Landing by Rockford Construction Group. Chapla said that there are a number of other worthy projects, but Cherry Street Landing sticks out.

“Rockford has picked up on a dozen different buildings in the Heartside area during the course of the last four years and is carrying into today. It has created educational institution space, office space and now residential, which has led to further residential in-fill opportunities and residential reuse of office buildings,” Chapla told MiBiz.

Fifteen years ago Muskegon’s downtown included a shoreline that featured the contaminated Teledyne Continental site, commercial docks and not much else. The heart of downtown was an enclosed shopping center — Muskegon Mall. In the Viewpoints section of the April 1989 issue of SBM a guest column praised the creation of the mall on its 13th anniversary and called for its privatization.

“Those community leaders of the late 1960s and early ‘70s who had the vision and fortitude to see the massive redevelopment project through richly deserve our gratitude for breathing life into a rapidly deteriorating downtown area,” stated the column.

“The mall must be placed in private hands now. The county, the city, the business community and the citizens of Muskegon together must make it happen. The plans put forward by Equity Properties of Chicago to purchase and vastly expand the mall are indicative of what Muskegon needs most — aggressive, solid first-class entrepreneurs who know their business, are willing to invest here and bring with them a refreshingly positive business attitude.”

Moving Muskegon Mall into private hands proved to be its ultimate demise. The promised new anchor stores did not materialize and foot traffic decreased, mall tenants abandoned the downtown location and the mall closed its doors.

Today the mall site lies in rubble, demolished in late 2003 as its new owner, Downtown Muskegon Development Corp. (DMDC), prepares to build a new urban core featuring commercial, residential and retail elements. Legal wrangling has kept the project in limbo for about a year, and funding for the project has hit some snags.

Over the past 15 years major investments have been made in Muskegon’s core downtown area. Of keen interest was the construction of Shoreline Drive, which opens up the lakefront to visitors by rerouting Business U.S. 31 along the waterfront.

The $11 million Shoreline Inn & Suites was built on the shore of Muskegon Lake just down from the new $5 million Grand Valley State University Annis Water Resources Institute. A $1 million renovation of the Hartshorn Centre has turned the once empty structure into a vibrant mixed-use property with loft offices and restaurants. The Muskegon Chronicle added to its downtown roots with a $10 million expansion of its press and production facilities.

A solid ray of hope for downtown Muskegon is the Muskegon Lakeshore SmartZone property — Edison Landing. The 32-acre former Teledyne Continental factory site on the shores of Muskegon Lake was purchased by Lakefront Development LLC several years ago and is now home to GVSU’s second Muskegon investment — the Michigan Alternative and Renewable Energy Center (MAREC). The site is also slated for a mixed-use development with a strong residential component.

The internal infrastructure is in place and a bevy of construction is expected to occur in spring 2004 as the law firm of Parmenter O'Toole begins work on its new law offices and Lansing-based Gillespie Development starts preliminary work on its proposed project to construct four buildings on lots bordering the entrance of Edison Landing. The two-story buildings will have the look and feel of the 1930s, with retail and office space on the ground floor and apartments on the top floor.

It also is expected that some form of upscale residential will find its place in the development. The possibility of lakeside condominiums with marina access has been proposed.

As for the future of downtown Muskegon, Chapla, a former director of planning and economic development for the city of Muskegon, has an interesting idea. “I would advocate creating more water. I’d actually reduce the amount of land mass and dig out some of the foundry fill to bring the shoreline in closer to Shoreline Drive.”

Residential
Grubb & Ellis|Paramount Investor Advisor Marv DeWinter has been an architect in the Grand Rapids area for 40 years and has worked on a number of key downtown projects including the Amway Plaza Hotel. That hotel renovation sparked a renewed interest in downtown development, said DeWinter.

One catalyst for the continuing revitalization of the region’s core cities has been the introduction of residential developments. This has certainly been the case in Grand Rapids, DeWinter told MiBiz.

“Nobody lived downtown 15 years ago. Now we have the Plaza Towers and residential north of I-196, an area that was all factories and filled with buildings that were dramatically underutilized,” DeWinter said. “People have moved downtown. That’s the biggest change.”

DeWinter points out that I-196 had been a barrier to development north, but that’s no longer the case. The burden of proof can be found on North Monroe Avenue. The $35 million resurrection of the Berkey & Gay Furniture Co. building complex on North Monroe was the pioneering effort that kept the downtown residential wheel rolling in Grand Rapids after the Eastbank Plaza Towers introduced residents to downtown living in 1992. Now known as The Boardwalk, the grounds of the old furniture plant have been turned into a mixed-use community with commercial space and close to 300 apartments. Other projects, such as Monroe Terrace, continue to bring residential back to downtown Grand Rapids.

The drive now is so great that some of the more recognizable structures near the heart of downtown are slated for residential components. Parkland Properties plans to turn seven floors of the Peoples Building into condominiums and Rockford Development group is incorporating residential into two of four buildings it purchased on Monroe Mall.

Chapla told MiBiz he regularly gets inquiries from individuals moving to the area who are looking for loft-style living. “I believe the demand for that type of housing is incredibly strong and will remain that way for the foreseeable future, resulting in several thousand housing units being developed around the near downtown.”

Grand Rapids’ student population is establishing a foothold downtown with the extensive student housing constructed to support GVSU’s Pew Campus. On top of that Rockford Development has taken the top two floors of the Commercial Building and turned them into student housing for Kendall School of Art & Design. Rockford also is transforming a building near Cooley Law School into student housing.

The next step for downtown Grand Rapids is to satisfy the needs of its newfound residential base.

“I think what downtown needs is more retail,” DeWinter said. “I hear people saying there should be a delicatessen, a grocery store. I think downtown needs a grocery store because of all the people moving there.”

Chapla agrees, stating that a full array of services is needed, from bookstores to delis. Developers have not missed the importance of residential in Muskegon. The Amazon Building, a former knitting factory on West Western Avenue, was converted from warehouse to residential by Indiana-based Gough & Gough Inc. and its Muskegon partner, Trinity Nonprofit Housing Corp. Since opening in 2002 the $16 million project has consistently kept its 126 residential units filled.

“The Amazon Building has done extraordinary things for downtown Muskegon,” Property Manager Brooke Copron told MiBiz in a 2003 interview. “I came from downtown Grand Rapids and I think bringing life to downtown Muskegon will bring some exciting changes.”

Along with the proposed residential units at Edison Landing and the former Muskegon Mall property, plans are underway to convert the former Shaw-Walker office furniture factory into a residential property. The first of those units should come on line later this year.

The downtown Holland area has remained vibrant over the past 15 years, however Lumir Corp. has introduced the residential into the mix. In early 2002 Lumir renovated a four-story building across from the J.B. Labs Building at Sixth Street and Central Avenue. The development has 12 condominium units that feature a port or patio and an attached garage.

The Renaissance age

The state of Michigan’s tax-free Renaissance Zone program has provided an impetus to core city development across West Michigan. Launched in 1996, the Grand Rapids Renaissance Zone program has resulted in the initiation of 119 projects and investments totally more than $247 million. Projects range from the multi-million rebirth of the Brassworks Building on North Monroe Avenue to a $35,000 investment in a hat store on Hall Street.

Grand Rapids Economic Development Director Susan Shannon told MiBiz that the Renaissance Zone program opened doors for local developers. “Grand Rapids developers and business people are always looking for good opportunities. They like rehabbing older building, which makes our community unique. Given the little push they needed, they rose to the occasion.”

This article appeared in the May 3, 2004 issue of MiBiz, read by upper management executives in West and Southwest Michigan. Print subscriptions are free to qualified individuals who do business in West and Southwest Michigan. For further information about MiBiz Network, visit www.mibiz.com .