Sunday, September 26, 2004

By Robert C. Burns

CHRONICLE STAFF WRITER

Plans for preparing the site of the former downtown Muskegon Mall for redevelopment are now established, and so is its overall cost -- $11,596,187.

A large part of the effort to rebuild the post-mall downtown involves re-establishing the street system that was tiled and roofed over in a federal Urban Renewal project in the early 1970s.

But there's a lot more than streets, below-ground water and sewer lines and new electric, gas, telephone and cable service in the overall plan.

How about those 50 new streetlights, and those new snow-melting sidewalks?

There also are such visual niceties as fountains and sculpture and other publicly displayed artworks, new landscaping and an outdoor ice skating rink.

Even the now-closed downtown parking ramp at Clay Avenue and First Street figures into the overall scheme of things. It is in line for $1.25 million worth of upgrades. Another $500,000 is budgeted toward improvements to the parking ramp at the Holiday Inn Muskegon Harbor.

Although the multilevel city parking ramp appears to be here to stay, the Morris Avenue bus station would be moved to another location.

Another transportation feature involves a paved bicycle/pedestrian trail connecting the site to the Lakeshore Trail, which runs along the city's Muskegon Lake waterfront.

Local officials expect the new streets and utilities have to be in place before they see serious purchase offers for the newly subdivided area known for decades as the central business district. But it's all included in a new marketing brochure now being distributed to prospective investors.

Muskegon city officials and the property owners will be working on designing the basic streets and utilities this winter, with construction expected to begin in the spring. All of the public improvements on the mall site are contingent on securing government funding.

How to pay for all this depends on a variety of sources.

As now planned, $3,351,827 would be federal money funneled through the Michigan Economic Development Corp.'s newly created "Grow Michigan" public works project, aimed at helping cities rejuvenate downtowns.

Wendy Ohst, manager of the county's department of employment and training and facilities management, said the county has filed a notice of intent to use $3.35 million in Community Development Block Grant funds to help develop the site with new roads and utilities.

That is the biggest chunk of money in what is considered the next important step toward eventual rebirth of the downtown. MEDC and local officials already have had some discussions to that end, she said.

Now, if the mall property and surrounding area meet the requirement as a low- to moderate-income area and become eligible for funding, the county's board of commissioners would then be asked to make a formal application for funds.
"It would help solidify that project and really move it forward," she said.

Another $3 million is expected to come through the U.S. Department of Transportation, with the Michigan Department of Transportation adding $1 million more.

The city of Muskegon is expected to furnish $1 million under the plan. It contributed $450,000 to buy parking areas after mall owner Rick Perlman in fall 2002 was foreclosed on by the Downtown Muskegon Development Corporation, the current owners of the former mall site. The city also will contribute $150,000 toward design and engineering work, which will come from an Enterprise Community grant.

Cathy Brubaker-Clarke, the city's director of community and economic development, said that is an ideal use of those funds, one reason being that they must be spent by the end of this year. The remaining $400,000 of Muskegon's $1 million contribution would come from future grants.

In addition to those sources, there is the U.S. Commerce Department's Economic Development Administration. The downtown project qualifies for future funding by virtue of its being included in a Comprehensive Economic Development Strategy.
Erin Kuhn is a senior planner with the West Michigan Shoreline Regional Development Commission, which compiles the economic development strategy document. She said some initial contacts have been made with EDA representatives about this project, but no formal application for funding has yet been submitted.

When and if it is, the amount to be requested will be determined by officials of Downtown Muskegon Development.
"It is definitely a possibility for funding," she said.

The downtown development group estimates that ultimately, the 17 acres of developable land will generate construction spending totaling $60 million.

Long before the investments are made and buildings built, new streets and the utility lines that run beneath them must be re-established.

Western Avenue -- once the primary artery through the central business district -- will be rebuilt between Third and Terrace streets. Also to be replaced are the intersecting streets of First, Second and Jefferson between Clay and Morris avenues; and Market Street from Jefferson to Terrace.

Water main improvements will be made on each of those streets except Market, while sanitary sewer upgrades will go in under all streets except Second.

The overall public works portion of the project, covering streets, sewer and water lines, will come to nearly $1.8 million.

To further prime the pump, the city designated the mall property as a Renaissance Zone, exempting property owners from virtually all state and local property taxes. People who choose to reside in the zone -- and there is a lot of residential development in the proposal -- don't have to pay property taxes, and are exempt from state and local income taxes, whether they own or rent.

And a tax increment financing district will be formed to "capture" tax revenue to help recover some costs in the future.