May 18, 2005

Muskegon Chronicle

By Dave Alexander

Muskegon leaders expect to get good news Thursday from the Michigan Economic Development Corp. board about money for road construction on its "city center" property.

Local officials and community leaders with the nonprofit corporation that owns the former Muskegon Mall site believe the Michigan Strategic Fund Board will approve a $1 million federal Community Development Block Grant and another $700,000 loan from the state's Urban Land Assembly program.

The $1.7 million should allow the city of Muskegon to move forward with road bids and construction contracts this summer on the first phase of development on the 23-acre former Muskegon Mall site.

However, the $2.7 million first-phase infrastructure budget continues to have an estimated $435,000 funding shortfall that local officials say they are attempting to fill.

Property owner Downtown Muskegon Development Corp. has city-approved plans showing the historic street grid being rebuilt on the former downtown mall site, which was cleared after the mall closed in 2002. The non-profit owner is a consortium of the Community Foundation for Muskegon County, the Paul C. Johnson Foundation and the Muskegon Area Chamber of Commerce.

The first phase of that road, sidewalk and utility redevelopment would be along West Western Avenue from Third to Terrace streets and First Street from Morris to Clay avenues. The first phase of construction would include a new traffic circle at Third and Western, local officials said.

Downtown Muskegon Development will be before the Muskegon Planning Commission in June to receive approval on an adjusted road plan calling for Western Avenue to be a boulevard design, according to Jim Edmonson, president of Musk-egon Area First -- the economic development agency assisting in downtown redevelopment.

"We have answered all of the state's questions and unless something happens with the MEDC staff, we should be fine," Edmonson said. "The money is there."

With road construction potentially underway before the end of the year, sales of land within the residential-, commercial- and office-based "city center" development are progressing, Downtown Muskegon Development officials say.

Muskegon Construction Co. President Gary Post put an investment company together to buy three of the five remaining buildings along Western Avenue.

"For some larger developers that we have talked to, they have been waiting for construction on the streets," Edmonson said. "With street construction, we are not selling a dream any more but a real development."

Officials said there are serious discussions under way with out-of-town developers concerning purchase of the two remaining structures -- the former National City and Comerica bank buildings.

The former National City building has an interested outside developer with a specific redevelopment plan who has settled on price with Downtown Muskegon Development, according to Chris McGuigan, president of the Community Foundation for Muskegon County. Formal papers are being prepared to close the deal and allow for a public announcement, she said.

As for the Comerica tower, McGuigan said another out-of-town developer is negotiating for the purchase of the building for a mixed-use commercial-residential redevelopment.

But road funding is a critical issue for those two developers and the Post-led investment company, which bought the former Daniel's office supply, Century Club and Muskegon Savings Bank buildings.

Muskegon County's state legislative delegation played a key role in putting the downtown street funding before the Michigan Strategic Fund Board, according to Muskegon Area Chamber of Commerce President Cindy Larsen. State Sen. Jerry Van Woerkom, R-Norton Shores and state Reps. Doug Bennett, D-Muskegon Township and David Farhat, R-Fruitport Township, worked closely with MEDC staff, she said.

"We are proud that they were working as a team on behalf of downtown development despite their differing political affiliations and geographic district boundaries," Larsen said.

The Michigan Economic Development Corp. does not discuss projects before the Michigan Strategic Fund Board until that body has taken action, according to MEDC spokesman Paul Kreps. Muskegon City Manager Bryon Mazade said he had no comment on the funding issues until final state approval.

However, city, Muskegon County and other community officials have been in intensive discussions with MEDC officials over the Muskegon downtown street funding.

Through Muskegon County, the city and property owners have applied for a $3.3 million Community Development Block Grant from the MEDC for street and utility redevelopment of the site. The streets are part of a $11.5 million list of public infrastructure projects for the "city center" redevelopment including pedestrian bridge over Shoreline Drive to provide access to the Muskegon Lake waterfront and a snow-melt system for the downtown streets and sidewalks.

The state did not have enough money in this year's CDBG budget to totally fund the county's request, according to Wendy Ohst, assistant director of Employment and Training for Muskegon County. Ohst has spearheaded the county's CDBG application for the downtown streets and utilities.

Ohst said that state officials will try to "phase" funding for downtown Muskegon.

Initially, only $1 million is available but more CDBG funds could be sought next fiscal year beginning in October, Ohst said.

Another source of road and utility funding is in the current federal transportation funding bill pending in Congress. The U.S. House of Representatives and the Senate have approved transportation bills but they are now needing to be reconciled and the final bill needs the president's signature.

© 2005 Muskegon Chronicle. Used with permission