Michigan Strategic Fund Board Approves Two Major Projects in Grand Rapids, Kalamazoo

LANSING, Mich. - Today, the Michigan Strategic Fund (MSF) Board approved two Transformational Brownfield Plan (TBP) program projects in West Michigan that would create more than 2,000 jobs and 780 housing units combined, leveraging more than $892.3 million in private investment in Grand Rapids (Kent County) and Kalamazoo (Kalamazoo County).

"These projects on the Westside will create more than 2,000 good-paying jobs and add 780 units of housing," said Governor Gretchen Whitmer. "Transforming brownfields into new homes, businesses, and parks offers us a huge, job-creating opportunity that grows our economy and improves quality of life for Michiganders. We will continue to move forward with similar brownfield projects across the state and pursue our comprehensive economic development strategy to win projects, invest in people, and redevelop places to make sure everyone can 'make it' in Michigan."

"The transformational brownfield projects approved by the Michigan Strategic Fund Board today are proof of the statewide efficacy of the Make it in Michigan economic development strategy investing in People, cultivating and revitalizing Places, and winning Projects of all sizes," said Quentin L. Messer, Jr., CEO of the Michigan Economic Development Corporation (MEDC) and MSF Chair. "The Transformational Brownfield Program is a legislatively provided tool that continues to positively impact communities and enhance Michigan' capacity to attract and retain both talent and business investment. In addition to the volunteer members of the MSF Board, I am grateful to the respective development teams, Governor Whitmer, bipartisan members of the legislature, our local economic development partners and my MEDC teammates for their collective efforts to bring these transformational opportunities to fruition."

Grand Rapids Riverfront Project Receives Approval for Development of 670 New Housing Units, $795 million in Capital Investment

OVERVIEW: Fulmar Development Partners, LLC, received approval for a $560.89 million TBP incentive reimbursed over 30 years to transform nearly 7 acres at Fulton and Market streets in the City of Grand Rapids (Kent County). The project will invest about $795.8 million in the local economy through three new construction mixed-use towers, supporting more than 1,900 jobs and adding 670 housing units, a luxury hotel, more than 2,500 parking spaces, 68,000 square feet of greenspace, and nearly 38,000 square feet of retail space.

"On behalf of the project team, I would like to express our sincere thanks to the Michigan Strategic Fund Board for their strong support," said J.R. Berger, president, Magellan Development. "The TBP is a cornerstone of the Fulton & Market development. This tool unlocks our ability to transform a riverfront parking lot into a vibrant ecosystem of residential, restaurant, office, retail, hospitality, and public space that connects neighborhoods and further energizes the downtown Grand Rapids riverfront."

The TBP approved today will include the following components:

• Local and school property tax capture in the amount of $245.67 million, with state capture limited to $115.86 million.
• A maximum of $12.9 million in construction period tax capture revenues.
• A maximum of $21.14 million in construction period sales and use tax exemptions
• A maximum of $281.1 million in income tax capture revenues and withholding tax capture revenues, and sales and use tax revenues (post-construction) to be reimbursed over 20 years.

Three towers are expected to be developed: An office tower, hotel tower, and residential tower.

The office tower will span 21 stories, including parking. The first floor will host retail and restaurant space, as well as a common area office lobby. All told, the building anticipates $274.2 million in private investment with eight floors of parking and 13 floors of office, including amenity, conference, and executive space supporting 1,725 direct permanent jobs with an average wage of $87,000.

The hotel tower will replace an existing surface parking lot and include a 130-room hotel as well as ground-level retail and 76 owner-occupied residential condominiums. The project will be constructed on top of a parking podium offering 490 shared parking spaces between the hotel and residents. It will create 155 direct permanent jobs with an average wage of $59,000 and $193.3 million in anticipated private investment.

Finally, the residential tower replaces an existing surface parking lot and will be constructed on the same parking podium the hotel tower sits on. It anticipates having 43 stories and 595 residential units, including 118 studio apartments, 350 one-bedroom apartments, 117 two-bedroom apartments, and 10 three-bedroom apartments. This tower will include ground-level retail, 723 new parking spaces for residents, and the creation of 61 direct permanent jobs earning an average wage of $48,000 per year. The anticipated private investment for this tower is $328.25 million.

The project also includes investments in over 68,000 square feet of public space, including a promenade, riverwalk, lookouts, and riverfront steps.

WHY IT MATTERS: Grand Rapids has been receiving national recognition for its attraction of talent, and the creation, expansion, or retention of its businesses. The recognition has generated an increased market need for housing on top of the housing shortage that already exists in Michigan and nationwide.

Collectively, these efforts are also transforming underutilized property into vibrant areas to the tune of roughly $1.5 billion in investment across 26 acres. Upon completion, it is expected nearly 1,400 new housing units will be available. Additionally, the project sites are in "Neighborhoods of Focus" prioritized by the City of Grand Rapids for targeted reinvestment.

WHAT THEY'RE SAYING: "The Grand Rapids Fulton & Market Transformational Brownfield Plan represents one of the most notable redevelopment efforts in the country," said Sarah L. Rainero, Economic Development Director for the City of Grand Rapids. "By converting more than six acres of surface parking into a mixed-use skyline and activated public riverfront space, we are continuing the city's momentum as an economic engine that drives jobs, business growth, and tourism while expanding affordable housing opportunities. With the state's partnership, this $795 million investment will bring to life the community's vision for a vibrant, accessible riverfront."

"The Fulton & Market development will have the size, scale and impact to transform and revitalize long-underused prime riverfront property in the heart of our downtown," said Grand Rapids Mayor David LaGrand. "With well over $1 billion in downtown development currently shaping our riverfront, we are elevating Grand Rapids as a place where businesses want to be and people want to live and work. This project will create much-needed housing and will connect downtown hotel and business districts with the Acrisure Amphitheater, riverfront trails and diverse neighborhoods to the south-all while making a multi-million-dollar contribution to the City's Affordable Housing Fund."

"This development will help establish Grand Rapids as the hub in the regional Grand River Greenway trail system giving residents and visitors universal access along the river," said Tim Kelly, president and CEO of Downtown Grand Rapids, Inc. "This skyline defining project will also invest in ground-level connectivity, creating riverfront pedestrian and cycling trails linking Fulton Street to the Acrisure Amphitheater and to Roosevelt Park, Black Hills and other southern Grand Rapids neighborhoods."

"The City's master plan identifies this area for dense, high-rise mixed-use development," said former Grand Rapids Mayor Rosalynn Bliss. Bliss isnow assistant dean of external relations at Michigan State University College of Human Medicine but the brownfield process for this project began while she was mayor. "This project-on long under-utilized private property-will bring connectivity, density and significant positive impact to our downtown core."

Kalamazoo Project Expected to Create 93 Jobs, 115 Housing Units, and Invest More Than $96 million in Downtown

OVERVIEW: PlazaCorp Realty Advisors, Inc., and the City of Kalamazoo Brownfield Redevelopment Authority, today received approval for TBP incentive package in the aggregate amount of roughly $54.6 million over 30 years. The plan supports the redevelopment of three properties totaling 3.4 acres in downtown Kalamazoo (Kalamazoo County). Combined, the project will create up to 93 jobs, deliver 115 new housing units, and invest approximately $96.5 million.

The TBP includes the following components:

• Local and school property tax capture of $16.1 million, with state capture limited to $5.78 million
• A maximum of $1.6 million in construction period tax capture revenues.
• A maximum of $1.5 million in construction period sales and use tax exemptions.
• A maximum of $35.3 million in income tax capture revenues, withholding tax capture revenues, and sales and use tax revenues (post-construction) to be reimbursed over 20 years.

The first property, the Michigan Avenue Courthouse, will be redeveloped into a boutique hotel with 127 rooms and amenities such as a lobby bar, restaurant, fitness center, and more.

The second property, 619 Porter Street, will deconstruct a vacant industrial building to construct a five-story, mixed-use building that will include 5,000 square feet of commercial property, as well as 58 residential units.

The final property, The Speareflex Building on Kalamazoo Avenue, will be rehabilitated to create 57 residential units.

WHY IT MATTERS: Both Kalamazoo County and the City of Kalamazoo have identified the expansion of housing as a key priority and essential to supporting economic vitality in the area. This TBP will make meaningful strides in pursuit of that goal while also preserving historic properties and cleaning up brownfield sites, demonstrating how the reinvention and revitalization of challenging properties can be transformational within the community.

WHAT THEY'RE SAYING: "We are grateful to the Michigan Strategic Fund, MEDC staff, and our local partners, including the City of Kalamazoo, Brownfield Redevelopment Authority, NCBDA and DEGA, for their confidence in this Transformational Brownfield Plan. This approval allows PlazaCorp to advance a coordinated redevelopment that brings new housing, hospitality, tourism, and commercial activity, while repurposing and revitalizing Kalamazoo's historic buildings and cleaning up brownfield sites," said Trisha Kidd, Director of Project Management for PlazaCorp Realty Advisors, Inc. "Through this plan, we are transforming previously underutilized and contaminated properties into vibrant destinations that strengthen downtown, stimulate economic activity, and create lasting benefits for the community."

"This plan reflects years of collaboration and a shared commitment to reinvesting in Kalamazoo's core," said Jamie McCarthy, Development Manager for the City of Kalamazoo. "We are enthusiastic about the opportunity to leverage brownfield tools to support redevelopment that delivers new housing, addresses environmental challenges, and strengthens our downtown and surrounding neighborhoods."

NOTE FROM THE MEDC:

Investment and job numbers represent the commitment made by the business to the state of Michigan. Terms will be formalized in a performance-based project agreement, with funds disbursed as reimbursement based on eligible expenditures, and are subject to amendment or cancellation if the commitments are not met due to risks or uncertainties. The Michigan Economic Development Corporation provides a public annual report on agreements and their status to the state legislature.

About Michigan Economic Development Corporation (MEDC)

The Michigan Economic Development Corporation is the state's marketing arm and lead advocate for business development, job awareness and community development with the focus on growing Michigan's economy. For more information on the MEDC and our initiatives, visit www.MichiganBusiness.org. For Pure Michigan® tourism information, your trip begins at www.michigan.org. Join the conversation on: FacebookInstagramLinkedIn, and Twitter.