City of Grand Rapids solves a complex urban development challenge

City of Grand Rapids Solves a Complex Urban Development Challenge

Located along the banks of the Grand River in West Michigan, Grand Rapids has scaled economic heights in recent years to become a dynamic city and a top job market. An unprecedented development boom is bringing new hotels, offices, shops, apartments and condominiums to the city.

All the good news posed a challenge for the City of Grand Rapids. In a market short of developable land, the city saw an opportunity to transform a city-owned prime riverfront site, 201 Market Avenue SW, into a vibrant community for living, working and outdoor recreation.

The obstacle? The site is occupied by the city’s road salt reserve, vehicle maintenance center and office for several municipal departments. But the need for change was clear. Not only is the site outdated for today’s larger trucks, but also the brownfield site has become increasingly incompatible with the emerging growth in downtown.

The city enlisted our team to help pursue its bold vision for 201 Market Avenue SW. The challenge was two-fold. One, the city needed a plan for repositioning the site and attracting high-quality developers to create a lively neighborhood. And, the city needed to secure a new, more appropriate, site that could accommodate today’s public works operations.

The highly complex, multi-stage project involves leveraging state and city financing tools, attracting private developer partners and managing myriad details to bring it all to fruition. A critical part of the project was to help build consensus around the project among stakeholders ranging from the mayor and city commission to community advocates and business groups.

A strategic solicitation for private developers

First, Grand Rapids needed a request-for-qualification (RFQ) and request-for-proposal (RFP) process that would attract high-quality developers and their proposals. Recognizing that developers are averse to lengthy approval processes and other municipal hurdles, city devised an RFQ/RFP that presented a compelling opportunity.

One strategy is to apply for Michigan’s brand-new Transformational Brownfield tax incremental financing (TIF) program. Combined with a local TIF that Grand Rapids’ City Commission was considering, the Transformational Brownfield TIF would reduce the financial risk for developers and the city.

The solicitation attracted five RFQs and three proposals from leading regional and national developers. The selected proposal met the city’s goals of combining mixed-income residential options and green spaces with hotel, retail and office facilities. Equally important, the firm had a track record of success with creating complex urban mixed-use projects and working with public incentive programs.

Now, the city is structuring an agreement in which a developer will acquire 201 Market Avenue SW at a price that will fund the relocation of city operations and the redevelopment of the site.

Once the Transformational Brownfield TIF designation and other public incentives are secured, the city will sell the property to the developer to begin the $150 million project. Through the TIF, sales and income taxes generated by the development will help fund the site acquisition and remediation.

Relocation—and redesigning—the public works facility

Concurrently, the city is relocating the public works facility and the multiple city departments involved. We are facilitating collaboration between the city and a group of architecture, engineering and construction consultants to plan a cost-efficient, forward-looking site plan.

Collaborating with the city leadership, Grand Rapids is creating an amenities-rich live-work-play riverside neighborhood while conserving taxpayer dollars. When it comes to putting together the pieces of a complex urban redevelopment puzzle, a little ingenuity goes a long way.