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MUSKEGON — Construction is underway on a sprawling $120 million development on Muskegon Lake.

The group behind the Harbor 31 project held a ceremonial groundbreaking last week for the mixed-use project at 650 Terrace St., the first of four major builds on former industrial sites in the city’s effort to make itself as a tourist destination.

When completed in 2026, Harbor 31 will include over 200 units of housing, a hotel, a marina, restaurant and retail space, boat rentals and restored wetlands.

That’s on top of existing projects at the site, including Grand Valley State University’s Muskegon Innovation Hub business incubator, a law firm, and other offices accounting for over $20 million in investment. The site will also be home to Trilogy Health Services’ $25 million senior living campus on land bought from Harbor 31.

The group behind Harbor 31 includes Belmont-based Henrickson Architecture + Planning; South Bend, Indiana-based Great Lakes Capital, and two Grand Rapids companies, civil engineer Paradigm Design and contractor Wolverine Building Group.

The 34-acre project sits on the former site of Teledyne Continental Motors, which made engines for tanks and aircraft during World War II. The plant closed in 1991, was demolished in 1993, and underwent environmental remediation beginning in 1997, with roads installed in the early 2000s.

Dan Henrickson, president of Henrickson Architecture + Planning, is a founding partner of the Harbor 31 development group. He and a group of other investors collectively known as Muskegon Lakeshore LLC bought the property in 2007.

At first, they held the space for a proposal that included a tribal casino as the anchor tenant, along with a hotel, restaurants, a water park and other facilities. The project never materialized, and about three years ago, the investors felt it was time to move on and give the land another use.

“We just sort of ran out of patience for that,” Henrickson said. “You can only hold on to some property for so long. The city all along has been very cooperative, but they want development; they want to create a tax base.”

So he and some different partners formed the Harbor 31 group, which acquired individual parcels from the Muskegon Lakeshore group.

Henrickson, 62, is from Coopersville in Ottawa County, but spent time in Muskegon growing up and holds a soft spot for the town. Until recently, a few industrial companies owned all the land around the lake, making redevelopment impossible until the sites were decommissioned and the land went up for sale.

In recent years, three other multimillion-dollar developments have been announced around the lake: Windward Pointe, a residential and commercial development at the former Sappi Fine Paper Mill site; The Docks, which will bring 240 homes to the idled sand mining site Pigeon Hill; and Adelaide Pointe, which will add a marina, hotel and condos on a parcel that’s been vacant since the 1970s.

Harbor 31 is the first of the four projects to break ground.

Jake Eckholm, director of economic development for Muskegon, said the four projects combined represent over 1,000 units of housing, as well as parks, retail, fishing piers and other amenities — all of which he views as “equally significant” and “a complete 180” from the lake’s historic industrial use.

Within the past five years, the city of Muskegon’s attractions have already been growing, he said, with new restaurants, breweries and retail popping up. These four major developments will continue that transformation, he said.

“They represent absolutely a catalytic change to our lakeshore and to our community,” Eckholm said.

The city of Muskegon has been working with Harbor 31 LLC and the state Department of Environment, Great Lakes and Energy (EGLE) to ensure necessary permits and financing are in place. The developers are receiving brownfield tax increment financing — reimbursements that could equal up to $3 million — to help finance the environmental remediation and wetland mitigation.

For the single-family housing portion of the development, a 15-year neighborhood enterprise zone was created that will allow individual homeowners to receive tax benefits, since it’s deemed a distressed census tract, Eckholm said. He said he did not have an estimate of the value of those tax breaks.

Henrickson said Harbor 31 has been more difficult to plan than expected due to the wetlands, which formed in 2017 when the area’s water table rose and which had to be evaluated by the Army Corps of Engineers, EGLE and the federal Environmental Protection Agency. With the help of Sen. Jon Bumstead (R-Newaygo) the project recently secured a $2.3 million grant from the state to help with the remediation.

Harbor 31 will preserve 5.5 acres of wetland onsite and is buying 9 acres offsite to offset the remaining wetlands at the development site, Henrickson said. He believes it will be worth the effort to have a wetland preserve as part of Harbor 31.

The $120 million price tag of the development is only an estimate, as construction costs continue to rise, Henrickson said. But as of now, the developers are planning for the apartments to be market-rate while the single-family homes will cost between $695,000 and $795,000, which Henrickson believes is a relatively affordable price for lakefront property.

• Viridian Shores: 30 single-family homes with rooftop gardens, connected garages, 52 boat slips and a pool for residents. This is the first element of the project under construction.
• The Meadows at Harbor 31: 21 town homes that will also have boat dock and pool access. Work on these is expected to start in the next three months.
• Trilogy campus: 105-bed senior living facility on the eastern side of the development that will break ground in October.
• Harbor 31 Commons: A four-story mixed-use facility that will include 152 apartments with about 9,000 square feet of retail, which will start after the Trilogy project.
• Hotel: Flagship hotel of the development and fifth in the lineup. Further details haven’t been released.
• Marina: 90 boat slips (including those at Viridian Shores).
• Tommy’s Boat: Boat storage facility on the water, which includes retail boat sales and rentals with a fueling dock.
• Retail and restaurant space also on the water.
• Offices and storage: The current plan lists this as 18,000 square feet of market rate commercial space. Henrickson said it also could potentially be used as a car wash or additional restaurant space.

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