September 26, 2022

Muskegon and Grand Rapids disburse $15 million to housing developments

GRAND RAPIDS — Grand Rapids and Muskegon received a combined $15.4 million in grants from the state last week which they plan to use primarily for affordable housing.

The Michigan Strategic Fund board on Wednesday approved 22 grants totaling $83.8 million as part of the Revitalization and Placemaking (RAP) incentive program, which deployed $100 million in American Rescue Plan funds in Michigan.

The program provides grants of up to $5 million per real estate project development and $1 million per public space project. Local and regional partners who develop a coordinated subgrant program can get up to $20 million.

Of the $13.6 million Grand Rapids asked for, it receieved $9.37 million. Muskegon got $6 million of its $11 million ask.

Jake Eckholm, Muskegon’s director of economic development, said cities statewide asked for more money than they got.

“(The state) had $490 million (from) applicants for a $100 million pot of money,” he said. “We’re pretty excited that we got $6 million, because we got 7.2% of all statewide allocated funds, which for Muskegon is pretty darn good.”

Jeremiah Gracia, director of economic development for Grand Rapids, said his department will begin working with developers to determine how much of the grant money various projects will receive.

“That is yet to be determined,” he said. “What we do appreciate is the work that the MEDC has done to get these funds available across the state, specifically for us in West Michigan, in Grand Rapids.”

Grand Rapids projects

The city of Grand Rapids plans to use its subgrant for two commercial projects and nine housing developments totaling 376 units of affordable or attainable housing.

The commercial projects are:

  • A 28,000-square-foot renovation at 900 Cesar E. Chavez Ave. SW that represents a $4.1 million investment by developer Javier Olvera, co-owner of the Supermercado Mexico grocery chain. His corporate office will be on the second floor, while the first floor will have space for three to five tenants or a grocery store.
  • A 15,000-square-foot building at 217 Eugene St. SE proposed as the headquarters for Array of Engineers, an automated testing, embedded software and custom hardware designer for the defense, aerospace and medical device industries. The building will include a community STEM area, an office, electronics workshops and labs, and a hardware manufacturing space.
City of Grand Rapids
MoTown Squarewill consist of 54 units of affordable senior independent living housing in a facility occupying five connected parcels in southeast Grand Rapids.

The housing projects are:

  • Academy Manor, 108 units: PK Development Group and Third Coast Development plan to spend about $31.7 million to renovate the former Dominican Sisters of Grand Rapids’ five-story motherhouse on the Marywood Campus, at 1700 E. Fulton St., into an affordable and mixed-income senior housing development.
  • 2017 Eastern Ave. SE, 16 units: Developer Apposite Properties LLC plans to spend $3.8 million to renovate 12,900 square feet of vacant space in this two-story existing building in Seymour Square into 16 energy-efficient studio, one-bedroom and live/work units. The project will target renters earning between 45 percent and 80 percent of the area median income (AMI) for Kent County, which is about $29,500 to $52,500 per household.
  • Boston Square Together phase one, 45 units: The first phase of a project in the Boston Square Business District will include a building with 45 mixed-income one-, two- and three-bedroom rental units and an 8,350-square-foot food hall, at a total development cost of $20.6 million. Twenty-nine units will be designated affordable to those making 30 percent to 60 percent of the AMI, nine will be workforce housing, and seven will be subsidized units. The developers are Grand Rapids-based Amplify GR and Rockford Construction and Northbrook, Ill.-based Brinshore Development.
  • Lexington Apartments, 39 units — Commonwealth Development Corporation of America will spend $12.3 million to renovate the historic Lexington School into a three-story senior housing development with one- and two-bedroom rental units that will be affordable to those making 80 percent of AMI or less, with six of the units subsidized by city vouchers.
  • Eastpointe Commons, 56 units — Eastpointe Commons is a $22.7 million project by Hope Network to renovate a four-story building at 1450 E. Fulton St. into an apartment community for individuals and families making 30 percent to 60 percent AMI. Some units will be for people who have experienced chronic homelessness, and their rent will be 30 percent of their adjusted household income. There will onsite support staff to meet their needs.
  • MoTown Square, 54 units — The proposed $15.3 million project will consist of 54 affordable independent senior living units in a facility occupying five connected parcels at 240 Hall St. SE; 1210 Cass Ave. SE; and 1201, 1211 and 1215 Lafayette Ave. SE. It’s under development by the Grand Rapids housing nonprofit LINC Up.
  • Pinnacle Ventures, 12 units — The proposal for this $13.9 million project by Pinnacle Ventures is to renovate a three-building complex at 974 Front Ave. NW into 12 studio and one-bedroom apartments for those earning 60 percent to 80 percent AMI. There will also be 35,500 square feet of co-working and startup incubator space. The project is on a bike lane that connects to downtown, the Grand River Edges Trail and the White Pine Trail. Indoor bike storage and showers will be provided onsite.
  • United Methodist Community House, 46 units — The $14 million housing component receiving the subgrant is part of UMCH’s 100,000-square-foot, $28 million project at 900 S. Division Ave. It will include 46 units of affordable senior housing, a fresh market for low-income customers, a senior activity and meals center, a child development center, and an intergenerational community space. The project has been awarded $1,130,134 in low-income housing tax credits from MSDHA and Section 8 vouchers from the cities of Grand Rapids and Wyoming.

Although timelines for the 11 projects haven’t been set, ARPA program guidelines stipulate that funds must be appropriated by December 2024, and construction must be completed by December 2026.

Integrated Architecture
The mixed-use, two-building development at 880 First St. will include 80 to 90 units of housing, shared workspaces, fitness facilities, an event space and rooftop terrace. It is one of two housing projects in downtown Muskegon that will receive $6 million in RAP funds from the state.

The city of Muskegon’s application includes an accessible social gathering space and downtown mixed-income housing, but with $5 million less than requested, the city will channel the funds to housing, Eckholm said. That includes:

  • Lakeview Lofts phase two: The second phase of a new construction mixed-use development at 351 W. Western will include a new eight-story building. When completed, it will include 80 to 90 units of apartment housing and first-floor commercial. Josh Canale leads an investor group that’s developing phase two. The first phase, which is finished, was led by Great Lakes Development Group. Project cost was not disclosed.
  • 880 First St.: Local attorney Brianna Scott is the developer on this project in partnership with Ferguson Development Group in Lansing. Part of the project is in a six-story existing building, and the rest will be a five-story new build. It will include 80 to 90 units of housing, shared workspaces, fitness facilities, an event space and rooftop terrace. Project cost was not disclosed.
City of Muskegon
The second phase of a new construction mixed-use development at 351 W. Western will include a new eight-story building.

The developments are expected to break ground in spring or summer of next year. Both in downtown Muskegon, the projets are in desirable territory, Eckholm said.

“Across the street from 880 First St., there are luxury townhomes — the most recent one sold for well over $700,000 — and then right across the street from that, there’s a senior low-income housing tax credit development with 73 units of senior affordable housing, and so we’ve done a good job of creating an environment where there’s housing for all economic status,” he said. “That’s what we need to continue to do with these projects.”

He added that historically, smaller Michigan communities like Muskegon haven’t been as successful competing for state resources for projects like these, so landing this grant is “huge” for the city.

“If you do build the relationships with state agencies, and you work on projects that are cashflow positive, and you make good investments with your development partners, then … smaller communities can benefit from these programs, as well,” he said.