Grand Rapids Downtown Development Authority okays $36M apartment development in Heartside

The Grand Rapids Downtown Development Authority approved the creation of a Payment In Lieu Of Taxes (PILOT) for the proposed construction of an estimated $36 million apartment development on the city's south side in Heartside.

The development, proposed for vacant properties at 205 S. Division Ave., 26 Cherry St. SW and 240 Ionia Ave. SW, is a new project by Midland-based Brookstone Capital, LLC, developers of millions of dollars in housing in Serrano Lofts, 101 S. Division, Metropolitan Park Apartments and other projects in Heartside.

Combined, the three new buildings could bring over 130 new affordable and market rate apartments to an area undergoing a surge of development.

"Eighty percent of the apartments are for people making 60 percent of the area median income -- they have to be bringing in a paycheck," says Downtown Development Authority Executive Director Kristopher Larson. "It will be mixed income, with a market-rate component for 20 percent of the units."

Unlike zoning, which stays with the property and not the development project, the PILOT is approved for the property improvement project only, says Larson. The DDA and Grand Rapids City Commission both approved this pilot for 40 years at 205 S. Division Ave. and 26 Cherry St. SW, and 35 years at 240 Ionia Ave. SW.

Larson says the PILOT means that "instead of the new tax increment that would have been collected coming to us (the DDA), a large portion of it is abated to contribute to the operational costs in developing workforce housing."

The PILOT paves the way for Brookstone Capital, LLC to be part of the Michigan State Housing Development Authority Low-Income Housing Tax Credits Program. Brookstone also seeks State of Michigan Brownfield Tax Credits.

At press time, Brookstone Capital had not returned Rapid Growth's request for comment.

Source: Kristopher Larson, Grand Rapids Downtown Development Authority; agenda packet information from Grand Rapids Downtown Development Authority meeting of Sept. 12, 2012
Writer: Deborah Johnson Wood, Development News Editor