Here’s something you don’t see everyday. Construction workers building the Lemmen-Holton Cancer Pavilion atop Health Hill recently shutdown three lanes of traffic on Michigan Avenue to set up a rubber-tired crane truck.
But the 300-ton mobile crane wasn’t parked on the street in downtown Grand Rapids to lift and lower materials for the $78 million medical complex. It was there to assemble an even bigger lifting machine. Now a 250-foot tall tower crane swings the heavy pieces in place for what will be the six-story cornerstone of cancer care and research in West Michigan.
The spectacle of one oversized crane building another giant crane underscores that while Grand Rapids remains a modest medium-sized American metropolis, the scale of investment, development, and ambition in the city is changing dramatically.
The revival of downtown picked up pace in the early 1990’s with $1 million street reconstruction projects, $5 million building rehabs, and the occasional $50 million office or condo high rise. But today it’s not unusual to see monstrous new developments exceeding $100 million. Just look at the cranes – and the buildings – rising in the skyline.
The tower crane giving rise to the 24-story Marriot Hotel currently stands 195-foot tall. But it will jump to 300-foot later this summer. “Somebody said when we get to 300 feet we’ll be able to see Lake Michigan,” said Mike Gnewkowski, who manages construction of the hotel for Rockford-Pepper. "I'm not sure I'll make the climb to see that view."
One block east a 125-foot tower crane with a 200-foot boom is building the new Grand Rapids Art Musuem. There’s a 200-foot tall crawler crane constructing Kennedy Hall on Grand Valley State University’s downtown campus. And another high-rising crawler crane working on the site of the 9-story Icon on Bond condo project, where yet another tower crane is scheduled for assembly in July. Together with the cancer pavilion, these projects now account for some $400 million worth of construction currently underway in the immediate downtown area.
“The size, scope, and momentum of what’s happening downtown all are increasing dramatically,” said Chris Beckering, a real estate advisor with Grubb and Ellis, a commercial realty company. “That’s true in a big picture sense but also when you dial it down to individual projects. A $220 million convention center. $150 million medical towers. A $120 million Marriot. A $190 million children’s hospital. Five years ago we didn’t see projects of that magnitude.”
A Safe Bet
Ironically, the leap to big ticket developments in the central city came as Michigan’s economy began to spiral downward. Public agencies and private developers invested approximately $691 million in new buildings, renovation projects, refurbished streets, parks, and other downtown projects from 1990 to 1999, according to records from the Grand Rapids Planning Department. But, even amid high unemployment, corporate bankruptcies, and other troubling economic trends, the total downtown investment jumped considerably from 2000 to the present day and already exceeds $1.5 billion.
And more cranes are on the way. Developers have yet to break ground on a lengthy list of projects totaling some $730 million, including construction of the St. Mary’s Hauenstein Neuroscience Center and expansion of the Van Andel Research Institute. And with every new crane and building that rises up, the fading perception that downtown is a risky place to do business gets beat further down.
“Downtown is a great place to invest,” said Sean Welsh, regional president for National City Bank, which has invested some $35 million in a variety of development projects in the urban core, including the conversion of Union High School into condominiums and the restoration of the D.A. Blodgett Home for Children.
“There’s a trend back towards urbanization in the United States,” Welsh said. “That’s partly due to environmental concerns, and the desire to preserve green space. But it’s also due to the fact that the younger generation wants to be closer to academic institutions, energetic nightlife, and the arts. Grand Rapids has visionary leadership that understands this trend and the city is at the forefront in terms of providing those kinds of amenities.”
Many Happy Returns
Bankers, developers, and real estate professionals agree that the city now is experiencing “a snowball effect” of growth and investment. In the early stages of the renaissance, when the central city was more gritty, new businesses and condos attracted more adventurous residents and entrepreneurs who added fresh energy to the urban scene. That in turn generated additional property and income tax revenues, which leads to improved city services, which attracts still more residents and visitors, which encourages yet another wave of investment in retail, commercial, residential, and public space.
Today, the total public and private investment in downtown Grand Rapids since 1990 approaches $3 billion. And the significant return on those targeted expenditures is becoming increasingly clear:
- In the past decade, city income tax revenues have more than doubled, to $59 million annually.
- In the past 13 years, taxable property values have nearly doubled, to $8.7 billion.
- In the past decade, ridership on the Rapid, the metro area transit service, has doubled to approximately 6.4 million annual rides.
- Median household income has risen by more than $14,000.
- Diversity is increasing. The central city’s Latino population tripled in the 1990’s.
- And demand for downtown housing continues to grow, according to an independent 2004 residential housing study.
“We’re coming full circle,” Welsh said. “Investing downtown makes good business sense and we’re starting to see the benefits and returns on much of the early investment.”
Local Action, Global Draw
Some say the modern day revival of Grand Rapids began in the early 1980’s with the opening of such downtown anchors as the Amway Grand Plaza and the Gerald R. Ford Museum. Others hold the renaissance didn’t really gain significant momentum until the mid 1990’s, with the opening of the Van Andel Arena and its ancillary pubs, restaurants, and retail shops.
Much of the early work was done by local philanthropists, activists, and developers. But today the city is attracting a wider base of investors from primary cities across the nation. Chicago-based RSC Associates, for example, is working with local firms to develop an 11-story condominium tower at the corner of Fulton and Division. A Los Angeles-based speculator recently proposed a major entertainment, commercial, and residential development along the Grand River immediately south of downtown. And developers from Detroit continue to move forward with plans to construct a multi-screen movie theater in downtown’s Heartside district.
“It’s not just new construction,” said Chris Beckering. “We’re also seeing a lot of property change hands. And the buyers, many of whom are from out of town, aren’t just buying up the property to make a quick buck and flip it. They’re immediately planning to invest large amounts of money to restore and improve these buildings and position them for future, long-term success.”
“Grand Rapids is right on the cusp,” Beckering added. “The downtown area is very quickly becoming a real destination for people throughout west Michigan and the Midwest.”
Photographs by AJ Paschka - All rights reserved
Image descriptions top to bottom:
Construction crane at the Grand Rapids Art Museum
Construction crane at the JW Marriot Hotel
Kennedy Hall at Grand Valley State University's School of Engineering
Crane at Icon on Bond
Two Cranes at Lemmon-Holton Cancer Center