Wealthy Street Mega Thread

[wingbert]

On 4/25/2017 at 10:03 AM, GR_Urbanist said:

It's a cath-22.

The more they expand, the more they make, and then that's more they pour (pun) back into GR. Maybe a real DT corporate HQ building? Maybe lots of donations for local projects like Amway and Meijer has?

But the more they expand in other cities, it could mean they have less loyalty to GR. We have a number of big companies, with business all over the region and planet, whose corporate HQs are located in some out of the way suburban/rural place, and Founder's could easily do the same if they outgrow their DT location.

They'll move to the 'burbs when people can no longer find affordable parking nearby.  

[GRDadof3]

On 4/25/2017 at 9:31 AM, thebeerqueer said:

I feel in this situation, it's both but we can't be sure until the full plans and scale (capacity, food service, music, etc ...) are announced. 

In a purely selfish way, I kinda' loved that the only taproom was in GR. I know it won't detract from the awesomeness of the main taproom but has me feeling slightly conflicted. 

Honestly I think the main taproom has lost it's luster lately. The crowd there, I should say. 

10 hours ago, localtalent said:

When you make the beer and sell it in your own facility, it's WAY more profitable than moving it through a distributor.

Also, Founders doesn't have a very ambitious food menu, so the taproom will be quite inexpensive to operate.

The beer they sell at a "high profit" in their taproom is a very tiny fraction of their sales every year. They've said that as well. They're not going to make a ton of money off of the Detroit one, it's just to have a Detroit presence

Let's go out on a limb and pretend that the taproom here serves 1000 pints of beer a day at $5 a pop, and Detroit will do the same. That's $1.825 Million a year figuring 365 days a year. Let's pretend they make 10% profit off of those sales, because most restaurants/bars make around 5 or 6%, but founders has very little overhead. That's $182,500 a year in profit...... that's peanuts when you have so many investors and owners to pay. $30,000 to you, $30,000 to you, $30,000 to you. 

Oh and here's a check for $1.5 Million for your portion of profits off our distribution sales in the state of Wisconsin last year.  

 

[walker]

On 4/17/2017 at 11:01 AM, walker said:

As a frequent patron of the Red Brick Pizza restaurant on the corner I’ve casually noted the condition and demographics of the three neighboring streets and particularly of Donald Place over the past few years.   While it is very heartening to see the improvements that have happened to the housing stock including the building of several new “old” looking houses, the demographics have definitely shifted.  Don’t like to mention race but since I never thought to survey people about their economic situation on my way into the restaurant, I’ll use race as a proxy here.  A few years ago the people on the street were mostly black and from their general appearance not exceptionally prosperous.  Now it’s mostly young nicely dressed white people I see in the neighborhood.  My observations are in no way scientific, so I could be missing something here, but I think these improvements have definitely been pushing many of the old neighborhood residents away. 

I usually consider the anti-gentrification rhetoric that people with an agenda like Jeff Smith spout to be overblown nonsense but here at least as I have casually observed it, is a real example of poor people being pushed out.  Obviously there is a lot more housing stock along the Wealthy corridor now than just a few years ago, and maybe the people that once lived on Donald Place have moved on to better new low cost housing not far away and they are really happy, or maybe some of them have made a killing selling their old poorly maintained houses to developers, I don’t know.  I like all the new stuff as well as anyone here (as long as it’s not a faux castle) but I kind of wonder about the other side of this too.

As I write this I see Dave has made a nice post about the new construction.  Obviously the new construction isn’t displacing anyone, but I wonder if he knows if there have been any kind of studies, casual or official, about movements of people in the neighborhoods.  Where do they go?                       
 

 

On 4/17/2017 at 6:30 PM, KCLBADave said:

Walker, if I could answer the question about gentrification in an Urban Planet post I think I could make millions writing a book.  One thing about housing, whether it be new construction or renovation of existing, when it happens in mass like has happened in the Baxter and surrounding neighborhood it has a huge effect on the value of all the real estate in that neighborhood.  This is true regardless of whether or not it is ownership or rental being built.

I was told that the Eastown and Baxter neighborhoods have seen the highest increase in average sales price in a 7 county region.

In general, without any sort of a study done,  I can tell you that unequivocally lower income households (demographically this means African American and Hispanic families) are being displaced from our City in startling numbers.  There is evidence of this is in the demographic changes we are seeing in Grand Rapids Public Schools and conversely Kentwood, Wyoming, Godwin Heights, and even Northview, and Comstock Park School systems.

Average rent for a 2 bedroom in Grand Rapids is approaching $900 a month.  

This isn’t about the Wealthy Street neighborhood specifically but I think this podcast today from Michigan Radio about housing in GR ties in nicely with my post above and Dave Allen’s reply.  Unlike my casual observations, the Michigan Radio people actually did some research:

michigan radio - pushed out in grand rapids

What I found new and most interesting was all the outside investors buying up local housing (houses, not new apartment buildings.)  That’s something that I think has mostly escaped our attention here on urbanplanet.  

What I didn’t agree with in the podcast was the suggestion that minorities were being pushed out because of racial prejudice but then maybe I’m naive.  In my opinion, it’s overwhelmingly about money, not race.

 

Edited April 27, 2017 by walker
for the usual typos

[Pattmost20]

8 hours ago, walker said:

What I didn’t agree with in the podcast was the suggestion that minorities were being pushed out because of racial prejudice but then maybe I’m naive.  In my opinion, it’s overwhelmingly about money, not race.

I think the reason it may seem that way is because of the historically racist practices of red lining. Minorities have ended up in the cheaper, less desirable neighborhoods, which are now the neighborhoods ripe for redevelopment and the places where you can still get deals on houses. So I agree with you that today, it is about money, but it may look to people outside of the real estate world like they are targeting neighborhoods with the highest minority populations.

[thebeerqueer]

11 hours ago, GRDadof3 said:

Honestly I think the main taproom has lost it's luster lately. The crowd there, I should say. 

I agree with that statement. Some of the people that roll in there like they own the place or that its a daycare facility, they seriously detract from the experience. I tend to avoid, like the plague, certain days and certain times to minimize my exposure to that crowd so I can enjoy my time there. 

That being said, for me, there's nowhere closer with more consistent, well made beer than the main taproom at Founders. Also, as a mug club member it's hella' cheap for me to drink good beer there. 

[localtalent]

11 hours ago, GRDadof3 said:

 

The beer they sell at a "high profit" in their taproom is a very tiny fraction of their sales every year. They've said that as well. They're not going to make a ton of money off of the Detroit one, it's just to have a Detroit presence

Let's go out on a limb and pretend that the taproom here serves 1000 pints of beer a day at $5 a pop, and Detroit will do the same. That's $1.825 Million a year figuring 365 days a year. Let's pretend they make 10% profit off of those sales, because most restaurants/bars make around 5 or 6%, but founders has very little overhead. That's $182,500 a year in profit...... that's peanuts when you have so many investors and owners to pay. $30,000 to you, $30,000 to you, $30,000 to you. 

Oh and here's a check for $1.5 Million for your portion of profits off our distribution sales in the state of Wisconsin last year.  

 

I believe your numbers are off...by a lot.

While your premise is true (this won't be a major driver of Founder's overall profit), the taprooms DO make money. And for anyone not named Founders/Bells/New Holland, they are a major component of profitably running a decent sized brewing operation.

[EastownLeo]

There are a few local "realty" - "property management" companies that are working as brokers and managers of these properties that are owned by outside investors.

Just as the media started to cover how good a market GR was many of these companies were approached to start managing the deals and property.  Does some of the blame go with them?  They were just doing business, but being the hands of people that are disconnected from a neighborhood, being thousands of miles away.

California investors have pumped a lot of cash into one specific company I am aware of.  In many cases buying up properties for more than than a local would have paid, because they saw more long term profit as property values increased and so did rental averages.

They followed the moving map of property and rental value increases, in this market it started to creep into those areas with the highest minority populations partly because the other areas had already been snatched up because they were first to start to grow after the crash.

 

Edited April 27, 2017 by EastownLeo

[GRDadof3]

8 hours ago, localtalent said:

I believe your numbers are off...by a lot.

While your premise is true (this won't be a major driver of Founder's overall profit), the taprooms DO make money. And for anyone not named Founders/Bells/New Holland, they are a major component of profitably running a decent sized brewing operation.

I was just mainly talking about Founders. Dave himself told me they don't make a ton of money off the taproom. I guess the definition of "ton" is subjective.

[x99]

On 4/27/2017 at 9:33 AM, EastownLeo said:

California investors have pumped a lot of cash into one specific company I am aware of.  In many cases buying up properties for more than than a local would have paid, because they saw more long term profit as property values increased and so did rental averages.

6% looked good to them when they couldn't even get 2% back home.  Still, a 6% return is ultimately a recipe for a disaster.  A simple furnace replacement (since these returns rarely include long term maintenance and upkeep) easily wipes out years of returns on a cheap single family home.  So we'll see how that works.  But that still has little to do with rising rents.  That's just a matter of being able to get a decent return that covers expense.  So far as rising rents, the city shoulders significant blame because of the economically discriminatory impact of its housing policies (and perhaps, by extrapolation, racially discriminatory).  New two, three, and four family properties are effectively banned as either conversions or new construction. This is your typical small investor playground, and the historic method for keeping rents affordable, and keeping the cost of entry into a neighborhood down.  Is it any surprise that investors bought up single family homes and turned them into rentals?  Or that minorities are being pushed out by simple economics?  Even if you want a smaller, more affordable space, the city's answer is basically "Either cough up the cash for a large place you can't afford, or get out."  

Edited April 28, 2017 by x99

[mpchicago]

Thanks to PPWIII on Flickr for snapping this pic 650 Wealthy.  Glad to see work moving forward.  Does anyone know if a lease was signed? 

[EastownLeo]

Harmony Brewery, expanding in Eastown.

Does this mean Subway is leaving?  or is Harmony taking over the unused half of the building?

http://mittenbrew.com/2017/05/harmony-brewing-expand-eastown/

[GVSUChris]

24 minutes ago, EastownLeo said:

Harmony Brewery, expanding in Eastown.

Does this mean Subway is leaving?  or is Harmony taking over the unused half of the building?

http://mittenbrew.com/2017/05/harmony-brewing-expand-eastown/

Harmony bougt the building from the subway franchisee so I assume they're leaving. 

[EastownLeo]

15 hours ago, GVSUChris said:

Harmony bougt the building from the subway franchisee so I assume they're leaving. 

Good to hear, It will be interesting, the talk of "beer garden" Makes me think they may be taking over the parking lot for a larger garden space, or removal of the building?

[GRDadof3]

8 hours ago, EastownLeo said:

Good to hear, It will be interesting, the talk of "beer garden" Makes me think they may be taking over the parking lot for a larger garden space, or removal of the building?

The application says "into the adjacent building" so it sounds like the subway building will stay. 

[GR_Urbanist]

Nice!

That is a major focal point of the district! They can certainly turn that lot into something awesome.

 

And no more obnoxious giant Subway sign on a stick making the area look cheap!

[walker]

A few pics and thoughts about my walk down Wealthy today:

First; 746 Wealthy, the building that was reduced to a facade only, they are framing now behind the facade and there is a COMING SOON sign out front.  Looks like it's going to be a hipster chiropractor 

 

Next: A notice taped to the door at 733 Wealthy, the Lofts on Wealthy LLC.  A water shut off notice, they haven't been paying their water bill.  Likely just some kind of clerical oversight;

 

And last, nothing new going on at D&G party store and Mom's Grill but every time I walk by here it reminds me of the rules to live by written by an author who I was really impressed with when I was young;

Never play cards with a man called Doc. Never eat at a place called Mom's. Never sleep with a woman whose troubles are worse than your own. - Nelson Algren

and who hasn't found themselves in trouble after ignoring one or more of those rules? 

Edited June 15, 2017 by walker

[GVSUChris]

On 5/27/2017 at 4:47 PM, walker said:

Next: A notice taped to the door at 733 Wealthy, the Lofts on Wealthy LLC.  A water shut off notice, they haven't been paying their water bill.  Likely just some kind of clerical oversight;

 

 

Ummmm...well...without starting any rumors I think things aren't going so "great" over at  616. I know multiple people there who were let go last week and from a few people I've talked to around town who are close with 616 it sounds like things aren't on the up and up financially. I just hopped onto their website and saw that even more people were cut than I thought. 

I'm hoping this doesn't have any major effect on some of their projects (especially this particular project.)  I also know they've scaled WAY WAY WAY back on their piece of the movie theater project. If anyone has any better or more clarifying information I'd love to hear it. 

[GRDadof3]

1 hour ago, GVSUChris said:

Ummmm...well...without starting any rumors I think things aren't going so "great" over at  616. I know multiple people there who were let go last week and from a few people I've talked to around town who are close with 616 it sounds like things aren't on the up and up financially. I just hopped onto their website and saw that even more people were cut than I thought. 

I'm hoping this doesn't have any major effect on some of their projects (especially this particular project.)  I also know they've scaled WAY WAY WAY back on their piece of the movie theater project. If anyone has any better or more clarifying information I'd love to hear it. 

Well if they need to borrow $714.23 to pay this water bill, I can probably loan it to them.  

I know they hired at least one person recently. 

[GRDadof3]

15 hours ago, GRDadof3 said:

Well if they need to borrow $714.23 to pay this water bill, I can probably loan it to them.  

I know they hired at least one person recently. 

And another is going to Rockford:

http://www.grbj.com/articles/88103-construction-firm-hires-director-of-property-management

[EastownLeo]

On 6/1/2017 at 1:48 PM, GRDadof3 said:

And another is going to Rockford:

http://www.grbj.com/articles/88103-construction-firm-hires-director-of-property-management

Just saw another person who used to work at 616 has now moved on.  They must be cutting.

[Pattmost20]

Linc Up is opening their newest restaurant project in the Freyling Mendels development (1059 Wealthy). Going to be called 40 Acres Soul Kitchen.

[GVSUChris]

On 6/5/2017 at 9:53 AM, EastownLeo said:

Just saw another person who used to work at 616 has now moved on.  They must be cutting.

Here's an "update" of sorts. 

https://mibiz.com/news/real-estate/item/24856-with-new-joint-venture,-616-development-positions-for-the-future

EDIT - I could have included this too I suppose. 

http://www.grbj.com/articles/88194

Edited June 13, 2017 by GVSUChris
More to add

[mgreven]

There was an article in the GRBJ too but I didn't remember where the 616 conversation was.   =)  The MiBiz article was a lot more detailed, though.  Thanks for posting.  Looking forward to more movie theater information.  

[walker]

On 6/6/2017 at 8:00 PM, Pattmost20 said:

Linc Up is opening their newest restaurant project in the Freyling Mendels development (1059 Wealthy). Going to be called 40 Acres Soul Kitchen.

 

Nice Mlive article giving some background on Forty Acres and its owners:

upscale_soul_food_restaurant

[walker]

On 4/27/2017 at 0:06 AM, walker said:

 

This isn’t about the Wealthy Street neighborhood specifically but I think this podcast today from Michigan Radio about housing in GR ties in nicely with my post above and Dave Allen’s reply.  Unlike my casual observations, the Michigan Radio people actually did some research:

michigan radio - pushed out in grand rapids

What I found new and most interesting was all the outside investors buying up local housing (houses, not new apartment buildings.)  That’s something that I think has mostly escaped our attention here on urbanplanet.  

What I didn’t agree with in the podcast was the suggestion that minorities were being pushed out because of racial prejudice but then maybe I’m naive.  In my opinion, it’s overwhelmingly about money, not race.

 

Late last night GRDadof3 had the link below posted apparently by mistake to a post in the New projects in Monroe North thread.  I see this morning it’s gone and replaced by the link he meant to post.  But I think the mistaken link was really very interesting and probably better fits in this discussion.  It’s about the writer's experience selling her house in the hot real estate market in the Baxter neighborhood along with some thoughts about the consequences:

cash on the table

Edited June 14, 2017 by walker