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Kendall Building to be redeveloped?

nurfle!

By nurfle!
in Grand Rapids

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Parhelion Whistle-Stop

Parhelion

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I can see the fountain outside the Kendall buiding from my window, and would *love* to see this building redeveloped! As a condo owner, I'm also happy they'll be apartments as opposed to condos, since I think we need more less permanent living options for young professionals or empty nesters in the core downtown area.

Seeing ground floor retail would be fantastic, too! Perhaps we can get a tenant in 52 Monroe Center, too. . . :) Developing the Kendall into apartments would be a huge victory for the area!

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GR Jackson Hamlet

GR Jackson

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$4 million for 12apts and 1 0r 2 retail spaces with very limited parking. Wow! Even with brownfield, etc. those are some tough numbers to crunch.

I had an option on this building several times. We tried it from many different angles, including apartments. We shopped it to the city and others with little or no success. The numbers just never added up, so if they can make it work they sure have my admiration.

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joeDowntown Metropolis

joeDowntown

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This has always been one of my favorite buildings downtown and I really hope it happens. It's interesting, 12 years ago I had a mental list of the buildings I would like to see redone. The Kendall building is one of the last (the Icehouse, the United Way building and the building McFadden's is in were also at the top). Now I want to see that funky building (with what looks like multiple additions) across from Cooley get redone. And, of course, the Keeler Building.

Joe

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ModSquad Hamlet

ModSquad

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I had an option on this building several times. We tried it from many different angles, including apartments. We shopped it to the city and others with little or no success. The numbers just never added up, so if they can make it work they sure have my admiration.

I do not mean to be a downer, but with all the the characters involved in this project and their track records, I will not believe it until I see the construction start.

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PR-15 Whistle-Stop

PR-15

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I do not mean to be a downer, but with all the the characters involved in this project and their track records, I will not believe it until I see the construction start.

Brice has a good track record with his other Monroe Center @ Ionia project...that building was vacant for a long time and needed a miracle on the rehab side...and he pulled that off. I have no inside information but I feel good about this one happening.

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joeDowntown Metropolis

joeDowntown

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I tend to agree with you as Azzar is slippery, but I am really going to throw some positive thinking into the mix and hope it helps. :)

Joe

I do not mean to be a downer, but with all the the characters involved in this project and their track records, I will not believe it until I see the construction start.
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  • 2 weeks later...
fotoman311 Burg

fotoman311

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The city commission heard public comments for an amendment to the Brownfield Plan for this project. It was referred to the Committee of the Whole. (I assume that when this passes, it clears the way for Brownfield tax credits?)

It was stated that the project had a good reception from the downtown development authority.

It was commented that Mr. Bossardet (hope that I'm spelling that right) has his work cut out for him. The exact comment from Commissioner Gutowski was: "Better you than I." Gutowski also made the comment that often developers are portrayed as greedy b@stards, but that this is not always the case, as in this project where he implied that Mr. Bossardet will probably not make a huge profit.

Mr. Bossardet commented that one of the big challenges was to clarify all of the "grey areas" in the building codes pertaining to this building. To paraphrase "The building was built in 1880 and was not built for 2009 building codes." He stated that he had met with the code officers and felt they had been able to obtain positive outcomes and give him better guidance on what he needed to do to meet the codes.

The footprint of the building is approximate 3000 sq. ft. The intent is to have 3 apartments on each floor ranging from 750-850 sq ft each, depending on the floor plans they decide to use. There will be two retail bays on the bottom, each approximately 1100 sq ft.

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x99 Burg

x99

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I'm glad to see something happening here, as I hate walking past this eyesore on a weekly basis, but it's a mystery to me how the financials work on it. Like the comment above, the numbers just do NOT crunch at all. Figure $10/sf ground floor, which is generous, and you're at $24k a year. Add in $1200*12unit*12 months for the residential and the whole building can't possibly *gross* more than $200k per year, and that's assuming you could rent those units for far more than you probably could in reality. Either $4 million is overstated, the tax credits are huge, or this is going to lose money the first time a shovel goes into the ground and is dead in the water before it starts. If its a charitable donation to clean up my pet peeve, then so be it! :) This building as it stands is worth negative money, particularly when you consider that gorgeous ~3500sq ft useable floorplates with an easy residential conversion and beautiful view from all sides are available practically across the street for about 200k or less right now ... Stuff in this neighborhood isn't exactly valuable right now ...

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x99 Burg

x99

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This should not have come as much of a surprise to anyone. The only way even the lower $3.5 million could have been made to work would have required 1) making the building operate completely free of any operating expenses at all, which is impossible to do with apartments, and 2) locating an investor or bank willing to lend on a project described as a "gamble" and which had a probable rate of return lower than the interest rate on the note. Fat chance.

I could be off on my numbers that I posted a few months ago, but I don't think so. The only other way it works is huge, massive amounts of tax credits--enormous amounts. In the current environment, any sane lender/investor will want a 10% cap rate. In a best-case scenario, that leaves $1.5 million to be covered by tax credits, or more than half the project cost excluding acquisition costs. Granted, this is a really dumbed-down scenario, but in this market, it is probably somewhat realistic.

The disgusting thing is that the person who profits the most by sucking at the public trough is not the developer, but the person holding onto a building that, without tax giveaways, has zero economic value and is one of if not the most blighted buildings in the whole downtown area. The promise of a public handout makes it worth enough to him to hold onto it.

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Prankster Burg

Prankster

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This is too bad. I truly believe that if any developer could have put this together, Brice would have. The only hope now is that one of the big players in the area (Rockford Construction, CDW) takes this on as a charity case in order to continue the redevelopment of the area.

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joeDowntown Metropolis

joeDowntown

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I applaud Brice for trying. This building is tough, and even tougher as banks keep their wallet in their pocket. But as long as people like this keep pushing, GR will continue to be the gem of Michigan. It's a setback, but not a death sentence for the building...

Joe

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wingbert Burg

wingbert

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This should not have come as much of a surprise to anyone. The only way even the lower $3.5 million could have been made to work would have required 1) making the building operate completely free of any operating expenses at all, which is impossible to do with apartments, and 2) locating an investor or bank willing to lend on a project described as a "gamble" and which had a probable rate of return lower than the interest rate on the note. Fat chance.

I could be off on my numbers that I posted a few months ago, but I don't think so. The only other way it works is huge, massive amounts of tax credits--enormous amounts. In the current environment, any sane lender/investor will want a 10% cap rate. In a best-case scenario, that leaves $1.5 million to be covered by tax credits, or more than half the project cost excluding acquisition costs. Granted, this is a really dumbed-down scenario, but in this market, it is probably somewhat realistic.

The disgusting thing is that the person who profits the most by sucking at the public trough is not the developer, but the person holding onto a building that, without tax giveaways, has zero economic value and is one of if not the most blighted buildings in the whole downtown area. The promise of a public handout makes it worth enough to him to hold onto it.

Now I'm no expert on city government, but isn't there more the city could do to make it less fun for Azzar to hold onto this property? Penalties, assessments, etc.? Something to add to the cost of ownership. It seems that someone with some creativity could make a valid case for requiring better maintenance, etc. on the building. (It's not far from the Children's Museum and it is a habitat for vermin, etc. Our children are at risk!)

Put up a sign that's 3 inches too wide or set up a hot dog cart in the wrong place and the city is all over it with regulations and ordinances but leave a building to rot near a high profile corner and nobody can come up with anything? Seems wrong.

:dontknow:

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GRDadof3 Ecumenopolis

GRDadof3

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Now I'm no expert on city government, but isn't there more the city could do to make it less fun for Azzar to hold onto this property? Penalties, assessments, etc.? Something to add to the cost of ownership. It seems that someone with some creativity could make a valid case for requiring better maintenance, etc. on the building. (It's not far from the Children's Museum and it is a habitat for vermin, etc. Our children are at risk!)

Put up a sign that's 3 inches too wide or set up a hot dog cart in the wrong place and the city is all over it with regulations and ordinances but leave a building to rot near a high profile corner and nobody can come up with anything? Seems wrong.

:dontknow:

I agree. I think a "blight" ordinance should be adopted for downtown (maybe the DDA district?).

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Veloise City

Veloise

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Anyone can tag (in the Facebook sense) this property, and a pink Notice to Abate will quickly appear on the doorway. And a uniformed member of the Federal government will hand-deliver a copy of it to Mr Azzar.

Visit grcity.us, go to Find a Map, and then the Report a Problem link.

(about to turn in a couple more absentee neighbors)

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  • 2 weeks later...
x99 Burg

x99

Posted
Posted

Now I'm no expert on city government, but isn't there more the city could do to make it less fun for Azzar to hold onto this property? Penalties, assessments, etc.? Something to add to the cost of ownership. It seems that someone with some creativity could make a valid case for requiring better maintenance, etc. on the building. (It's not far from the Children's Museum and it is a habitat for vermin, etc. Our children are at risk!)

Put up a sign that's 3 inches too wide or set up a hot dog cart in the wrong place and the city is all over it with regulations and ordinances but leave a building to rot near a high profile corner and nobody can come up with anything? Seems wrong.

:dontknow:

One of my thoughts exactly, but I haven't investigated the idea enough to determine whether it would actually work in terms of being legally enforceable. It seems to make no sense at all to allow a building in the downtown area to sit around with boarded up windows and a roped off public sidewalk in front of it. If the City could penalize land owners within a defined geographical area from utilizing boards for windows, it seems like they would have taken the initiative by now. For example, an ordinance disallowing street-facing facades from utilizing either bricks or boards in place of windows--or penalizing those that do--seems to make perfect sense in terms of maintaining a aesthetically appropriate cityscape, but yet no ordinance seems to exist, and buildings such as this soldier on ... Perhaps the city attorney's office needs to put its thinking cap on.

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