Activists want big increase to ‘unacceptably small’ housing contribution for DeVos, Van Andel project

GRAND RAPIDS, MI — Community activist group Together West Michigan wants the Grand Rapids City Commission to require a firm that's seeking a $565 million subsidy for a $738 million riverfront development to make a bigger payment to the city's affordable housing fund.

Project developer Fulmar Property Holdings has proposed an $8.5 million contribution to the affordable housing fund for the project, which would bring 671 high-end housing units, a hotel and office tower to a seven-acre site at Fulton Street and Market Avenue SW.

But, during a press conference prior to Tuesday's city commission meeting, leaders of Together West Michigan asked for the affordable housing contribution to be increased to $113 million.

"We are confident that a stronger agreement can be negotiated that creates greater public benefit in return for public investment," said Peter TeWinkle, a pastor at Oakdale Park Church in Grand Rapids and a member of Together West Michigan. "We are ready to come to the table and work with others to make that happen."

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Tuesday's city commission meeting was a public hearing on the Fulton and Market project, and no vote was taken on the subsidy request. While not all members addressed Together West Michigan's demands, some commissioners were supportive and others were opposed.

"I do think what the community brought up, their concerns, is extremely valid, and I do think that there's an opportunity to give back more than one percent of the total subsidy back to the community," said Third Ward Commissioner Kelsey Perdue.

She said that could include raising the affordable housing subsidy.

However, Perdue stressed it also could include ensuring greater participation by local- and minority-owned contractors during construction, and ensuring that small businesses have a chance to participate in the project in some fashion once the development opens.

"The diverse vendor usage for the construction is low," she said.

About 4% of the project's construction and professional services costs are expected to be covered by local, minority and female-owned businesses, though city staff said during Tuesday's meeting that the total could come in higher than that.

The project is being proposed by Fulmar Property Holdings, a company comprised of members of the DeVos and Van Andel families. Together, they own the 500-space parking lot at the corner of Fulton Street and Market Avenue, just north of Acrisure Amphitheater, where the project would be built.

More than a hundred members of Together West Michigan appeared at the press conference, and many of them spoke out against the project during Tuesday's hours long public hearing. Some speakers also questioned why the city is considering subsidizing a project being proposed by two of West Michigan's wealthiest families.

"Together West Michigan does not oppose private development," said Rev. Lynette Sparks, a senior pastor at Westminster Presbyterian Church. "What we do oppose is the unacceptably small affordable housing contribution being proposed."

Representatives of Fulmar Property Holding's say Together West Michigan's request to increase the affordable housing contribution from $8.5 million to $113 million is not doable.

"If that were to be attached to the project, it would make the project no longer viable," said Joe Agostinelli, the founder of Michigan Growth Advisors, an economic development incentive consulting firm that's working with Fulmar Property Holdings on the project.

While many were opposed Tuesday, the Fulton-Market project has buy-in from many of the major public and private organizations working to boost downtown development and make the city a more attractive place for new residents and businesses. The project is part of a wave of investment that includes Acrisure Amphitheater, the proposed Grand Rapids Soccer Stadium, and the Grand River Greenway trail system.

Representatives of Downtown Grand Rapids Inc., the Grand Rapids Chamber, The Right Place, Rockford Construction and the Grand Rapids-Kent County Convention Arena Authority spoke in favor of the project.

"We're talking about taking a surface parking lot that's closed to the public and transforming it into retail, office, hotels, apartments and condos," said Josh Lunger, vice president of government affairs at the Grand Rapids Chamber.

Fulmar Property Holdings is seeking the subsidy through the state and local Transformational Brownfield program. Fulmar's request must be approved by the Grand Rapids City Commission and the Michigan Strategic Fund, the public funding arm of the Michigan Economic Development Corporation.

The program's subsidy is not an upfront cash handout to the developer.

Rather it provides Fulmar Property Holdings with a host of state and local taxes, generated because of the development, over a 30-year period. If the development doesn't occur and no tax revenue is generated, no payments are made to the developer.

About four-fifths of the proposed $565 million subsidy comes from taxes that would ordinarily go to the state of Michigan, Grand Rapids Economic Development Director Sarah Rainero previously said. The remainder is from taxes that would go to the city.

Grand Rapids First Ward Commissioner Jon O'Connor said he does not support Together West Michigan's request for a bigger affordable housing contribution.

"Every property cannot solve every problem," he said, an apparent reference to concerns that the development doesn't include any on-site affordable housing.

However, he added there are other benefits, including adding more market-rate housing, which the city also needs, and generating additional income taxes for the city.

"Even if we got a bigger chunk of money to the affordable housing fund, that's a point in time dollar figure — that doesn't solve the problem," O'Connor said.

The city of Grand Rapids collects a 1.5% income tax on residents and 0.75% on nonresidents.

The development is expected to include a 21-story office tower employing an estimated 1,725 people. The name of the employer expected to fill the building hasn't been made public. But if the employer isn't already based in Grand Rapids, the tower would bring new income tax revenue to the city.

Third Ward Commissioner Bing Goei said he hasn't decided where he stands on Together West Michigan's request. He said the Fulton-Market project is a "good project," and that "we need these kinds of projects."

"But we also need to address the critical housing needs that we have in the city, and we must use every tool available to us to find some solution to that need as well," he said. "At this point, I'm not ready to make any kind of decision on this."

Grand Rapids Mayor Rosalynn Bliss has expressed support for the Fulton-Market project in the past. But she did not weigh in on Together West Michigan's request during the meeting, and she couldn't immediately be reached for comment afterwards.

The Grand Rapids City Commission is expected to vote on the $565 million Transformational Brownfield subsidy on Dec. 3. If approved, the request is then expected to go before the Michigan Strategic Fund board for approval in February.