SBP_Blog_1

Aging Grand Rapids Building Would Be Transformed into Low-Income Housing, City Plans Show

GRAND RAPIDS, MI — A developer is seeking to renovate and add low-income housing at a two-story building, containing a ground floor U.S. Postal Service store, near the intersection of Burton Street and Eastern Avenue on Grand Rapids’ Southeast Side.

The $2.9 million project, being led by building owner Timothy Yalda and Grand Rapids-based Pinnacle Construction Group, would create 16 apartments reserved for low- to moderate-income residents at 2017 Eastern Ave. SE. Estimated monthly rental rates would range from $875 to $1,125, city documents show.

“We anticipate there to be a lot of demand at this price point for housing at this location,” said James Lewis, development director at Pinnacle Construction Group. “We’re not expecting a long lease-up period.”

Apartments in the building, which include a mix of studio and one-bedroom units, would be reserved for residents earning between 60% and 80% of Kent County’s area median income, Lewis said.

For a two-person household, 60% of the county’s area median income translates to an annual income of $42,960. For the same size household, 80% of the county’s area median income equates to $57,280.

Jeremiah Gracia, the city’s economic development director, said the city administration supports the project, which is seeking city incentives.

The project is located in the city’s First Ward, and near the border of the Third Ward, which encompasses a stretch of Grand Rapids’ Southeast Side that is home to a majority of the city’s Black population. Historically, the Third Ward has not seen the same level of investment as downtown Grand Rapids and other growing neighborhoods in the city. The project is also seeking LEED certification, a designation that promotes sustainable, energy-efficient practices in the building industry. The building was originally constructed in the 1950s.

With a $2.9 million price tag, the owner of the building is asking the city to provide a 12-year Obsolete Property Rehabilitation Exemption Certificate. The certificate, which must be approved by the city commission, would reduce the project’s taxes by an estimated $470,000 over 12 years, Lewis said.

In addition, the project is also, through the city, seeking about $1 million in funding from the Michigan Economic Development Corporation’s Revitalization and Placemaking Program. The MEDC program is awarding $100 million in federal COVID-19 stimulus funds to real estate and infrastructure projects.

Lewis said the MEDC RAP funding is necessary to make the project happen.

“If the project doesn’t get the RAP grant financing, it’s not a viable project anymore,” he said. The city is expected to find out this summer how much RAP grant funding it will receive, Lewis said.

Recently, the project also got a boost from the city’s Southtown Corridor Improvement Authority. The authority agreed to provide the developer with a $10,000 grant for exterior improvements including new canopies, doors and windows, and storefront glazing, according to the city.

If all goes according to plan, and if the necessary funding is received, construction on the rehabilitation project could start in the late first-quarter or early second-quarter of 2023, Lewis said. Construction is expected to take nine months. The post office would remain open during that period and will remain a tenant once the apartments are complete, Lewis said.

Lewis said creating a sustainable, energy-efficient building is a big focus of the project.

The building will be heated using electric air source heat pumps, which are more efficient than traditional electric heating methods. In addition, builders will add “just a ton” of extra insulation to the outside of the building, which will create a more stable indoor temperature, Lewis said.

Finally, officials plan to install “a massive solar array” on the roof.

“We’re hoping to get fairly close to net zero, which means we’re making as much energy as the building’s using over the course of the year,” Lewis said.