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By Karen Gentry | TransActions
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GRAND RAPIDS – Spurred by medical development on Michigan Street in the past five years, area realtors, city planners and developers expect further retail, medical and office development by the middle of the decade on the busy corridor.

Dave Denton, VP of Colliers International, said Michigan Street went through a transitional period before being revitalized with numerous medical developments including the Lemmen Holton Cancer Center, Fred and Lena Meijer Heart Center, Helen DeVos Children’s Hospital, the Michigan State University College of Human Medicine Secchia Center and Van Andel Institute.

More interest in retail and other development started about two years ago when a couple of properties changed hands. Denton said the new 30,000-square-foot Rylee’s Ace Hardware near the corner of Michigan Street and Fuller Avenue is one of the most positive retail developments.

“It proves the strength of the demographics of that particular neighborhood. They recently opened and business is booming at the new location,” Denton told TransActions.

He said Colliers has negotiated a lease with a yet unnamed national retailer at the former 12,700-square-foot Rylee’s location west of Fuller Avenue, and a new restaurant will open next to Duke’s Bar & Restaurant in the 600 block of Michigan Street.

Grand Rapids Planning Director Suzanne Schulz said the loss of retail at Michigan Street and Lafayette Avenue accentuated the importance of the Fulton Heights and Midtown neighborhoods and the need for more retail. She said the new Rylee’s makes a great statement about the viability of that area.

Michigan Street near Fuller Avenue is attracting a high level of interest from national retailers and will continue to be on their radar, particularly if the planned grocery store in the former Duthler’s store building takes place. Spartan Stores announced plans to build a D&W store there, although the company recently announced it would abandon those plans becaue of the economic uncertainty.

Schulz will recommend that the city conduct a full build-out analysis and traffic impact study for Michigan Street, a project that will involve the many stakeholders. She stressed the importance of a balance between neighborhood services and the expansion of Spectrum Health and other institutions.
“I am concerned about the loss of neighborhood services that once supported the Belknap and Heritage Hill neighborhoods,” Schulz told TransActions. “As we see continued growth of medical facilities and support facilities for the life sciences on Michigan Street, I worry that what has vanished near Michigan and Lafayette could happen to Michigan and Fuller.”

Denton noted that there’s currently a lack of retail and restaurants in the Michigan/Fuller area and said the Subway restaurant on that corner has the highest sales in the region. The area has attractive demographics from a residential standpoint and a good daytime population of workers – more than 30,000 cars travel the corridor every day, with even more expected during with the seasonal closing of I-196. He said there is not a lot of new or newer space available on Michigan Street and not many good options for retail.

“There are some older buildings that need to be redeveloped into more traditional retail strip centers so you can get more food and service retailers to come into the market,” Denton said.

One high profile project on Michigan Street is the Mid Towne Village, a mixed used urban redevelopment on six acres on Michigan Street near College Avenue. Brad Rosely, principal with Third Coast Development Partners LLC, said the project – a mix of medical, regular office space, residential and retail – has been extremely successful. The development includes the Omelette Shoppe restaurant and El Barrio Mexican Grill, a new Mexican restaurant. Rosely said Mid Towne Village includes six lots, three of which will be developed when developers find more tenants.

More medical development on Michigan Street continues with two new office towers. In mid-April The Christman Company was topping out the structural steel on the second medical office development dubbed “Tower 35,” on Michigan Street across from Spectrum Health Butterworth Hospital.

Brian Crissman, project executive for The Christman Company, said the second office building will be completed in summer 2011 with most of the seven floors to be occupied by Spectrum Health. Construction on the twin “Tower 25” is complete and about three quarters full of mostly medical tenants.

The Christman Company is also finishing the last 1,000 spaces of the parking deck that will include a total of 2,500 spaces owned by several entities.
Crissman is personally proud to be a part of the development on Michigan Street.

“It’s been a great project for everybody and for Grand Rapids, especially with times like these,” Crissman said.

Further office development on Michigan Street is likely five to seven years out, according to Chip Bowling, downtown office advisor for Colliers.
“There’s future potential for office space up and down the Michigan corridor. I think what will happen is that (office) will be the last product we see coming into that area,” Bowling told TransActions.

Following more retail, bars and restaurants, Bowling envisions small boutique office buildings filling in the remaining vacant parcels to complete the Michigan Street development.

Bowling said all the medical development has spurred interest in offices in the downtown area. He said the office market in downtown Grand Rapids has bottomed out with tenants starting to consider locking in rental rates on five, seven and 10-year leases. Office vacancy rates are hovering around 19 percent with a 10 percent vacancy rate considered healthy.

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TAGS:

• brad rosely
• brian crissman
• chip bowling
• christman company
• colliers international
• commercial real estate
• dave denton
• grand rapids
• michigan street
• suzanne schulz