GRAND RAPIDS — Property once planned for a high-end residential project is now slated to be redeveloped into 52 affordable apartments in the city’s Belknap Lookout neighborhood.
Engineers-turned-developers Tom Ralston and Nick Lovelace, in partnership with nonprofit housing organization Dwelling Place, are leading the development planned at 608-626 Coit Ave. NE. Doing business as Union Suites LLC, Lovelace purchased five properties — including three to the north of the planned project — on Jan. 12, 2021 for $1.85 million from Artesian Group LLC.
Site plans call for the demolition of rental properties to make way for a three-story apartment building that will contain a mix of one-, two- and three-bedroom units. The apartments will have a range of affordability, including for households earning 10 to 20 percent of the area median income that apply through a voucher program.
The Union Suites on Coit project is also part of a growing movement to stem rapidly increasing rents in high-traffic and dense areas of the city. The Belknap Lookout neighborhood is located between the city’s Medical Mile and Leonard Street, and between the Grand River and College Avenue.
“We’re trying to stop gentrification in an area going through a lot of redevelopment right now, but most of that has been higher-end residential projects,” Lovelace told MiBiz.
The affordability component will be made possible after the project received $1.1 million in Low Income Housing Tax Credits (LIHTC) through the Michigan State Housing Development Authority. The developers also plan to dedicate eight units to tenants who use the Project Based Voucher program, a federally funded program that provides rental assistance to low-income families, Lovelace said.
The team’s plan has been welcome news for neighborhood advocates.
“We are eager to see construction on this block,” said Neighbors of Belknap Lookout Executive Director Elianna Bootzin. “It has been a deteriorating rental block. This is the third design that has been approved. I think there is the opportunity for these lower-cost units to be available for folks that are being priced out of the neighborhood, and we do see that happening over and over again.”
The total project cost is expected to be $12.2 million. Lott3Metz Architecture LLC is designing the project while Orion Construction will serve as the general contractor. Construction is expected to start in April or May.
The Grand Rapids City Commission is set to consider a brownfield plan amendment for the project at its Feb. 22 meeting. The total cost of brownfield eligible activities is estimated at $621,840, according to documents filed with the city.
“We’re not looking to get rich from a LIHTC housing development — that’s why we came on with a nonprofit,” Lovelace said. “Our aim is to provide more affordable housing for the area.”
Lovelace was also part of the development team that converted a vacant church in the city’s Heritage Hill neighborhood into 22 affordable units at 200 Madison Ave. SE. The project was completed last year and was fully leased in November.
“There is a huge demand for housing, especially in the Grand Rapids area and especially for affordable housing,” Lovelace said.
Redeveloping Belknap Lookout
The Neighbors of Belknap Lookout was incorporated in 1980 to respond to increasing blight in the neighborhood that residents wanted to revitalize, Bootzin said. The neighborhood association’s goal now is to also attract businesses and affordable housing developments to the area, Bootzin added.
“We are seeing residents being priced out of the neighborhood,” Bootzin said. “We have some learning to do on what all of our options are for offering affordable housing.”
Some strategies the group has identified include educating landowners about the community land trust model, which seeks homeownership opportunities for low- to medium-income residents through discounted home prices from a designated nonprofit that owns the property. The neighborhood group hopes to see at least one property in the neighborhood use the model to offer long-term affordability, Bootzin said.
“We would also like to encourage our rental owners when they are ready to stop owning to consider selling their home to their tenants,” she said.
After a four-year effort, another affordable housing project started construction last year when LIHTC funding was awarded to the Belknap Place project at 310 Trowbridge St. NE. The 50-unit apartment project aims to provide affordable housing to a range of household incomes. Belknap Place is expected to be completed by September 2022.
While developers undertake risk for any housing project, affordable housing projects can be even more difficult. The Union Suites developers bought the five properties and risked the chance that the LIHTC financing might not be awarded, Lovelace said. The lack of available land in the greater Grand Rapids area, high construction costs and the competitive LIHTC application process are all factors that the developers had to consider.
“Probably one of the biggest challenges is the increased construction prices,” Lovelace said. “With LIHTC deals, there isn’t a lot of room for extra costs, so you have to reach out wherever you can and it’s tough to balance it all out and still provide affordable units.”
The scoring used for the recent LIHTC rounds has emphasized walkability of project sites in relation to community services such as grocery stores, parks and employers. This was also a factor in choosing Belknap Lookout for the project, Lovelace said.
“It’s very tough to find land that is appropriate and reasonably priced for the build, and that is in a great neighborhood that is within walking distance to the right things,” Lovelace said. “You can always find land to buy, but you don’t want to put all of the affordable housing developments on the outskirts of town. That’s not the purpose of our mission.”
EDITOR’S NOTE: This story has been corrected to say that Union Suites LLC purchased five projects at and near the proposed housing development for $1.85 million.