GRAND RAPIDS — Wheeler Development Group’s proposed mixed-use tower could help the city accomplish several goals for the downtown area.
The city of Grand Rapids has given the developer a one-year option on the wedge-shaped property at the northwest corner of Fulton Street and Ionia Avenue. The move came after the city issued a request for proposals from developers for the site.
Wheeler Development proposed a $55 million, 24-story tower that includes ground-floor retail, parking, office space, apartments and condominiums in the 310,000-square-foot building.
“Down in this general area, we’ve been working hard on creating mixed-use developments that have housing components and office and ground-floor retail and restaurants,” said John Wheeler, CEO at Wheeler Development. “This fit right in our wheelhouse of growing our residential portfolio.”
Wheeler Development, as well as the affiliated Pure Real Estate Management, will locate its offices at the new building, and is in talks with other companies to move their headquarters there, Wheeler said.
That mirrors the city’s goals for the site, which included increasing residential density and providing more parking options for downtown. The proposed development would connect with the city-owned Fulton/Ottawa parking ramp.
“It’s a property we identified that could help us meet a lot of the objectives we’re trying to achieve downtown: expansion of parking, ground-floor activation and additional residential and employment opportunities,” said Jono Klooster, acting economic development director for the city.
The site also provides more vertical infill in downtown Grand Rapids, where space for new developments is increasingly limited.
The new tower could serve as a catalyst for getting more height density in the Grand Rapids skyline, said Tim Kelly, president and CEO of Downtown Grand Rapids Inc.
“You see that in most cities: As the land opportunities become more scarce, you have to go taller,” he said. “We have some height downtown, but we haven’t really seen a lot of infill projects that provide this type of density. It’s important to demonstrate for the market and to people who are thinking about investing that this is something we can support and accommodate.”
Wheeler Development’s building would be the fourth-tallest building in Grand Rapids at 280 feet, behind the River House condo building, Plaza Towers and the Amway Grand Plaza Hotel.
Having more density and “verticality” downtown is something officials have long discussed especially as the availability of sites to build new developments becomes more of a challenge, Kelly said.
The city also hopes the vertical infill will continue, Klooster said.
“We’re not making any more land downtown,” he said. “There are some more properties downtown that could be developed, but because it’s limited, we want to take every opportunity that we can with what we make available or that comes available.”
Previously, Grand Rapids-based CWD Real Estate Investestment had a three-year option to purchase the same property Wheeler Development is considering for its project. CWD had proposed an 8-story mixed-use building at the site, but those plans never came to fruition.
Although negotiations are still in early stages, Wheeler Development has fielded “more than several” calls from parties interested in the retail, restaurant and office space included in the proposed development.
“We’ve got many, many leads,” Wheeler said.
While citing new downtown office developments like the recently-opened Warner Building and the new Acrisure LLC headquarters that’s under construction at Studio Park, DGRI’s Kelly believes demand exists for more office space.
In 2019, office vacancy remained below 10 percent for the first time in 30 years in the West Michigan market, according to data from the West Michigan office of Colliers International. Colliers expects the 8.14 percent vacancy rate to continue to decrease.
“We’re seeing more office proposals coming along,” Kelly said. “I think the Acrisure announcement has been important for downtown.”
The same is true for multifamily development, he said, adding that the strong occupancy rate for that segment also serves as a signal for further demand.
“Investors think there are opportunities to provide more products, which is good as we think about reaching our critical mass goals,” Kelly said. “We’re excited to see more projects come online.”