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'Not a good deal for Grand Rapids': Community advocates urge City to reject Three Towers proposal

Community advocates and housing leaders urge the Grand Rapids City Commission to reject a proposed $797M development by DeVos-Van Andel-linked Fulmar Property Holdings, citing insufficient affordable housing commitments relative to public subsidy requested.
Together West Michigan coalition gathers at Calder Plaza to oppose tax subsidies for the Three Towers development.

Together West Michigan coalition gathers at Calder Plaza to oppose tax subsidies for the Three Towers development. /Allison Donahue

Traditional vs. Transformational Brownfield Plans

Traditional Brownfield Plans
Traditional Brownfield Plans are designed to support redevelopment on contaminated, obsolete or blighted sites. They help cover costs related to site preparation, including demolition, environmental assessments, remediation and necessary infrastructure improvements. These projects can leverage Tax Increment Financing (TIF) to capture incremental property tax revenue for up to 30 years to fund the cleanup and preparation.

Transformational Brownfield Plans (TBP)
Transformational Brownfield Plans are meant for larger-scale projects with a significant economic and community impact, beyond traditional redevelopment. TBPs require a minimum project size of $100 million and must meet the same baseline requirements as traditional Brownfields, such as contamination or obsolescence, but they are intended to bring broader community revitalization. In addition to covering standard redevelopment costs, TBPs also allow funding for construction, restoration, alteration, renovation and other site and building improvements.

-- Key Differences --

Scope & scale: TBPs require a minimum $100 million investment and must have a transformative impact, while traditional Brownfields have no minimum project size.

Funding coverage: Both plans cover demolition and site preparation, but TBPs extend to construction and site improvements.

Tax capture: Traditional Brownfields capture incremental property taxes, while TBPs also capture Construction Labor State Income Tax, Permanent Employee State Income Tax and Permanent Resident State Income Tax for up to 20 years.

Graphs display Grand Rapids housing shortage and TWM's stance on the Three Towers project subsidy

Graphs display Grand Rapids housing shortage and TWM's stance on the Three Towers project subsidy /Allison Donahue

Together West Michigan (TWM), a coalition of local community groups amplifying resident voices, held a press conference Tuesday ahead of a City Commission meeting to voice their opposition to a potential DeVos-Van Andel development downtown. 

Fulmar Property Holdings, a company comprising DeVos and Van Andel family members, has proposed the “Three Towers” project to replace the former Charley’s Crab restaurant and adjacent parking lot at Fulton Street and Market Avenue. The development plan includes three high-rise towers featuring over 650 high-end apartments and condos, a hotel, offices and retail spaces.

Community leaders and housing advocates argue the developers' proposed public investment falls short relative to the tax subsidies they are requesting from the City.

The $797 million project seeks a Transformational Brownfield Plan (TBP) tax subsidy of  $565 million to reimburse 71% of the project costs. That tax revenue would be provided to Fulmar Property Holdings over 30 years once the project is built and generates tax revenue if the City Commission approves the proposal. 

The Transformational Brownfield Plan (TBP) is a Michigan state incentive program designed to support large-scale redevelopment projects on contaminated, blighted or obsolete sites by offering tax reimbursements to offset cleanup and development costs.

Transformational Brownfield Plan policy requires developers to include an affordable housing component in the project. In exchange for the subsidy, Fulmar Property Holdings offered in their proposal an $8.5 million contribution to the Grand Rapids Affordable Housing Fund (GRAFH) over 20 years, equating to 425,000 a year. 

“That’s not a good deal for Grand Rapids,” said Rev. Lynette Sparks, a TWM leader, during the press conference outside City Hall. “It’s not a good deal for Grand Rapids families.”

Housing advocates argue that projects of this scale should include broader community input, though there are currently no criteria for a public engagement process for this type of project. 

TWM is proposing the developers invest 20% of the requested $565 million reimbursement to the GRAHF “no strings attached,” with half of the affordable housing investment deposited at the project’s outset and the remainder distributed in equal annual increments. 

TWM also asks that the City Commission increase transparency, to see the math behind the $8.5 million contribution calculation and to be involved in creating a structured process for future developments of this size. 

The City Commission is set to vote on the TBP and Affordable Housing Agreement at a Dec. 3 meeting. However, TWM requested the Dec. 3 vote be delayed to allow more community involvement and negotiation. 

Approval is also required from the Michigan Strategic Fund, the Michigan Economic Development Corporation (MEDC) public fund arm, which is expected to be taken up during a February 2025 meeting. The Brownfield Authority will likely consider approving the reimbursement and development agreement in the spring. Construction is planned to begin in fall 2025, with an estimated completion by summer 2029.

Brad Thomas, President and CEO of Progressive Companies, the architecture and design firm involved in this project, presented to the City Commission Tuesday afternoon during a public hearing on the project and outlined the “significant community benefits.”

Over 30% of the property would be dedicated to open and public space and “completely redefines the river’s edge, creating access to the water,” said Thomas.

Progressive Companies is also the firm designing the upcoming Acrisure Amphitheater, located near the Three Towers project on Market Avenue, as well as a planned soccer stadium on the west side near the river's edge.

Joe Agostinelli, the founder of Michigan Growth Advisors, Miller Johnson’s economic development consulting subsidiary, which has been leading the financial and Brownfield planning on this project, also addressed the commission during the public hearing.

 “Projects like this truly are not feasible without an incentive tool like the TBP program,” Agostinelli said, noting the cost of developing the contaminated site, a parking structure and the cost premiums of building heavy steel high-rise construction. “The reason the incentive request for this project is so large is because the vision of this project itself is large. We view this as an incredible opportunity to add density to the downtown.”

Agostinelli said the developers will be unable to go forward with the project if required to meet the higher affordable housing contributions TWM advocates.

“I think you’re about to hear from many members of the public who believe the project’s proposed contribution to the affordable housing fund should be exponentially larger. Those comments, while I truly believe are well-intended comments, are not based in an understanding of the economic realities of this project,” said Agostinelli. His remarks drew groans from the packed audience, who were gaveled down by Mayor Rosalynn Bliss.* 

“The proposed contribution to the affordable housing fund is what the project can support,” Agostonelli said

Following the presentations, dozens of Grand Rapidians made public comments, mainly opposing the development, raising concerns over affordable housing, environmental impacts and a perceived lack of transparency in the approval process. According to the meeting agenda packet, 89 communications opposing the project proposal were submitted ahead of the meeting. 

NOTE: Detailed notes and an audio recording from the Documenter covering the Nov. 12 meeting are coming soon; the story will be updated with a link.

 

Updated, 12:54 p.m., 11/13/2024, spelling correction.

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