Incentives for $52 million Studio Park apartment building set to be presented to Grand Rapids City Commission
GRAND RAPIDS, MI — An application for a 12-year tax reduction for a $52 million high-rise apartment building project at Studio Park in downtown Grand Rapids is set to go to the Commission on the city of Grand Rapids on Tuesday, April 26.
Jackson Entertainment, a limited company set up by the owners of Studio Park, is seeking a 12-year Neighborhood Enterprise Zone designation for the 16-story building, which is expected to contain 165 market-priced apartments and 24 at 30 condominiums.
The Neighborhood Enterprise Zone designation would reduce the developer’s tax bill by more than $2.3 million over 12 years, said Jono Klooster, assistant director of economic development for the city of Grand Rapids.
“Particularly in the cost environment we are currently experiencing, this is an important element to help bring this project to fruition,” he said.
Studio Park, 123 Ionia Ave. SW, was opened in October 2019 by the Loeks family, who founded Celebration Cinema. The development includes a nine-screen theatre, 106 apartments, a 200-seat music and entertainment venue, a 155-room hotel, a seven-story office building, as well as retail and restaurants.
The new apartment tower is expected to be built on top of the development’s six-storey car park. This would bring the building’s overall height to 22 stories, making it a prominent feature in the Grand Rapids skyline.
The 165 apartments, a mix of bachelor, one-bedroom and two-bedroom units, are expected to cost between $1,549 and $2,870, according to city documents.
Emily Loeks, spokeswoman for Studio C, the company that owns Studio Park and Celebration Cinema, said she anticipates strong demand for the new apartments.
“I think the demand and the need for really good housing and great housing downtown has never been higher,” Loeks said. “People love the experience of being downtown. The edge of the river. The restaurants. Entertainment.”
She added, “The Studio Park Tower is going to support that and bring it to a whole new level.”
Loeks wasn’t immediately sure about the price of the condominiums.
Construction of the new tower could begin in June, Loeks said. The car park will remain open during the works.
In addition to the approximately $2.3 million tax cut, Jackson Entertainment is seeking changes to its brownfields redevelopment plan.
The original plan, approved in 2017, agreed to reimburse Jackson Entertainment $22.9 million over a 30-year period for eligible expenses incurred during the development of Studio Park. Eligible expenses include demolition, lead and asbestos abatement, site preparation and public infrastructure improvements.
Tuesday’s city commission meeting will include a request from Jackson Entertainment to be reimbursed for those expenses over 20 years instead of 30 years.
“The time value of money translates into an advantage for them,” Klooster said. “If I offer you a dollar today or a dollar in 20 years, you will take the dollar today.”
While apartments in the new tower have relatively high monthly rental rates, ranging from $1,594 to $2,870, city officials say there is a demand for such units downtown.
Klooster pointed to a 2020 housing need study, conducted for the city of Grand Rapids, which showed there is demand for 1,469 new apartments priced at people who earn between 80% and 120% of median income. of Kent County.
In addition, there is a demand for 979 new apartments for people earning more than 120% of the median income in the Kent County area, according to the study.
For a two-person household, 120% of the Kent County area median income translates to an annual income of $85,920. The income ranges for the 165 units in the proposed tower range from 120% of Kent County Area Median Income to 150% of Kent County Area Median Income.
“This addresses the housing needs that were identified in the Housing Needs and Opportunity Assessment,” Klooster said. “It offers both rental housing and home ownership opportunities, which is a unique aspect that we don’t always see in a single project.”
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