Sleek new $1.8M building rises from ashes where Grand Rapids Bicycle Factory once stood

By: Deborah Johnson Wood

In February last year the historic Grand Rapids Bicycle Factory succumbed to fire, just three weeks after crews began renovations. Now a sleek structure occupies the property, and already commercial and residential tenants call it home.

The new five-story structure at Front and Butterworth offers three floors of commercial and office space. Above, a dozen 950-square-foot apartments each have two levels and a rooftop deck overlooking the city.

Key Sales and Systems occupies most of the main level. Grand Valley State University's Johnson Center for Philanthropy, Charter Schools and Pew Campus Operations occupy the second and third floors. Residential tenants have signed on for six of the apartments and began moving in this week.

The developers—Paul McGraw, Ken Grashuis, Parker Keane, Jeff Korte, and Louis Padnos Metals—invested some $1.8 million in the building. GVSU invested another $2.6 million in the buildout of its space.

"Building new was requiring so much in, with very little back, that we had to keep growing the building to get the money to make sense," McGraw says. "But GVSU and Key Impact stepped forward with offers to be our tenants and that helped us put it all together."

To lauch the project, developers proposed a complex marriage of federal and state historic tax credits, brownfield credits, a new market tax credit and a parking lease with GVSU. The new structure retained the brownfield and new market credits, losing only the historic credits.

"Returns on apartments are low, and downtown, the returns are negative unless the apartments are in huge buildings to make the numbers work," McGraw says. "In some instances it would take 20 years to break even. The tax credits put you on par with the properties in the suburbs, which are less expensive to develop."

McGraw expects the building will earn LEED Core and Shell certification.

Source: Paul McGraw, McGraw Construction; Scott Whisler, Grand Valley State University

Deborah Johnson Wood is development news editor for Rapid Growth Media. She can be contacted at [email protected].