A second proposal by the A.J. Veneklasen Co. for a four-story mixed retail and residential building on the former Moose Lodge property at 128 N. Michigan Ave. won favor with the Hastings City Council Monday evening. [Image provided]
With two options open, the Hastings City Council parked its vote for new downtown housing Monday night behind a Grand Rapids builder-developer’s plan to construct a 30-unit, four-story structure on the former Moose Lodge property at 128 N. Michigan Ave.
On a 6-2 vote, the council approved the proposal by A.J. Veneklasen Inc. to purchase the property for $200,000 and construct a building that will include first-floor retail space, three floors of one-, two- and three-bedroom market rate-priced apartments and a 30-car parking garage on the ground floor. Total project value is listed at $6.1 which also will include a proposed arrangement to purchase or lease an additional 18 adjacent parking spots from the city.
Parking proved to be the defining difference between the Veneklasen plan and a proposal submitted by a development team led by Kevin Moore, representing Hudsonville developer Nate Heyboer, owner of DHE Plumbing and Mechanical. The Heyboer plan, dubbed Kendall Place, called for a three-story structure consisting of 41 residential units, 32 of which would offer housing rental rates based on the average median income of Barry County.
Other than four parking spaces to be made available to access-challenged residents, the Kendall Place plan proposed a long-term lease for 30 spaces at the city’s Parking Lot No. 3, at 110 E. Mill St. According to developers, those spaces, combined with surrounding public parking lots and on-street parking, would be sufficient for residents and their guests.
Those assurances, however, were not sufficient for several council members who pressed both presenters for details during a 45-minute workshop that preceded Monday’s regular council meeting where the final vote was taken.
Council member Brenda McNabb-Stange questioned the Kendall Place proposal’s calculation that residents of its 22 lower-rent units would require only nine cars, based on its management experience that the majority of households at or below 50 percent of an area’s median income average only 0.4 cars per household.
“How do you propose that those people without cars get to work?” McNabb-Stange asked, noting that the downtown economy within walking distance could not support enough jobs for all residents. “And what size community are you basing those numbers on – Grand Rapids where there are buses, taxis and all sorts of transportation options or Hastings where transportation is limited?”
Responding to a suggestion from Kara Harrison Gates of Colliers Intl., the development team’s tax credit and development specialist, that the Kendall Place group would promote public transportation such as Dial-A-Ride for residents without cars, council member Don Bowers provided his own numbers.
“Very few people in Hastings are a one-car [household], let alone 0.4,” Bowers said, noting that with Dial-A-Ride, “you have to call to get a ride and they could be late and how would that work with a job?”
Council member Jim Cary said his concern dealt with the possible safety issue of locating parking across the street from a residence.
“You may have young couples with kids, and what if they run into the street?” Cary asked.
“I can’t comment on people’s parenting, but possibly we could work with the city on a street crossing plan or a flashing light,” Harrison-Gates replied before re-directing discussion to the benefit of the Kendall Place plan in getting more people downtown and the residual benefits of a “catalytic” project that could spur further development.
“Rural communities benefit from projects like this one in three ways,” Harrison-Gates said. “There’s the immediate benefit that comes from construction spending, the financial benefits of the ongoing operations [of the facility] and the financial benefits of what renters spend in the community. Roughly 70 percent of what renters spend stays within the community.”
When asked by Cary about interest in another location if their proposed projects were not approved Monday, both presenters indicated the value of the property under consideration.
“That would be a little challenging for us,” Chris Veneklasen, company president, conceded, “because the biggest factor here is the mixed use [between retail and residential]. Another location might be good for residential, but not for retail. Somewhere else might be good for retail, but not residential.”
Stating that “Hastings could use both” proposals, Heyboer reasoned that the 128 Michigan Ave. location is the only one his development group has found that could garner the points needed in the complicated scoring system used by the Michigan State Housing Development Authority for the awarding of funds for affordable housing construction.
“Our plan is based on that points system, and we might lose three or four points by going to another location,” Heyboer said. “We’ve turned over all the rocks. Our project just doesn’t fit any other spot.”
“I’ve looked at all aspects, and I’m in for the long game,” Moore, from the Kendall Place team, summarized. “We’ve worked hard to find an investor here who understands the value of smalltown opportunities. Yes, we do want to do some things here, but it’s difficult to find an investor who wants to come to a small town.”
Calling the council’s decision a watershed moment, Moore added that “anyplace will have parking issues. Either you have conventional parking and no foot traffic or you have foot traffic and no parking.”
McNabb-Stange pointed out a distinction, based on that comment.
“There’s a big difference between having a parking problem occur and doing something that creates a parking problem,” McNabb-Stange said. “[Parking spaces] for 42 units creates a huge problem – and we know that going in.”
It didn’t take long for McNabb-Stange to propose at the beginning of the following formal council meeting to propose accepting the Veneklasen proposal, to which council member Al Jarvis added his support. Cary, council members John Resseguie, Bill Redman and Mayor Dave Tossava added their affirmative votes. Bowers and council member Don Smith cast the negative votes. Council member Therese Maupin-Moore was not in attendance.
“We need more development downtown, and I don’t think parking is a problem,” Smith said. “I wish we had done a real parking study. We didn’t do one, and it puts us into a doom-and-gloom position. And we’ve got to get over the idea that people have to have a car. People can live and work downtown.”
Bowers explained his opposition to the proposal as coming from “having empty storefronts on Main Street” and not being “inclined to having storefronts on Michigan Avenue.”
Chris Veneklasen estimated construction on the project to begin 8 to 10 months following approval of all building and financial incentive packages. A nine-month construction period would put the completion date as early 2021.
The Kendall Place proposal rejection may have been as much about bad timing as about its parking plans. Following the decisive vote on the 128 Michigan Ave. property, Josh Haffron, a partner with the Wisconsin-based General Capital Corp. stepped to the lectern to describe his company’s development plan for the former Royal Coach property across the river from downtown Hastings on 8.2 acres of property that most recently housed a number of buildings belonging to Hastings Manufacturing.
Following up on a presentation first made to the Hastings Planning Commission Aug. 5, Haffron directed his remarks primarily to the financing package for a $17.2 million plan, the majority of which would be directed toward affordable housing, including 11 units to be designed for people with special abilities.
As with the Kendall Place plan, the Royal Coach plan’s funding will be built on a points system geared toward approval of MSHDA funding. Such factors as historical preservation and Leadership in Energy and Environmental Design standards garner needed points for funding approval. Haffron pointed out that only one of every four MSHDA funding requests are honored each year.
Haffron also explained a Payment in Lieu of Taxes program as another innovative and points-attracting factor in the Royal Coach project funding. PILOT programs direct 3 percent of tax collections to the city.
Estimated timing for the project will involve applying for MSHDA funding by an Oct. 1 state deadline followed by needed support resolutions from the city. The MSHDA funding announcement will be made in early January 2020, six months from which General Capital would expect to close on the deal. Construction would then begin in the summer with occupancy expected by summer 2021.
In other business Monday, the council:
• Endorsed the “A Walk in Homeless Shoes” event to be hosted by Family Promise of Barry County on the courthouse lawn Sept. 14.
• Approved a tax-exemption ordinance for the “Old Royal Coach” property.
• Updated revisions and clarifications to ordinances concerning the Municipal Employees’ Retirement System.
• Appointed Police Chief Jeff Pratt as deputy city manager.
• Authorized Tossava to sign a letter indicating the city’s support of the Barry Community Foundation’s participation in MSHDA’s modular housing pilot program.
• Approved a sales agreement with Co-Dee Stamping Inc. for 7.29 acres contiguous to property the company already owns.
• Authorized a $3,752 purchase of e-printers for use in police patrol vehicles.
• Authorized a $6,290 purchase of a one-ton salt box spreader by the department of public services.