Apartments Planned For GR’s Empty Morton House; High Demand For Downtown Housing

Posted at 4:51 PM, Feb 13, 2013
and last updated 2013-02-13 17:56:48-05

GRAND RAPIDS, Mich.–Plans to convert the old vacant Morton Housing building located at the corner of Monroe and Ionia  in downtown Grand Rapids are  underway.

The new developers, Rockford Construction and partner DeVos owned RDV Corporation, who recently purchased the old building, want to transform the vacant 13-floor facility into mixed retail and at least 100 market rate apartments.

They’re hoping to get some tax breaks to do it.

“We are really trying to hold the cost down on the project, explained Kurt Hassberger, chief operating officer for Rockford Construction Co.”So we can hold rents down for our tenants that’s really the issue.”

On Tuesday, the Grand Rapids Downtown Development Authority was scheduled to consider a 10-year tax break for the developer under a tool known as Obsolete Property Rehabilitation Exemption Certificate (OPRE).

It would basically freeze the tax value on the building for 10 years, omitting property tax bills for the owners.

However, the item was pulled from the DDA’s agenda before the meeting.

“It was really on a technicality,” said Kristopher Larson, executive director of the Downtown Development Authority.

The city wants to make sure the financial tool does not conflict with its previous obligations to some bond debt with the Van Andel Arena project from the 1990s.

“Ultimately we want to make sure we are using the right tool to make the project work, said Larson. “It is by no means a reflection of the project itself. It is a fantastic project and we are excited about working with the developer on the project and hopefully we will see it again next month.”

The historic Morton House building was construction by J. Boyd Pantlind in 1922 and became an elaborate hotel.  It has changed roles throughout the decades and was eventually converted into federally subsidized low-income housing.

After a FOX 17 investigation uncovered mismanagement and a bed bug infestation, the building was closed in 2011 and has sat empty ever since.

The new owner and city leaders want to see it get a fresh start and agree that housing development is where it’s at.

“We hear it from the entire development community,” explained Larson. “The market is very deep for market rate apartments.”

Besides fixed income and student housing, there are around 586 market rate rental units in downtown Grand Rapids and not a lot of vacancies.

Stephanie Hwu, 22, struggled to find a downtown apartment when she first relocated to Grand Rapids last year for her career.

“Not a lot of luck,” said Hwu. “A lot of leases weren’t up, there wasn’t any availability.”

After some searching and waiting, she ended up renting a downtown condo from an owner for $1400 a month, split with a roommate.

“It’s really nice and safe and affordable, ” she said.

Developers of Morton House hope to cash in on the growing demand for rentals in a growing city.

“There seem to be a lot of projects that are very successful with waiting lists and rents are trending upward,” said Kurt Hassberger, chief operating officer for Rockford

Construction Co. “Which is all good for the viability of the project, “

He says whatever financial tool is used for the development, they hope to start construction sometime in 2013.