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Rising costs halt Grand Rapids development project, contractors say this is a sign of the times

Robinson Flats conceptual rendering.png
Posted at 4:13 PM, Jun 14, 2022
and last updated 2022-06-14 17:41:06-04

GRAND RAPIDS, Mich. — Construction costs have brought a Grand Rapids' housing development to a halt.

Robinson Flats was planned to go in from 1407 Robinson to 1417 Robinson.

But it can't. Construction costs for nearly everything have gone up and become so unpredictable, the project is on hold.

Wheeler Development LLC explained further:

“After a thorough review of the proposed Robinson Flats project bids, Wheeler Development Group has decided to not move forward with this project at this time. This decision is due to the economic challenges in the construction market. Our team has spent significant time in the design, bidding, and value engineering phases and through our due diligence, it has become clear that material pricing and lending market variables make this project unviable. This is not uncommon in the development industry and at any one time our team may have 5-10 projects under consideration, many of which don’t materialize. The uniqueness of the economic situation right now compounds uncertainties and does play a role in this decision but it is expected that some projects work great under specific conditions and not so well under different circumstances. So the best way to say this is at this time, this project does not make financial sense to proceed with.” Jason Wheeler, Spokesperson for Wheeler Development LLC said.

Unfortunately, this is a familiar problem for contracting company Grand Rapids Construction.

“Price jumps, that we’ve never seen, ever in our lives,” Grand Rapids Construction owner Matt Macelheny said.

Owner of Grand Rapids Construction Matt Macelheny says this is an all-too familiar issue he faces daily.

"You’re seeing day-to-day OSB jump from $25 a sheet, to $40. That makes it absolutely undoable, until we secure the product, to lock in the price," Macelheny said.

But prices are higher than ever.

“Cultured marble has jumped through the roof. You used to be able to get cultured marble for fifteen dollars a square foot. It’s depending on where you go right now, $60 per square foot,” Macelheny said.

Macelheny says he hasn't seen anything like it before, and he's doing his best to keep clients informed. But he doesn't set the prices.

“For goodness sakes, we were running out of lumber a year ago. Because of that, lumber spiked. Supply and demand,” Macelheny said.

He says things show no signs of slowing down.

“I have clients say I’m going to wait for things to settle down. I’ve had some clients waiting for things to settle down for two years. I’ve had some clients wait for 2 years. Not only did they not get the stuff they wanted, but now, they’re stuck paying more.” Macelheny said.