City to Redevelop Key Block

City to Redevelop Key Block KALAMAZOO, MI - Redevelopment of the 100 block of East Michigan Avenue could offer a new price-point for housing in downtown Kalamazoo. While specifics about a new, multi-use development on the north side of downtown's main thoroughfare remain scarce, officials at Downtown Kalamazoo Inc. are saying it is expected to include "work-force housing" on the upper floors.

"To date, the condos that have been developed downtown are priced on the higher end," said Vicky Kettner, DKI community relations director. "Here we're looking to have living space for the work force so that people who work downtown can afford to live close to their jobs."

Increasing the number of affordable residences in the central business area is one of six strategic priorities in Kalamazoo's newly adopted 10-year downtown plan. Specifically, planners say 500 new "affordable" residential units should be created downtown during the next decade.

Officials say downtown Kalamazoo currently has about 500,000 square feet of residential space and most of it is full. That market is dominated by mid- to high-end units that can cost $150 to $200 per square foot to buy.

Recent studies commissioned by DKI found demand for downtown condos starting at $95,000 and units that could be rented for $500 to $2,200 a month.

According to the downtown plan, "a developer has stepped forward to take up the challenge" of redeveloping the 100 block of East Michigan. "The project economics are huge and beyond the capacity of any single entity," the plan states.

Sources familiar with the tentative redevelopment concept say it represents a fraction of the $77 million investment contemplated in 2006 by local developers William Johnston, head of Greenleaf Cos., and J. Craig DeNooyer, president of development firm Treystar Inc.

Now expected to be closer to $10 million to $15 million, the latest concept follows a model that puts retail/office space at street level, adding residential and more office units on upper floors. It does not include the city's adjacent surface parking Lot 9, which was part of the 2006 proposal.

The project area includes four historic buildings that are in deteriorated condition. The plan does not make clear how many of the buildings would be renovated or how extensive the work would be.

The plan calls for "Renovation of Existing Buildings" followed immediately by "Demolition/Development of a Multi-Use Signature Building."

Key partners listed include the Kalamazoo Community Foundation, "a private developer," the city and county of Kalamazoo, the Historic Preservation Commission and Kalamazoo's Local Initiatives Support Corp. that works on affordable housing projects.
Funding resources include private money, local government support, and several historic and economic development tax-credit programs.

Privately, observers say keeping all those balls in the air long enough to close the deal will take a master juggler. The private partner has not been publicly named.

"We have three nice (street) corners there and one that needs some attention," DKI President Kenneth Nacci said of the intersection of Michigan Avenue and the Kalamazoo Mall. "If A through Z happen, we might have a project. We're hoping all the pieces of the puzzle come together in June." City records show Downtown Tomorrow Inc., the real-estate arm of DKI, acquired the four buildings with addresses from 105 to 127 E. Michigan Ave. in 2001 and 2002 at a total cost of nearly $1.37 million.
Source: mLive.com

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