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Commercial development check-up: housing projects continue to progress, $200 million Energy Park nears completion

As Orion Construction — one of the city’s most active development and construction firms — works to complete Fulton Square, the company also is moving forward on a number of other projects. They include the Gateway at Belknap, a mixed-use project north of downtown, which is currently under construction.

New commercial real estate projects continue to pop up around West Michigan at a frantic pace.

In a periodic series of stories, MiBiz checks in on developments to find out how they are progressing. This edition follows up with developers and stakeholders of four commercial real estate developments from around the region, including three mixed-use housing projects and one municipal infrastructure project. 

Holland BPW Park

  • Type: Municipal infrastructure, Holland
  • Developer: City of Holland
  • Contractor: Barton Malow 
  • Architect: HDR Inc.
  • Cost: $200 million
  • Size: 9.7 acres

After nearly a decade in the planning and construction process, the city of Holland’s new $200 million power plant is nearing completion. 

According to Dan Nally, business services director for the city of Holland’s Board of Public Works (BPW), the organization will begin commissioning the new plant by the end of the summer. Nally expects it to be fully operational by the end of the year. 

“Bit by bit, and very organized and very sequenced, we’ll bring the equipment up and make sure it’s running,” Nally said. “Hopefully, by the end of the year, the plant will be ready to run and make power.”

The new Energy Park will replace the James De Young Plant, which stopped burning coal earlier this year, but continues to generate power using natural gas.

Aside from operating as a source of natural gas-fired power generation for Holland, the BPW site will also include a public park on what had been a long-neglected parcel. 

Additionally, the public utility’s new plant will allow the city of Holland to significantly expand its downtown snowmelt system, which officials say cuts down the need to provide snow-removal resources. 

Fulton Square

  • Type: Mixed-use development, Grand Rapids
  • Developer: Orion Real Estate Solutions LLC, Sibsco LLC
  • Contractor: Orion Construction
  • Architect: Concept Design 
  • Cost: $9.6 million
  • Size: 55,000 square feet

Grand Rapids-based Orion Construction Inc. continues moving along with multiple mixed-use developments in the city’s central business district and its adjacent neighborhoods. 

Among those projects is a 47-unit apartment and townhome development just north of the Eastown neighborhood at the southwest corner of Fulton Street and Carlton Avenue. Dubbed “Fulton Square,” the development will bring to market a mix of townhouses and apartments when it is completed at the end of the year, according to Orion Construction spokesperson Jason Wheeler. 

Secchia family real estate firm Sibsco LLC is a partner in the $9.6 million, 55,000-square-foot project. The developers successfully sought Neighborhood Enterprise Zone (NEZ) and Brownfield tax credits for Fulton Square. 

As Orion Construction — one of the city’s most active development and construction firms — works to complete Fulton Square, the company also is moving forward on a number of other projects. They include the Gateway at Belknap, a mixed-use project north of downtown, which is currently under construction. Additionally, the company is in the planning stages for a development along North Monroe Avenue on the Grand River, as well as a twin-tower project in downtown Grand Rapids that will be anchored by Warner Norcross & Judd LLP. 

Downtown Muskegon Housing

  • Type: Residential development, Muskegon
  • Developer: City of Muskegon, Parkland Properties, Port City Construction and Development
  • Contractor: Multiple, including Port City Construction and Development and Orion Construction
  • Architect: Multiple including Hooker DeJong Inc.
  • Cost: N/A
  • Scope: The effort by public and private entities in Muskegon aims to create a variety of housing types in the downtown area. Stakeholders hope for about 100 new units of market rate housing.   

In an effort to build a market for downtown market-rate housing, the city of Muskegon continues to work closely with the private sector and in some cases is developing housing on its own. 

City Manager Frank Peterson told MiBiz that the city has built nine single-family homes in the Nelson neighborhood on the edge of the city’s downtown. Two houses remain under construction, and the city has sold one so far. 

With homes priced between $160,000 and $190,000, the city aims to show would-be developers that downtown Muskegon and its adjacent neighborhoods offer a sound investment opportunity. 

“One of the things we’re trying to demonstrate to the builders and the developers and potential investors is that there is a market (for new housing) in downtown Muskegon. We just wanted to demonstrate it,” Peterson said, acknowledging that the return on the city’s investment likely will fall short of the levels many private developers would typically demand.

“I don’t think it’s the kind of jaw-dropping results developers are going to want,” he said. “They’re going to want to make 20 or 30 percent, I’m sure. But we’re proving they could do it and actually break even at least. The next step is to … focus on getting them to a profit level.”

To help move that goal forward, the city is working closely with a couple of Muskegon’s more established developers: Parkland Properties LLC and Port City Construction & Development Services LLC. 

Parkland Properties plans to complete its redevelopment of the Highpoint Flats apartment project while Port City aims to renovate the former Ameribank building into apartments, retail and potentially office space. 

Peterson said he anticipates about 100 total units of market-rate housing to hit the market in the next couple of years.

That figure factors in the efforts from the two private developers and the city. 

“(Market-rate housing) gives us a demographic that doesn’t exist right now,” Peterson said. “We expect professionals and retirees to have more buying power. And hopefully that gives us a baseline to attract more retail.” 

Diamond Place

  • Type: Mixed-use development, Grand Rapids
  • Developer: Third Coast Development LLC
  • Contractor: Pioneer Construction
  • Architect: Progressive AE
  • Cost: $42 million
  • Size: 2.3 acres with 165 apartments and 23,000 square feet of ground-floor commercial space

Third Coast Development LLC plans an August or September groundbreaking for Diamond Place, a 165-unit, mixed-use housing and retail development along the Michigan Street corridor in Grand Rapids.

The Grand Rapids-based commercial development firm currently leases the Michigan Street site, located between Fuller and Diamond Avenues, to Proos Manufacturing Inc.

According to Third Coast Development Principal Max Benedict, the company expects Proos Manufacturing to vacate the site by August with a groundbreaking coming shortly after that. 

Aside from mixed-income housing, Benedict and his partners hope to lure a small grocery store to a 15,000-square-foot ground-floor commercial space in the project. 

The $42 million development will receive $1.4 million annually over 10 years to subsidize the rent of 123 of the 168 units. An additional 98 units will be income-restricted.

Third Coast Development partnered with Okemos-based PK Housing and Management Co. for assistance with the Low-Income Housing Tax Credits and New Market credits. 

Benedict said in an email that the firm is not yet ready to announce a grocery tenant, “but we’re extremely excited about our concept.”