- The state awarded two development groups a combined $605 million in tax reimbursement subsidies
- One is a $796 million project to build three high-rises on the Grand River in downtown Grand River
- Michigan will reimburse about 70% of those costs to the developers, including the Van Andel and DeVos families.
Michigan taxpayers will spend over $600 million to cover two-thirds of the costs of two new, large-scale developments in Grand Rapids and Kalamazoo, following approval Monday by state officials.
The bulk of the subsidies will go for a $796 million plan to add three high-rise towers to 7 acres on the Grand River in downtown Grand Rapids, a few blocks east of Van Andel Arena.
The developers — a partnership with family members from the Amway-founding DeVoses and VanAndels and Chicago-based Magellan Development — sought $560.9 million through the state’s Transformational Brownfield Plan.
The second project, totaling $96.5 million, is for the renovation of the Michigan Avenue Courthouse in Kalamazoo, which will be remade into a boutique hotel, while 115 apartments will be built on two additional properties.
Officials on the Michigan Strategic Fund, an arm of the Michigan Economic Development Corp., unanimously approved the plans during a meeting Monday.
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The plan allows so-called “tax capture,” using property and payroll taxes to reimburse developers for their upfront costs. Reimbursements can extend up to 30 years.
The Grand Rapids project partners would get 70% of the overall capital investment refunded. State Treasurer Rachael Eubanks, a member of the Michigan Strategic Fund board, called that amount “considerable.”
Another $22 million in public funding has been awarded through local tax breaks.
The taxpayer funding sought in Kalamazoo is $54.6 million, or about 57% of the overall capital investment.
More investment in Grand Rapids
The downtown Grand Rapids project represents the third-largest transformational brownfield plan approved by the state since lawmakers approved the incentive in 2017, behind mortgage billionaire Dan Gilbert’s renovation of the JL Hudson building and The District Detroit.
“We see it as an ecosystem of residential, restaurants, retail, hospitality, office and public spaces that connect neighborhoods and energize the downtown riverfront,” JB Berger, president of Magellan, said at Monday’s meeting.
He said the fundamentals of the deal are “strong,” but the surface parking lot on the former riverbed is “both complex and expensive to build on.”
“This is the right project in the right place, but it is not financially feasible to invest the nearly $800 million planned for this project,” without the public funding reimbursement.
The project includes:
- A 21-story office tower of about 916,000-square feet, with parking and some retail space. Construction is likely to start in summer 2026.
- A 43-story high-end residential tower with 595 apartments, including 118 studios. Rental rates could be one-third to twice as much as top of market prices, the state said, though figures were not presented. The building also will have ground-floor retail space and parking.
- A 130-room hotel tower that would include 76 owner-occupied condos and 490 parking spaces shared with the residential tower. Construction of the hotel, the residential tower and the parking area is likely to start in 2027.
Meanwhile, the state anticipates a single tenant would occupy the office space, using over 400,000 square feet and employing 1,650. Officials did not disclose information about that prospective tenant to reporters. That deal also could be eligible for taxpayer subsidies, officials said.
The construction comes as other riverfront development is underway in Grand Rapids, including the Acrisure Arena and an 8,500-seat soccer arena.
Both also are funded by Van Andel and DeVos family members, as well as the state: $252 million in transformation brownfield funding was awarded in 2024.
Grand Rapids Mayor David LeGrand said the high rises will open up the riverfront, while the housing will attract residents to “the area that’s clearly got the most job opportunities and that’s the most walkable part of our city, …. our core downtown.”
Before the vote, Peter TeWinkle, a pastor representing public spending watchdog Together West Michigan, criticized the short-notice special meeting and the lack of information ahead of it.
“There’s just a lot we don’t know,” he said. “From the beginning, we’ve heard that every dollar of this incentive package is necessary for the development to work, but we haven’t seen any numbers to know why that’s the case.”
Eubanks, the state treasurer who called the state portion of the project “considerable” later told Bridge in a statement that she voted yes for the project “without hesitation.”
Looking ahead
With the awards on Monday, $124 million now remains in the $1.8 billion transformational brownfield funding.
However, legislation proposed by state Sen. Sarah Anthony, D-Lansing, seeks to expand the transformational spending cap to $3.5 billion. The move would allow state funding for projects like the Detroit Renaissance Center redevelopment.
House Speaker Matt Hall, R-Richland Township, has said that expanding brownfield spending is not a priority. Republicans have targeted economic development reforms, including elimination of the MEDC.
“It is time to fundamentally start over and go forward with methods of economic development that are forthright, efficient and truly provide a return on tax dollars,” Rep. Jay DeBoyer, R-Clay, said in November.
Eubanks said her support on Monday extends to the full transformational brownfield program.
“The state needs powerful tools to create jobs and ongoing investments in our communities and help businesses be successful, and that’s what the transformational brownfield plan is designed to do,” she told Bridge.
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