GRAND RAPIDS — A proposed 63-unit apartment building in Grand Rapids is moving forward in the development process.
At its Aug. 12 meeting, the Grand Rapids City Council approved the purchase agreement for the property and $1.3 million tax increment financing for the project.
The apartments will be built by Unique Opportunities, LLC, a company partly owned by Alexandria-based Herzog Property Management.
The four-story complex will include underground parking and a mix of studio, one-bedroom, two-bedroom and three-bedroom apartments. It will be located on NE Second St., across from the Grand Rapids Area Library and KAXE studios.
The city does not grant funds or reduce taxes in tax increment financing. Rather, the developer is reimbursed using the extra property tax generated from the property’s improvement. TIFs can only be used for public buildings or projects where development would not occur without the added incentive.
Because of the TIF, state law requires that 20% — in this case, 13 — of the units must be occupied by those with incomes at or below 50% of the area’s median income. In his presentation to the Council, Director of Community Development Rob Mattei said there will be no rent maximums for the build.
But Mattei doesn’t think filling the building will be a problem. The same developer built and manages a 48-unit apartment complex on Airport Rd. Mattei said the complex was fully rented out eight weeks before it opened in 2021.
Herzog Property Management owner Samuel Herzog told the council that demand is what drew them to Grand Rapids in the first place.
A 13-unit apartment complex Herzog and his partner built in Pelican Rapids got mislabeled as Grand Rapids on apartments.com, and they received over 100 availability inquiries.
“And so at that point, I was like, ‘Well, I got to figure this Grand Rapids thing out,’” he said.
Housing demand in the area hasn’t lessened, and that’s why Herzog has returned.
“When we looked at the full year 2023 and the first portion of 2024, Grand Rapids really stuck out as having an abnormally high waitlist and really an excessive amount of demand,” he said. “I mean, the amount of calls that we would get was incredible.”
The city said the project aligns with its housing goals, as well as its plans to build up downtown. Herzog said Gen Z and millennial housing trends match, too.
“We’ll have tenants that will want to live here 10, 15, 20 years because for them the ideal isn’t to own that home and to have that maintenance,” he said. “They want to be part of a vibrant community, that growing downtown, and this is a project that enables them to do that.”
