The mixed use entertainment development announced earlier this week by Loeks Theatres and 616 Development will generate a projected $369 million in economic benefits in the first 10 years after completion, according to a conservative economic impact analysis conducted by Downtown Grand Rapids Inc.
The 10-year benefits would include an estimated:
- $192.2 million in new consumer spending Downtown;
- $156.4 million in payroll associated with new jobs housed in the development;
- $16.2 million in new sales tax payments to the state, assuming the 6% rate; and
- $4.6 million in retained local property and income taxes, after tax incentives provided to the developer by the City of Grand Rapids and the Downtown Development Authority (DDA).
These projected returns, based on the estimated $100 million phase one of the proposed project, do not include the project’s cost of construction, short-term construction jobs, economic modeling for the parking ramp or income tax receipts to the State of Michigan, which would significantly expand the economic impact calculations.
“The proposed mixed-use, high-density, theater project is emblematic of the Grand Rapids DDA’s legacy of facilitating and participating in catalytic projects that change our Downtown for the better,” said Kristopher Larson, president and CEO of Downtown Grand Rapids Inc, which manages the DDA.
“From stalwart structures such as the Van Andel Arena to programmatic shots of adrenaline like Movies in the Park that deliver returns across multiple bottom lines, the DDA is a proud partner to the public, private, and non-profit organizations working to drive investment and keep Grand Rapids moving forward.”
The DDA currently owns a portion of the land proposed for the mixed-use theatre development. The DDA in 2012 optioned the property to Jackson Entertainment, an offshoot of Loeks Theatres. After entering into the option, the DDA initiated the Arena South Visioning, a community-based planning process designed to guide the DDA’s disposition of land assets south of Van Andel Arena.
The results of the planning process, approved by the DDA Board in 2013, returned specific principles to better define the DDA’s investment priorities in the district, including but not limited to:
- Growing business and economic opportunities;
- Greening city streets, buildings and public spaces;
- Building compact urban blocks designed for people;
- Connecting transit, shops, restaurants, hotels, schools and the Grand River; and
- Expanding opportunities to enjoy the entertainment district all-year round, particularly winter.
Recognizing the importance and value of a citizen-driven planning process, representatives from Jackson Entertainment participated in the Arena South Visioning. Their willingness to participate also compelled a decision to halt design work on the site until a clearer view of the community’s priorities emerged.
Since the completion of Arena South Visioning, and more recently GR Forward, the development team has worked with DGRI and City staff to incorporate the community priorities into the development opportunity site. As a result, the stand-alone theater project evolved into a proposed mixed-use entertainment center, phase one of which includes:
- 9-screen Studio C! movie theater;
- 187 residential units;
- 38,000 square feet of retail space;
- 900+ space parking ramp built to support Phase II construction of 150 residential units; and a
- New publicly-owned, privately-managed public piazza.
The project’s $100 million phase one would rank as the sixth largest development investment in Downtown behind DeVos Children’s Hospital ($290M), DeVos Place Convention Center ($220M), Van Andel Institute Phase Two ($165M), Meijer Heart Center ($137M) and the JW Marriot ($115M).
The development in year one after completion would generate an estimated $35 million in economic benefit to the community, including:
- $18.5 million in new consumer spending Downtown;
- $15.1 million in payroll associated with new jobs housed in the development;
- $1.57 million in new sales tax payments to the state; and
- $440,000 in retained local property and income taxes.
The DDA Board will consider authorizing an agreement that outlines the terms for disposing of the DDA property, and facilitating the proposed project, at their monthly meeting on Friday, April 15, 2016.