Mark Sanchez, Western Michigan Business Review , May 12-18, 2005

Hailed as a project that will further the evolution of HealthCare Hill or the Medical Mile near downtown Grand Rapids, the $35 million MidTowne Village was a test of perseverance for its developers. The project nearly fell through on any number of occasions, as the developers considered walking away after running into yet another obstacle. In pulling the project together, partners David Levitt and Bradley Rosely negotiated some 50 separate agreements to buy homes, created criteria for objectively determining blight and convinced city leaders and the state to support tax breaks.

Then there was the matter of overcoming the initial public vilification that arose in 2002 when word got out that they were quietly acquiring residential parcels in the neighborhood north of Michigan Street. “In the beginning we were thugs, criminals and awful people who were trying to throw innocent renters out of their homes,” said Levitt, an associate broker with S.J.Wisinski & Co. in Grand Rapids. Levitt and Rosely, an assistant vice president at Wisinski, are partners in Third Coast Properties that’s developing MidTowne Village. Speaking at the Synergy commercial real estate conference in Lansing, Levitt and Rosely detailed the effort it took to assemble so many parcels into a single six-acre project site.

 The most valuable lesson gained in the process was the need to “take the high road,” remain flexible and to have a willingness to walk away from a deal. “Everything in this process is a negotiation,” Levitt said. “It’s the give and take of trying to make a development as large as this work because when you go and say, ‘this is what we’re going to do,’ that doesn’t work. ”Today, the developers are preparing to begin construction in the coming weeks on MidTowne Village. The development will replace an aging residential neighborhood with a mixed-use development catering to the nearby medical, education and research activities. The development is just down the road from Spectrum Health’s Butterworth Campus, the VanAndel Institute and Grand Valley State University’s Cook-DeVos Center for Health Professions.

While the project still has its risks, plans are progressing far better now than when Levitt and Rosely started to acquire the land they needed. After their cover was “blown” and city leaders and neighbors reacted harshly amid newspaper headlines about “mysterious developers” trying to buy homes in the MidTowne neighborhood, Levitt and Rosely moved into damage control mode. They changed how they went about assembling the parcels after first trying to do it “as quietly as humanly possible,” Rosely said. When the initial approach backfired, they reached out to the local neighborhood association and city leaders to explain their vision and build support for the project. “We were headed for a trainwreck. We were done, ” Rosely recalls of the initial public reaction.

In response, the developers went door to door to talk to homeowners and renters. They repeatedly revised their design to address concerns and they offered to help renters pay moving expenses. The change in strategy worked, as all of the homeowners and landlords agreed to sell their property and city leaders enthusiastically endorsed the development. As they assembled the acreage, the developers also sought to secure financial assistance through state and local brownfield tax credits and tax-increment financing.

To qualify for the $4.6 million they eventually received, the developers had to devise a way to give definition to “blight” and satisfy the bureaucracy in Lansing. “We all know blight when we see it, but how do you objectively quantify it? How do you get that point across?” Levitt said. They compared the neighborhood against city averages for tax delinquencies, the growth in taxable value, code violations, mortgage foreclosures and the percentage of owner-occupied dwellings. The neighborhood was worse than the city average in every category, Levitt said. In that process and others, the developers needed to remain cognizant of the emotion involved for people to sell their homes to make way for new development. In some cases, people had lived in the neighborhood for decades. “For us it was a real estate transaction. To them it was their home,” Levitt said. “In this case, we had to really become attune to the emotion. ”

Designed to accommodate a demand for medical office space in the Michigan Street area, MidTowne Village will consist of four office buildings totaling160,000 square fee, plus 14 to 21townhouses. Pioneer Inc. is the general contractor on the project. Build out will take three years, Levitt said. The developers have sold one office building, have a signed letter of intent for a second and have signed leases for 40 percent of the office space in a third. Asked if they would take on the venture again if they had known three years ago what they knew today, Levitt joked they probably would not. “In our business,” he said, “there’s a lot easier ways to make money. ”