IF THEY BUILD IT . . . . . . WILL THEY COME?

Have any of you driven around downtown Grand Rapids lately and noticed the plethora of condo complexes every direction you look?  Check out the skyline, they are everywhere – north, south, east and west. You want one next to a highway, we’ve got one for you!  You want one in an old renovated furniture factory, we’ve got that too!  You want one in a historic area, ditto!  You want a new one with options galore, have we got a condo for you!  You want a river view, no problem, which side do you  want - sunrise or sunset? Close to the college scene? Come on down, we’ve got one of those and bring your party shoes cause we're going dancing after the closing! You want one with Brad Pitt, Angelina Jolie and all their lovely children next door? We've got that too! Actually scratch the last one, I don't think any developer in town has that many connections yet. Bottom line...

River City is quickly becoming Condo City.

Let’s see if my memory holds…there is Park Row, Icon on Bond, Plaza Towers, Landmark Lofts, Union Square, Boardwalk Condos (the Old Berkey & Gay Factory), Monroe Terrace, City View, River House, The Fitzgerald, Front Row and the Waters Towers. That’s just a few I can remember without research. I’m not even going to mention much older complexes and those not close to downtown.  Most of those mentioned above are either done being built and ready for move in, are in the process of being built or  have been renovated/remodeled in recent years to compete with new builds.  Prices seem to be hovering in the $150-250K range for one bedroom/one bath, up to $300-500K for two bedrooms/two baths or more. Factor in a premium price if you choose to be up high, with a river view and want the luxury of new over old construction.  Over 18 units alone are currently for sale between $500,000-1,000,000. That’s a lot of expensive condo real estate for such a small market as Grand Rapids. If you reference the income availability grid noted in the last article, in the entire state of Michigan, only 8.8% of the population can afford condos in GR that are on the market between $500,000-1,000,000.   This number is not what we would call a “bumper crop”.

The GR Press had an article a few weeks back noting that realtors and developers are counting on the suburbanites and young professionals all dumping their current living arrangements for the ease and joy to be found in the concrete jungle. They profiled some parents and their adult kids all giddily choosing condos and living in downtown instead of the burbs.  They praised city living and all the perks that go along with it. A new day has dawned people, a new day has dawned and if you don’t buy a condo soon you will have missed it.  Really???

Granted, there are certainly many positives to be found in condominium living:

no yard work
no exterior maintenance upkeep
smaller sq. ft. so, less house to clean
single level living with few to no stairs
lower buy in prices (usually, not always)
neighbors upstairs, neighbors downstairs – lots of new friends if you want them
property tax breaks in renaissance/tax free zones
community areas with pool/tennis courts/work out rooms
use of public transportation system with ease
ability to ride your bike with helmet all over city streets – please look before crossing!
the ability to walk around downtown and not need a car to visit restaurants, bars, clubs, etc.
being close to all the action – parades, festivals, fireworks shows, etc.

As in all things, there are drawbacks to condo living as well. A few are:

mandatory monthly condo association fees (often quite high)
lack of privacy and sometimes acoustical issues
access to outdoors limited to tiny balconies, small patios and often no green space
due to the box like nature of condos, often feels like glorified apartment living
dogs/cats/pets often not allowed per HOA rules & regulations
limited guaranteed and covered parking both for owners and visitors
lack of gas stations/grocery stores/convenience stores located close-by  - often a car is needed just to get basic food and supplies
Whether walking or driving, congestion is growing downtown, you’ll have to deal with it
lower long term appreciation rates
reduced buyer pool when you try to sell later

Places like the Boardwalk Condos (old B & G Factory) seemed to sell in a decent amount of time per county records, but the prices are in the lower range, 70K - 250K max.  I have been told by some that this building might be subsidized (I have not been able to confirm this yet) which makes a difference to sales and could account for the lower prices. On the other hand, the lower price could be due to the fact that the previous developers could never get straight if they actually removed toxic waste from this site illegally by the hundreds of truckloads (they deny this yet, video evidence and witness testimony shows to the contrary) or if the toxic waste is still below all the buildings in massive amounts as they claim.  Perhaps this inconsistency is part of the pricing program.  Keep it cheap and keep them quiet.  Residents, don’t worry about the toxic waste, we say they took it out. On the other hand, the old developers say it’s still there. Time will tell for sure.  By the way, you can have dogs in this complex and they have been known to use the entire back lot of the building and train track area as their massive doggie doo-doo box. Sooooo convenient. Count this building in pet lovers – it’s for you.

I drive past the Icon on Bond condos every week. Their initial occupancy dates were advertised as beginning in April. Since then, their web site has moved occupancy dates to early summer. Even with that change, the place still seems eerily quiet and empty.  Their web site advertised that of the 118 condos, ½ had sold as of December. The question remains – where is everyone then? A clean transaction for a completed unit with a qualified buyer could easily be done in 3-4 weeks or less.   I haven’t seen anyone moving in and nothing is recorded as closed at the county level yet either per my research. They seem like nice places, unsure what is happening over there. Is unseen interior work on delay?  Is the complex too pricey? Unappealing location near the freeway, industrial corridor and across from electrical towers and power lines? Simply a victim of too many condos for sale in town? This one is a bit of a mystery.  If any of you have wind of what is happening, do share.

The glassy blue modern marvel known as the River House continues to rise over the western Grand  River, but prices seem a bit steep.  It costs a buyer about 250K to get in lower level and smaller units, and prices skyrocket  to  the 500-650K range for higher locations, water views, cityscapes and more amenities. This will prove to be the hot place for young as well as older professionals who probably want a status location and one of the better condo views of the small, but appealing Grand Rapids skyline.  How popular it proves to be on the other side of the river is still to be determined. I imagine for those with money and good walking shoes, the location will be just right. 

Park Row is coming along fine over on Michigan Street.  Developers noted awhile back to the media they have sold something like well over ¼ of the units as of the construction phase begun earlier this year.  The complex itself seems to be appealing with dedicated entrance/exits, central boulevards, landscaping and green spaces. It does face the freeway and busy Michigan Street so, the views won’t be nearly as appealing as those "down by the river" (anyone thinking Chris Farley of Saturday Night Live with that last line? You know…I live in a van, down by the river!).   Anyway, the draw at this complex is it is close to GVSU and the medical buildings on Pill Hill.

The Fitzgerald in the old renovated YMCA building is small and boutique like. The units that are finished appear to be well done and appealing, but they have been pricey and somewhat slow to sell.  This complex is more for the upscale buyer from what I have seen.

Good old Plaza Towers is always the big contender in town. It’s a fine mixture of lower priced condos, medium priced and high end – it would be perfect for Goldielocks and her three bears. The best thing going for this place is location – and in real estate – we all know how prized that can be. It sits off the Grand River and has great views from three sides of the building. It is right next door to Van Andel Arena, The Bob, TGI Fridays, the new JW Marriott 5 star hotel, multiple banks, office complexes and has a great riverwalk area. All units get guaranteed parking of at least one up to four spaces and the place has tennis/basketball courts, exercise room and pool/hot tub area. Don’t forget there are also apartments in this building and The Marriott Courtyard Hotel with restaurant. It’s an older building, but always being updated in terms of landscaping, exterior repairs and interior upkeep. With all the competition in town, it may need to remodel it’s entrance and lobby to the condo tower and common hallways as time goes on to not look dated and remain one of the premier condo addresses in town.  It’s not big city great, but it’s one of the better choices for Grand Rapids.

That’s enough individual condo complex commentary for now.

I have seen a handful of complexes in person, others via pamphlets/flyers, web sites, personal photos and on line.  I would call most fairly standard and nothing too exciting (think Chicago, Miami, New York, Paris here).  All the looks are definitely the Midwest at their best and there is nothing wrong with that.  The majority offer the standard white box interior, a little bit of woodworking and exposed brick walls, open ceilings with duct work showing through in the renovated buildings, hardwood floors,  a few windows in each room, upgraded kitchens, appealing bathroom, but everything else is remarkably apartment like.  If you can get a great  river view or great skyline view do it, these things will help with extra enjoyment now and better resale value later.

The GRAR MLS (multiple listing service) shows all single family homes, condos and multi-units available on the market, but only those properties that are listed by licensed realtors or those working with licensed realtors (builders/developers) show up.  Builders or developers selling FSBO without licensed representation are not typically found in the MLS system.  Thus, the availability of active units and closed stats developers quote to the media is hard to confirm. They rarely want to admit a complex is proving hard to sell or slow to sell so, numbers could easily be inflated to help move units along.  It takes hard research at the city and county level to verify their numbers if you want exact data as to what is available, what is under option, what is sold and what has closed. So, for now, most of us take the builders/developers at their word what has moved off the books. Hope they are as honest as they look :-)

I'm all for condos and ample building provided the market can support it. I certainly want rising housing values.  What I don't want is for supply to outweigh demand and then cause prices to drop and problems to domino in terms of lower appraised values, depreciation, distress sales and the like. Although I feel there is a need for this type of living in a growing urban area like G.R., especially with all the medical, research and education related jobs coming to the area in the next 1-2 years, I remain a bit uneasy at the supply and demand ratio.  I worry builders/developers got a wee bit too excited at the prospect of doing new brick and mortar work and didn’t plan for mortgage issues, credit tightening and an unstable economy throughout the region and state. My guess is even if units are slow to sell, in time prices might come down to bring in those necessary buyers and get the properties off the books. Some may offer closing cost concessions, hoa credits, home warranty plans and more if things gets really tight and slow. Eventually, all should be liquidated, but at what price and how long might it take?  Perhaps some of these condo complexes should have been developed into newer and more appealing higher end apartment options instead. A more balanced mixture of both -  condos and apartments - might have proven just the ticket.

Of course all this leads to the biggest question of all, what happens when todays condo buyer becomes tomorrows condo seller?  Traditional buyers will  move less frequently into the condo market whereas the condo market buyer transitions easily into the single family market.  Historically, in nearly every region across the U.S., condos do not perform as well as single family homes.  That means they typically don’t sell as fast, the buyer pool isn’t as big and values don’t seem to rise as quickly.  The American Dream remains owning your own home. Owning your own condo is still a great achievement, but it just isn't quite the same.

I think condo living has its plus and minus points as you can see.  With that said, I remind readers as always, buyers should beware.  Today’s condo bargain may be tomorrow’s financial loss. Definitely consider buying a condo if it’s right for you but, may I simply suggest, buy wisely.

At least you have lots to choose from in Condo City, I mean Grand Rapids :-).

Bridget Dupont-Tingley
Editor
The Local Area Watch

Comments

[R. Temmins]

Bridget, great take on downtown living. A little different than the political/social commentary usually seen at local area watch but I like it. I too have been watching the market as I have friends considering condo buying. I am going to share this piece with them so, they understand both the pros and condos of high rise living. There is so much more to think of than all the options out there right now. Future selling counts too. Good take on this issue. Thanks!
Rachel

[Ernie]

i think the building boom in downtown is good for our city. the more upscale housing that is available the more we will pull in professionals and increase the city's tax base which will help with the budget woes. so everyone wins. So what if a few too many units might be built right now I'm sure they'll sell eventually. i say build and they have come and will continue to come.

[K. M. J.]

I have to disagree with the guy above who thinks downtown building is so great. I think it's time the city stopped providing tax free zones, ren zones and tax abatements to manufacturers, builders and developers and new condo owners. They might call it a tax break to keep them them in town or bring them to town, but face it everyone else who already lives and works in town is making up the difference for these perks someone else got. Time to level the playing field for all. I wouldn't mind all the building and development if a fair and set program for taxing was going on with developments, projects and work. I look at each buiding right now and wonder, who is paying no taxes here, who is getting a tax break there, who moved toxic waste from this site and where did it end up with no penalty if they did it illegally, who got this site for reduced price if they have some friends in high places, which players have close contacts and are allowed to even do projects in downtown and who is shut out, etc. I think in this town these questions need to be answered before we all go hip hip hooray for downtown building growth.

It's bigger than just the real estate market. At least I think so.

Kelly

[Bob Thingly]

These places are getting by tax free?

So in essence they are just Section 8 housing for the wealthy!

Screw that! you want to live high on the hog in downtown GR, then you should pay for it.

No one is giving me a tax credit for where I live.

[Bridget Dupont-Tingley, Editor @ L.A.W.]

Hello Rachel, Ernie, Kelly & Mr. Thingly,

Thank you all for your intersting comments on this article. Sounds like I am not the only one noticing the condo building boom in our backyards.

For the most part, the building boom is a good thing. It improves our skyline, gives further living options to young professionals, older retires, first time property buyers and EVENTUALLY, will bring a fresh tax base to a city that needs it from new housing taxes and some additional income tax. The drawback as I noted earlier is if they go overboard, build more than there is demand and properties remain unsold. We don't want prices and the market coming down further due poorly planned over-supply. As in all things, you can have too much of a good thing. Let's hope that is not the case.

As for the tax issue Kelly and Mr. Thingly, a few of these complexes did get tax breaks from the city for renovating old factories, erecting new buildings on sites near industrial/commerical corridors or developing further brownfield areas (Icon on Bond, Union Square just to name a few). The intention is that these sites might have gone otherwise unused or are difficult to transform thus, the tax breaks let the developers and builders do extra work and get a benefit from this additional real estate development effort. The breaks are then passed along to the future condo owners at these properties. The tax reduction or abatement typically will end within a handful of years. The city could be petitioned to continue the tax breaks/abatement once they are set to end, but usually in private ownership, that will phase out in time. I have not been told by my sources or found any evidence myself that any of these buildings were given permanent tax free bases - that would be highly unusual.

In the end, you are both correct, someone picks up this deferred tax tab. Nothing is ever free. Especially to you, me and others. The city gets to wield power over companies and people by use of these tax programs. The get to pick and choose who gets these financial perks. They get to pick the winners and the loosers. The developers, builders and new condos owners are the winners. Everyone else paying the current tax rate is not quite so lucky. We the people remain fairly powerless to these special tax programs.

Let's just hope the new condo demand is there, all the units sell and no new ones go up until the market improves long term. The city and builders are betting big time that Pill Hill is the salvation for GR in the next decade or two. If cities like Ann Arbor can loose large medical companies like Pfizer and others, we need to be careful in our planning and development as well. No single industry should be bet upon for any one market. We should have learned that from the auto industry. What is big one day can be toast the next. What is once the pride and joy of a city can turn to dust over time. If someone comes to town they can leave just as easily. Diversity remains the ticket for future balance when it comes to regional economic success. That means having lots of business diversity - retail, industry, manufacturing, research, medical, education and so on.

Thanks for reading and giving us feedback!

Regards,

[Bridget Dupont-Tingley, Editor @ L.A.W.]

Dear L.A.W. Readers,

For purposes of full disclosure, I feel I should note that I have been in the real estate industry as a professional in the State of Michigan for over 13 years now.

I went and obtained my real estate license a few years after I graduated from Eastern Michigan University. I believe the year was 1994. I then got my certified relocation professional status a few years after that in 1997. I have worked on behalf of large companies like GM, Ford and others as a contract employee via firms like Prudential, Lawyers Title Insurance and Argonaut/GMAC Relocation Services. I was a Relocation Consultant and Inventory Home Specialist during my 13 years in the business. I was specifically trained to handle corporate employees moving across the U.S. and over-seas and helping them to coordinate their entire move in full. That could mean moving as many as 200 renters, new hires and full time employees at any one given time. I was also in charge of liquidating any homes that remained unsold by employees. That could mean anywhere from 40 to 150 homes at a given time throughout the U.S. Thus, a large part of my job was analyzing any given real estate market and trying to figure out it's strengths and weaknesses. Knowing a market from all angles meant keeping costs down to the corporation, keeping employees happy with maximum values and ease of moving and finally, opening and closing a file in a timely manner - say 60-90 days or less.

In posting my real estate articles, I want to note I have professional credentials and experience in this business but, no direct or indirect affiliation with any company in Western Michigan. Any opinions expressed are completely my own.

Regards,

[S. P. Donist]

As Bill noted in other articles, chances are many will stay away from downtown G.R. due to the school system.

You might move here if you are young & single, middle aged and professional with no kids or older and the kids have moved away. Chances of bringing couples to town with school aged children is minimal. Who wants their kids to attend the failing and dangerous school district known as GRPSD? I know people in downtown like Heritage Hill, East Town etc. all seem to send their kids to private or parochial schools as you can tell by their blue or plaid uniforms. Who can blame them? If you care about your kids it's not a color issue (although those who refuse to discuss the real issue decide that must be it, how wrong can you be) it's about poor test scores, lack of safety and pathetic school room disclipine. You can't put up enough condos or new schools to build your way out of the mess they have created for this district. Until the school system and the city officials wake up to those facts, this city will never grow to great heights.

At leasts that's what I think and I have lived here all my life.

Sprarrow

[Bridget Dupont-Tingley, Editor @ L.A.W.]

Hello Again Sparrow,

You, Bill and many others understand the positive and negatives to this city well. The schools are definate negatives.

Just today the news reported more existing buildings in downtown are going to convert certain floors of their buildings into lower priced one bedroom/one bath condos that range in price from 130-175K. Thank goodness, I thought there might be an immediate housing shortage at hand. ;- We'll just have to keep reporting on the dirty tactics used by the schools to imprision children who want to get away for greener pastures. We'll hold the board members and city officials accountable as we can. More brick and mortar won't solve the problem.

Thanks for reading and all your thoughts.

Regards,

[JMillest]

I have little to no real estate experience so, I have a question for you.

Why do we keep being told new housing starts are down, inventory is sky high, foreclosures are rampant, people are leaving our state for greener pastures, our school district is in the toilet, our state has serious budget and tax problems and yet the developers in downtown G.R. are building condos in mass numbers for thousands of possible buyers. What gives? How can regular family homes and new houses be in the crapper yet condominiums are in a boom stage? Doesn't all real estate follow principles dealing with the same lenders and loan programs, interest rates, buyer groups and so forth? Is the media putting a positive spin on these condominium complexes to make the area and developers look better? Or, should we all buy the media pitch and agree condo living really is THE housing of the future?

Your thoughts would be appreciated. Jacquie

[John]

Hi, nice blog. Pretty informative. But,before you start signing papers with a broker, it is important to discuss fees. Brokers work on a commission basis and often receive lender fees. The broker is usually paid by the buyer or lender. You can pay the broker with cash, rebates, or proceeds from your loan. The fees are added to your total amount.

thanks, john http://www.thejohnbeck.tv

[Bridget Dupont-Tingley, Editor, L.A.W.]

Hello Jacquie,

Your perception is accurate regarding real estate in West Michigan.

As we have often reported at L.A.W. over the years, the press and many of the head honchos in town are all the best of buddies, that means they put the sweet spin on even the worst case scenarios to help each other out. The movers and shakers in this town want to build, they got properties to sell, they have complexes to promote, they want more buildings with their names attached and so, the media is going to make things look as good as possible to help them get the job done. And they have. The average gal and guy on the streets see it much different. But, you won't see the other side very often in the local media.

Is it right? Probably not, but there is little you or I can do about it. The best we can do is be informed and educated on the issue. Just because someone is selling swamp land doesn’t mean you have to be a buyer.

As for condo living, I wouldn't buy the spin that it is the future of Grand Rapids real estate. This box like living has a trendy way of coming and going over the years as cities around the country develop, but single family home living will always be number one. There is a market for condos when it comes to singles, young professionals with no kids or retires who want to have downtown living at their doorstep. That’s fine if you fit this group. But, no matter how sweet the builders and developers try to package the product, there are plenty of negatives to go along with the positives. Above all, condos will not have the mass appeal, appreciation levels or buyer/seller pool as single family homes have had historically and will continue to have in the future.

So, as I noted in my article, if condo living is right for you, go for it. Just be wise. Make sure you pick a unit with an excellent view, in a top quality building, make sure your unit has all the bells and whistles so it stands out, try to buy 3 bedrooms/2 baths for maximum use now and for better resale later and don’t over-pay for what you want. Negotiate wisely on this purchase as you do all others. And, if for any reason you think you need to move in the next 12-16 months, don’t buy. Nothing is worse than trying to sell a condo not long after you bought it in an already bad real estate market and having to compete against builders and developers still putting up brand new units against you. You don’t need the headache, the competition or the possible financial loss. Buy and hold, at least for awhile.

Thanks for your input, it was a great question and one everyone should be asking.

Regards,

[Bridget Dupont-Tingley, Editor, L.A.W.]

Hello John,

Thanks for your feedback. We appreciate you reading our web site and finding it helpful.

You noted to our readers that before you sign papers it’s important to discuss fees. Signing forms, discussing fees, getting real estate numbers are indeed important. But, even before that stage it is import to remember the following: under Michigan law in regards to real estate, a relationship between an agent and a customer is established NOT by the exchange of money, but by the initiating of a business relationship. I.e., you walk into an office and say you want to buy/sell a home. An agent says they can help you. The two start discussing how. The relationship begins at that stage. It does NOT wait until money is discussed or exchanged. Also, agents work for licensed brokers in this state thus, the relationship ultimately goes back to the broker and their established company first and foremost.

In Michigan, agents are required immediately to provide a seller and buyer with a form called an Agency Disclosure form. It advises each party who the agent is representing (seller exclusively, buyer exclusively, transaction coordinator, etc.). This form helps to show a buyer and seller who is representing them and to what extent. It reminds each party to be careful about the level of information they give out and take in.

Brokers/agents do work on a fee program based upon commission. The final commission amount is negotiable by law (typically 6% or 7% on a single family house) and is determined by the seller and the listing agent at the time the house is marketed. The seller is ultimately responsible for paying the commission at closing of a sale to both the listing agent and the selling agent if this is the advertised means of selling (usually the total commission is split 50/50 in most transactions). It is not the buyers responsibility to pay this. Under almost no circumstances should a buyer be paying an agent for listing/selling services (unless they specifically contract for a buyer’s agent and a contract is set up for special fees for this service). Buyer’s agents are more common these days, but still not the norm.

The Real Estate Settlement Procedures Act (RESPA) is very strict about disclosing who an agent can network with and how they can receive outside funds (such as a referral fee for referencing a fellow title company, lender, etc.). A buyer/seller can reject such relationships set up in advance and not be required to use an agent’s preferred outside company. If a buyer/seller does work with a recommended firm, the RESPA helps establish the who, what, when and how much so, things are not hidden. It is set up to protect the best interest of the public at large.

Additional charges that can be incurred in a real estate transaction besides the traditional commission to agents for listing/selling services rendered are: mortgage company fees, title company fees, closing company fees, appraisal company fees, home inspection fees, stamp/transfer taxes to the state and more. Some of these charges are negotiable by law (who pays and how much) and will be discussed during an offer stage and be well planned long before a closing happens. In Michigan, it is usually the title company/closing office who prepares packages and handles the full closing. They will be the one to cut checks to the broker for proper commission distribution. With proper representation, both buyers and sellers should know what they are paying and to who well in advance of the final closing date. There should be no surprises when proper professionals are used in each category and in each stage.

Based upon your last two lines, I am guessing you are a mortgage rep. When you start talking about what can be rolled into a loan, we know which side of the table you are working from!

Thanks for your feedback.

Regards,

[Tom]

I think some of the above comments are missing the bigger picture here. Tax-incentives may seem unfair to those who are paying GR property tax, but those incentives are attracting new residents to the city. These residents (especially high-income earners), once downtown, are likely to spend more money there and bolster the economy. If the population of "young professionals" increases, there will likely be an increase in local restaurants, bars, coffee shops, etc., all things good for a city's economy. And as Bridget mentioned, the tax-exemptions aren't permanent; most will gradually disintegrate over the next 5-10 years.

I think Bridget is probably right that these condos are unlikely to attract families with children, but the fact is that young people are getting married and starting families later than ever, so the "young couples" probably won't be heading to the suburbs till the are closer to 30. If GR can offer quality housing Downtown, these young professionals will likely jump at the chance to be a part of "city living" and be an elevator ride away from the nightlife.

As far as the struggling economy (especially in Michigan), I would guess that the developers are banking on "Medical Mile" to provide much of the demand for Downtown housing. I have heard more than a few GR residents tell me that the goal of that development is to make GR the "next Mayo Clinic." If that turns out to be the case, GR is on the eve of an exciting time, so you can't blame developers from jumping at the opportunities of cheap, tax-free developments that should pay off as the medical school and research centers near completion.

As a soon-to-be young professional in Grand Rapids, seeing the type of city-wide development is exciting. There is probably more new construction downtown than in the rest of the state combined. It certainly seems that the City is doing something right, and I'd guess that we are close to seeing GR explode with growth, energy, and prosperity (to which the condos will be integral part).

[Bridget Dupont-Tingley, Editor @ L.A.W.]

Hi Tom,

Thanks for your thoughts and insight into this topic especially since you will possibly be joining those living and working in the downtown area one of these days.

I won't go over again all the pros and cons to condo living, that was covered earlier. I won't go over the pros and cons to tax breaks/abatements as I covered that earlier too. I also won't discuss if the condo boom is good or bad as I covered that as well. Instead, I'll simply refer readers to my entire article and all the comments/suggestions above.

Interestingly, you noted "Tax-incentives may seem unfair to those who are paying GR property tax, but those incentives are attracting new residents to the city." My answer here is yes, tax incentives do seem unfair to those paying property taxes already and yes, giving new residents tax breaks helps bring them to a place they might not consider otherwise.

In a way, GR has a form of income redistribution going on. Current homeowners pay the tax tab each year at continued rising rates. New condo owners pay little or none because the city and developers want them here and they will do nearly anything to get them here. Hmmm...who really wins in this scenario? I imagine those being lured to town with perks view this as a major gain for them. The city certainly likes it as eventually they will get more revenues as abatements run out. Those of us already paying top dollar year by year even when the market is in a downslide might not see it in quite the same favorable light.

Don't forget, many of us pay not only CITY income tax, but also PROPERTY taxes to GR. For those of us that do both, the bill is quite high for the privledge of living in this town. The glass doesn't feel quite as full for those of us who have been supporting this town for decades without perks and breaks. Understand?

You noted, "These residents (especially high-income earners), once downtown, are likely to spend more money there and bolster the economy." I would probably disagree a bit with you there. Between Bill and I we have lived a combined twenty four years in the Heritage Hill area and we spend just as much time OUT of downtown as we do IN downtown. We may eat or go out once in awhile downtown, but then we leave and go to other areas for meals, outings and entertainment in other suburban cities and towns as well. Sure, we patronize local bakeries, wine shops, ice cream parlors, mom & pop restaurants and the like to keep money in the area. But, just because you live downtown doesn't mean you will spend all your time there. I think that is a bit of a myth.

The reality is the downtown area still has quite a way to go in terms of bringing in more choices for real shopping, restaurants and bistros, entertainment complexes, gas stations, grocery stores, quick picks and pharmacies before you will get the masses to spend more time in downtown. Don't forget as the population grows and so does the congestion from increased autos, parking will continue to be an issue that needs to be addressed as well.

Downtown has it's charm. It has it's drawbacks too. We support a growing downtown provided it's done smart and it's well developed. Otherwise, we could build and they won't come as has happened to other places around our country. If Seattle, east coast towns and a mega hub like Ann Arbor can see big companies come and go, it can happen here too. AA2 is a great city and maybe one day GR can approach what they offer in terms of housing, education, medical establishments, sports and the arts, but we still have a long way to go to get there and we should be very carful in putting all our egss in one basket - the medical basket. Other cities did this and failed. We need to learn from them and be more careful.

As I noted earlier, if you buy a condo, buy SMART! I'd hate to get a follow up email years from now saying you bought a one bedroom, one bath unit without a premium view, in a minimal building and it overlooks power lines. You bought it easy enough years ago...why can't you sell it now? Buyer beware!

Thanks again for the thoughts!

Regards,

[Jeff H]

In regard to Jacquie's post earlier, developers are not building massive number of condo projects right now. Union Square is now pretty much finished and filled up pretty quickly because they were priced very competitively, and it was a pretty cool renovation project. River House was also priced pretty well for what you got, including interior amenities, and being the new tallest building downtown. It has sold pretty well. Icon on Bond is doing "OK" but not phenomenally, even with its Ren Zone status (which starts incrementally phasing in in 2009). The other projects that have been proposed have either had to go back to the drawing board, or scrapped altogether, due to lack of sales: The Fitzgerald, Tall House, 240 Ionia, Gallery at Fulton (old City Centre ramp site).

Hopson Flats, the new apartment project on Grandville Ave, is doing well because they have a creative new rental agreements that is very desirable for college students. The other relatively new condo projects on Monroe Center are doing well because they are small, unique, and the developers have begun to understand the price sensitivity in this marketplace.

All told, there are about 400 residential units under construction right now (check with the DDA). Even in our down economy, there are still probably 2000 - 2500 suburban homes being built this year, so downtown is still just a fraction of what is being built in the area.

The downtown condo market is not going gang-busters, but it is also not doing too badly considering.

Also, because of unique challenges inherent with urban parcels of land, including over-inflated asking prices and environmental contaminants, many of these projects would be impossible without tax credits, and they are good for the metro area as a whole, not just downtown. The entire metro area is judged by the vibrancy of its downtown, not by traffic jams or new SuperTargets on 28th Street. Is downtown condo living for everyone? Of course not. I agree with everyone else's comments that high-rise condo living doesn't appeal to families with young children for glaringly obvious reasons: space, schools, etc..

Sorry for the rant, but thought I would throw in my $.02.
Hope that helps!
Jeff

[Bridget Dupont-Tingley, Editor, L.A.W.]

Hello Jeff H.,

Thanks for adding your interesting $.02 to the earlier discussions. Your additional input is informative and well put.

As you mentioned many of the downtown sites located in or near the industrial corridor face the issue of environmental contaminants (ie., The Old Berkey & Gay Factory on Monroe we profiled here for years). Let's hope developers and investors at other places are doing a better job of either encapsulating/not removing at all or properly disposing of those contaminants they have found at their sites. The B & G project was an example of what NOT to do when trying to improve an area for growth.

I still contend condos have major plus and minus points. They are very easy to buy...often not so easy to sell and gain appreciation even in the best of markets. Buyer beware no matter what.

Thanks for reading our site and adding to the discussion at hand.

Regards,