Deal to unleash $4 million redevelopment

Wednesday, August 23, 2006
By David Alexander
Chronicle Business Editor

It's taken Muskegon businessmen Gary Post and Russ Strong 17 months to finally close on a deal for three buildings on the downtown redevelopment site that was once Muskegon Mall.

They say it was worth the wait.

Post and Strong, through their Western Avenue Properties LLC, became the first new owners of former mall property Monday as they completed a deal for the "Russell Block" -- three historic buildings, including the former Muskegon Savings Bank, Century Club and Daniels Office Supply.

Post first publicly announced his company's intentions for downtown in March 2005.

Mall site owner Downtown Muskegon Development Corp. -- a consortium of the Community Foundation for Muskegon County, Muskegon Area Chamber of Commerce and the Paul C. Johnson Foundation -- has three other purchase agreements with owners looking to develop commercial and residential buildings downtown.

"Good things come to those who wait and persevere," said Post, the retired president of Muskegon Construction Co. and current chairman of the Muskegon chamber. "We think the timing is really good as there seems to be some pent-up demand to be downtown."

The long wait was caused first by DMDC's need to create "site condominium" documents that will direct the 23-acre, 20-lot urban redevelopment project years into the future. After Western Avenue Properties signed a purchase agreement in May, Post said his group had work to do before closing the deal, including an environmental assessment of the property on West Western Avenue just east of Third Street.

Western Avenue Properties within the next few weeks will begin the first phase of redevelopment of the 35,000 square feet of commercial space. The overall redevelopment cost for the "Russell Block" is expected to top $4 million, Post said, declining to disclose how much his company paid for the three buildings.

Western Avenue Properties has no specific tenants for the three buildings. However, Post's new Port City Construction and Development Services and Strong's Muskegon Office Interiors will lease space in the buildings.

Retail is expected in the bank and office supply buildings on the lower floors, and offices on the second. The Century Club is being slated for a restaurant and the third story of the Daniel's building could be turned into residential units, the new owners said.

"We know that this is the first of many exciting developments that will occur on this site and we think it is fitting that they begin with two people of the quality of Gary Post and Russ Strong," DMDC Chairman Chuck Johnson said. "The timely start and progress on the roads and sidewalks was key to closing this deal. We compliment the city of Muskegon and all of the contractors on the work they are doing to build a quality project."

Construction is continuing on the rebuilding of West Western Avenue from Third to Terrace streets, including a new traffic circle at Third and Western. New decorative sidewalks and streetscapes are part of the project.

Besides the "Russell Block," Downtown Muskegon Development has three other purchase agreements, said Dan Rinsema-Sybenga, manager of the Muskegon Main Street program.

The first is with Capstone Real Estate LLC and Ashton Development LLC of Grand Haven for the lot just west of the "Russell Block" on the northeast corner of Western and Third. Capstone is working with Clifford Buck Construction Co. of Muskegon to develop an office building that would be the home of the Muskegon chamber and Muskegon Area First, the economic development agency.

Another developer is seeking a lot on the east end of the "city center" site for 20 townhouses and a mixed-use commercial building. A third developer has a purchase agreement for the former National City Bank building across Western from the "Russell Block."

The residential and the National City building developers are not yet ready to publicly disclose their plans, Rinsema-Sybenga said.

"We are seeing serious, high-quality interest in the downtown sites," community foundation President Chris McGuigan said.

© 2006 Muskegon Chronicle. Used with permission