City Council Recap: Disagreements About Line Shack Sale, $1 Riverwalk Lease

Lowell City Council held two meetings on Monday night. The first was a joint meeting with the Lowell Light & Power Board at 5:30pm to discuss the sale of a former line shack building at 115 Riverside Dr. After that, the council convened for their regular meeting at 7pm. All councilmembers were present for both meetings.

Recap of Line Shack Activity

Lowell Light & Power has been trying to divest itself of a former line shack building since 2019. While the building, located at 115 Riverside Dr. is considered an asset of the utility, the city holds ownership. That means it cannot be sold without approval of Lowell City Council.

In January 2020, councilmembers approved putting the line shack out for bid. While the LLP Board had requested that a minimum bid of $100,000 be required, the city did not include that language in their request for proposals. One bid for $76,000 was received.

The LLP Board asked Lowell City Council to reject the bid and issue a new request for proposals. They noted their minimum bid request had not been met, the property had not been marketed extensively, and the COVID-19 pandemic had undoubtedly played a role in the few numbers of bids received.

During a June 2020 meeting, councilmembers decided to accept the bid over the objections of the LLP Board. It was later discovered that a second RFP notice had not been published, and the sale could not legally be completed.

In April 2021, the council agreed to again put the line shack out for bid. Although not legally required, councilmembers decided that they would like bidders to present their ideas for the property so they could select the project that best met the needs of the city.

Six bids were received, with the highest bid being $118,000. At a September 2021 meeting of Lowell City Council, the issue of parking was raised for the first time when a nearby business owner – who had also bid on the property – suggested the council consider the parking needs of each proposal when making its selection.

In October 2021, the council selected a proposal from BGR Investments LLC for a mixed use building that would include covered parking on the first floor, retail space and five residential units.

That purchase agreement was terminated in June 2022. Since Lowell City Council discussed the matter in a closed session, there is no public record as to why the purchase agreement was cancelled. However, in earlier meetings, some councilmembers had expressed frustration that BGR Investments required state grant funds for their project and those necessitated a local match.

A third RFP was sent out for the line shack, and in August 2022, councilmembers reviewed the bids, Five bids were received with the high bid being $150,000. After listening to presentations, Lowell City Council voted to accept the low bid of $100,000 from CopperRock Construction which submitted plans for a six-story residential property of up to 17 units.

Public response to the proposal was overwhelmingly negative, with many citing parking concerns, and councilmembers opted not to go through with the sale. The LLP Board has recommended that the council accept the high bid of $150,000 from Greg Canfield for an expansion of the Main Street Inn.

At their first meeting in October, councilmembers voted 3-2 in support of Canfield’s bid. A resolution has been drafted for the sale, and it will be brought before the council at its next meeting. But unless the resolution receives four votes, the property cannot be sold, per the city charter.

Joint Meeting with LLP Board

Monday’s joint meeting with the LLP Board was apparently held at the suggestion of LLP Board Chair Perry Beachum. He started off the meeting with his comments and then all members of the LLP Board and Lowell City Council followed with their own.

“I don’t think it’s the responsibility of the council to decide what is to be built on the property,” Beachum said. He noted that CopperRock Construction had almost immediately made changes to their proposal after their initial presentation, which seemed to negate the purpose of councilmembers reviewing development plans. He thought the council should select the best bid and then allow the property zoning to dictate what goes on the site.

Beachum said the LLP Board felt the Canfield bid was best for the following reasons:

• It was the highest bid.
• It was a cash offer with no contingencies.
• Parking requirements for an inn would be less than for a multi-story residential property.
• Canfield has a proven record of completing projects in Lowell.

“I think CopperRock is a great company that does beautiful work,” Beachum says. However, he felt the fact that Canfield bid $50,000 more with no contingencies made it the better offer.

Other LLP Board members echoed those comments and added their desire to quickly sell the former line shack building. “I want this off our docket,” said LLP Board Member Tina Cadwallader. “I’m sick of it.”

Councilmembers seemed more inclined to send out the project for a fourth RFP though. Councilmembers Leah Groves and Cliff Yankovich were the two councilmembers who voted against selling the property to Canfield, and both lamented the loss of the CopperRock development.

“I think we’ve lost a really great opportunity,” Groves said. “It shows our inability to make good decisions.”

Meanwhile, Yankovich said he regretted changing his vote on the CopperRock proposal in response to citizen concerns. He said resident comments about parking should not have been directed to the city council. “Parking issues should have been addressed by the Planning Commission,” he said.

“The process sucked,” Yankovich went on. He said CopperRock was “blindsided” at the meeting when citizens expressed opposition to their project, and if given the opportunity, they could have produced people to speak in support of their plan. “There is support in the community for a multi-story building,” Yankovich said.

Mayor Mike DeVore was the only councilmember to speak in support of Canfield’s proposal. “I think the continuation of a business that brings people to town is a good thing,” he said. He also added that he didn’t see the point of sending out a new RFP when there were other viable bids available from the previous RFP.

Rate Increase Could Be Affected by Sale

Councilmember Marty Chambers said he didn’t see where taxpayers made money off selling the property to Canfield, echoing earlier comments from Yanovich about his belief that the CopperRock proposal was most lucrative for the city and LLP.

LLP General Manager Charlie West said that regardless of what is built at the site, the financial benefit to the utility will be “immaterial” in context of LLP’s overall revenues. His bigger concern was that the property be sold quickly.

“Right now, our ratepayers are carrying the liability [of the building] while the council decides what to do,” West said. He added that LLP had counted on money from the sale when determining its 2023 rate increase.

“This is half an annual rate increase,” West said, noting that the last few rate increases have generated an additional $250,000 in revenue. If the line shack is not sold by the end of the year, that could change the next increase. Although West did not have exact numbers in front of him, it was estimated that failure to sell the property could mean a 1.5% increase in rates.

Near the end of the conversation, City Attorney Jessica Wood commented that everything the city council was doing to select a project was not required by the city charter. “It’s gotten very complicated,” she said. Rather than trying to hand select a project, the council could “just focus on the objective criteria and then let the planning commission do their job.”

Canfield was also in attendance and made remarks at the end. “I feel like I’m public enemy No. 1 with a couple people,” he said before outlining the many projects he has completed in Lowell. He also noted that a developer had recently pulled out of a major project in Grand Rapids, and he felt it might be difficult for the city to find companies to redevelop the line shack should the economy worsen.

“I would urge you guys to pick someone and get it over with,” he said.

The joint meeting ended at 6:28pm. The resolution to sell the property to Canfield will be before Lowell City Council at its November 7th meeting.

$1 Riverwalk Lease Questioned

At 7pm, Lowell City Council convened for their regular meeting which had a long agenda but generated relatively little discussion. A proposal to extend the Flat River Grill’s lease of a section of Riverwalk for 10 years generated the most conversation.

The lease calls for the restaurant to pay $1 to use the section of the Riverwalk where its semi-enclosed patio is located. The restaurant also must insure and maintain the space.

“I would hope you would table this for another meeting,” Beachum said, addressing the council as a resident. He noted that youth sports pay a fee to use city fields, and residents pay a fee to reserve pavilions in parks. “I just don’t see it as equitable for a for-profit company to have a 10-year $1 lease,” he said.

Yankovich disagreed, pointing to the fact that the city allowed restaurants to set up tables in parking lots during the COVID-19 pandemic. He also did not think the patio impeded traffic on the Riverwalk and noted that there was nothing to mow, unlike city parks which have grass to be maintained.

“I look at it a little differently,” Councilmember Jim Salzwedel said. “They are making some decent money out there. I think it could be a little more than $1.”

Chambers noted that Flat River Grill has always been supportive of community events and doesn’t ask for recognition. He was supportive of the lease.

“I had to pay a $25 event fee for a one-day event [on city property],” said Beryl Bartkus, co-owner of Ability Weavers. “It does seem unfair.”

Resident Susan Stevens also approached the podium to note that Grand Rapids charges restaurants who use sidewalks and public space for tables. Wood replied that Grand Rapids did in some cases, and it was a low amount.

Yankovich made a motion to approve a 10-year lease of the Riverwalk section to Flat River Grill for $1, and Chambers seconded. It passed 3-2 with Yankovich, Chambers and Groves voting yes and DeVore and Salzwedel voting no.

Other Meeting Items

Other agenda items from Monday’s regular city council meeting included the following:

• Unanimous approval of switching to the West Michigan Health Insurance Pool for employee health insurance. The move could mean up to a 26% increase in costs compared to the city’s current coverage, according to a slide shown during the meeting, but City Manager Mike Burns said making the switch would provide employees with significantly better insurance and would minimize future annual premium increases.
• Unanimous approval of a tax abatement resolution for King Milling.
• Unanimous approval of a change to the city’s fire ordinance to bring it in line with the International Fire Code.
• Unanimous approval of a $17,000 repair to a lift station pump. The repair was needed after the pump sucked up a cord which allowed water seep inside the pump’s mechanisms. The cords on other pumps have been adjusted to ensure a similar incident doesn’t occur in the future.
• Unanimous approval of $21,500 for engineering work that needs to be completed prior to roadwork on Gee Drive which is scheduled for this fall.
• Unanimous approval of $46,200 to replace the grandstand roof at Recreation Park and two pavilion roofs at Creekside Park with metal roofing.
• Unanimous approval of adoption of new flood maps in the flood ordinance.

The meeting adjourned at 8:13pm, and the next regular meeting of Lowell City Council will take place on Monday, November 7, at 7pm.