BETTING ON MUSKEGON: Parkland Properties plans ‘flagship’ project at Watermark Center
by Kate Carlson
MUSKEGON — Parkland Properties President Jon Rooks felt a sense of obligation to purchase the former Shaw Walker Furniture Co. building in Muskegon, where the company now plans a $220 million redevelopment.
Parkland Properties plans to convert the 15-acre site with abandoned and blighted industrial buildings into a mixed-use development with 450 to 550 residential units and a range of amenities, as well as office space and retail.
“(The property) was on the market for quite a while and was marketed nationally, but I think national developers that are looking at Michigan would probably only do a project of this size if it was in Grand Rapids or Detroit,” Rooks told MiBiz. “We kind of felt we had to buy it almost as an obligation because we’re capable of redeveloping this, we’ve done it before, and we’re local. We thought it was important to have its ownership transfer because it was in foreclosure and it was for sale for a long time.”
Parkland Properties closed on the property at 930 Washington Ave. on Dec. 22 in a deal with New York-based P & G Holdings. The process moved quickly from the time Parkland Properties signed a purchase agreement to the time of the sale, since the buyer was motivated to close the deal before the end of 2022, Rooks said.
The Watermark Center was listed for sale for $12 million. Rooks declined to disclose details about the sale.
“This is going to be the largest and coolest project I’ve ever done in my life,” he said. “This was the largest furniture factory in the world at the time, then Steelcase became bigger as it closed.”
Previous ownership partially redeveloped the property into Watermark Condominiums, The Coffee Factory restaurant and 920 Event Center. However, more than 650,000 square feet of the buildings on the property remain blighted and vacant.
“This is an example of a project that needs every tool in the tool box in order to be developed properly,” Rooks said. “It’s important that it’s not viewed as one project. There are seven buildings there, so when incentives are considered, it has to be viewed as almost seven different projects; it deserves that kind of incentive package.”
The scope of the property will make the development a heavy lift, as will some increased environmental regulations, including closer monitoring of PFAS and asbestos, Rooks said.
“We’ve studied those remediation costs significantly before we bought the property and we know that the cost of doing the environmental cleanup, restoration work and more or less preparing the property for this project will be very expensive, to the tune of about $22 million,” Rooks said.
Despite the many upcoming challenges with the redevelopment, the building has structural integrity because of how it was initially built, which will give Parkland a “head start,” Rooks said.
The site redevelopment is important for Muskegon because it will rehabilitate a long-vacant building into much-needed housing, said Cindy Larsen, president of the Muskegon Lakeshore Chamber of Commerce.
“That particular building has been an eyesore for quite some time and the more Muskegon develops, the more it sticks out,” Larsen said. “We are also in need of housing options that include ownership as well as rental, and we need them at different price ranges, so this is perfect.”
The project takes shape during an active period of investment in the Muskegon area. That includes the nearby $250 million, 30-acre Adelaide Pointe project, which includes up to 220 luxury condos, potentially 200-250 apartment units, a marina, restaurant, retail, an event space and expanded trail access along the lakeshore.
As well, the $130 million Harbor 31 project down the Muskegon Lake shoreline includes a hotel, restaurant, retail space, marina, senior living facility, 30 single-family homes, a 134-unit apartment complex, and a 21-unit rental townhouse project.
Combined, the three projects amount to nearly $600 million in investment and could add more than 1,200 housing units to Muskegon.
The Watermark Center building currently includes 53 condominium units, 20 of which the previous owner sold. Parkland Properties’ purchase included 33 of the condo units, which the company will likely update, said Rooks, who noted the firm is determining whether it will rent or sell them in the future. Parkland Properties also is in the process of determining the number of condos versus apartment units for the project, with a goal of offering something for everyone, Rooks said.
“There is so much space in this building and it just gives us the opportunity to not pigeonhole our marketing efforts for just one type of buyer,” Rooks said.
That includes offering smaller, more affordable rental units and larger units with higher-end amenities. Rooks expects some tenants will rent or buy a unit as a second home, while others will use it as a primary residence. Some of the units will have a view of Muskegon Lake.
“We’ve been doing this for 20 years and we’ve learned that people don’t like to be pigeonholed in certain demographics together anyway,” Rooks said. “Empty nesters don’t like to just be around empty nesters, and young professionals don’t like to just be around young professionals.”
The development team plans to engage the community for feedback on what it wants in the project, he added.
The amenities at the Shaw Walker property will be similar to Parkland Properties’ other projects across West Michigan, which include the Boardwalk Condominiums, Union Square Condominiums, Cityview Condominiums and Monroe Terrace Condominiums in Grand Rapids; and Highpoint Flats apartments and Terrace Point Landing in Muskegon.
“The retail businesses are designed and handpicked to be businesses that are supported by the massive amount of residential units in the building and also will make the residential experience better to make it a live-work-play environment,” Rooks said.
These tenant-oriented amenities include hair salons, fitness centers, restaurants and spa spaces, Rooks said. The project also is in close proximity to the municipal arena and many other downtown attractions, which will make it a walkable, exciting place to live, he added.
“We see that there is a big demand and a continued demand to live in exciting, urban settings. Muskegon is definitely exciting, just like downtown Grand Rapids,” Rooks said, noting the Shaw Walker project alone would boost housing stock by more than 3 percent in the area. “That’s pretty significant.”
Parkland Properties also is considering an idea to turn the existing 11,000-square-foot event center into a bar or brewery.
“We already own event centers at the two hotels and convention center in town that we operate,” Rooks said. “Ideally, for this to be the best amenity for the future development, we’d love to find a tenant that would take all or part of that space and make it a really cool food and beverage entertainment piece.”
Larsen said she’s heard excitement that the large, abandoned buildings will now become a project that sparks community pride.
“Parkland has such a great track record in West Michigan, it gives us confidence that this is going to be a flagship project for our community,” Larsen said. “It’s complex in that others have attempted and failed, but we know if Rooks says he’s going to take it on, he’ll finish the project.”
History of success
Rooks founded Parkland Properties in 1988 and the development firm has completed a wide range of projects across West Michigan. In the 2000s, the company focused on redeveloping old buildings into condominium projects in Grand Rapids. Over the last 10 years, the company has evolved into developing more hospitality projects including hotels, banquet and convention centers with a focus on Muskegon, Rooks said.
Before the city was on the radar for most developers, Parkland invested in Muskegon in 2009, when it acquired the struggling Shoreline Inn Hotel & Conference Center via a loan default. Parkland went on to renovate the hotel and marina and reconfigured the restaurant into a large conference center.
In Muskegon, Parkland Properties also owns and operates the Delta Hotel by Marriott Muskegon Convention Center and Lake House Waterfront Grill, and played a role in the public-private partnership that funded and built the VanDyk Mortgage Convention Center. Parkland Properties now operates the center in conjunction with the Delta Hotel.
“Muskegon has more happening and has had more change than any other city from Chicago to Traverse City,” Rooks said. “It’s had more cranes in the air, more groundbreakings. It’s been changing rapidly ever since the paper mill was taken down and the mall was torn down in 2001.
“We’ve definitely reached the tipping point; the snowball effect is occurring. Until 2014, we didn’t really see anybody except local developers heavily invested in Muskegon, and since then we’ve seen out-of-town and out-of-state developers. It’s been a big change.”