Crain’s Grand Rapids Business Brief
- Grand Rapids’ riverfront amphitheater secures naming rights.
- Muskegon Lake project
- EV battery project investment
Mark Sanchez: Yeah, this is a big deal. Acrisure LLC. This is the big, now global insurance broker, FinTech here in Grand Rapids has grown incredibly over the last decade plus through mergers and acquisitions. It's been the biggest acquirer of insurance brokerages around North America for more than a decade and is putting $30 million into this riverfront amphitheater. It has about $184 million cost to the project. Acrisure acquired the naming rights, $30 million for this 12,000 seat, outdoor concert and event venue that's going to go up there on south end of downtown on Market Avenue. And this is a big deal, first because Acrisure, again, we've written a lot about this company over the years and how it's been growing and how the M&A it's done. And it's been a leading buyer throughout the U.S. of independent insurance brokerages. The company also built new headquarters there on the south end of downtown the last couple of years. And this is all part of now being that corporate citizen. It bought the naming rights and put $30 million into the project. And I should say this is just the latest situation where we've seen Acrisure buy naming rights and put their name on the side of the building of an event venue, or sports venue. The big one was last year when they bought the naming rights. Formerly Hines Field, now Acrisure Stadium, it's Pittsburgh, the home of Pittsburgh Steelers. They did something on a smaller scale at Van Andel Arena here. There's a new venue out in Palm Springs, California they bought into with naming rights. So, we're seeing Acrisure trying to build this brand name across the country through acquiring naming rights for sports and entertainment venues. And now of course, right here in its hometown, literally within the shadows of its corporate headquarters, it's putting $30 million to support this $184 million project for that riverfront amphitheater.
Patrick Center: We talk about the naming rights, $30 million, but those dollars actually are going towards design and construction. Breakdown $30 million and how Grand Action 2.0 plans to use it?
Mark Sanchez: Well, this is, again, there's still a lot of work to go. You know, Progressive A&E is the architect and plans to have the schematic designs finalized by the end of this month in Pioneer Construction and Barton Malow. They're going to lead the construction for Acrisure Amphitheater. Let's get used to saying that now. And that's expected to break ground in 2024 and slated for completion in 2026. This is funding that's going to go to the project and help pay for those design, architectural, planning costs and the way I understand it at least. Ultimately pay for that construction project along the river.
Patrick Center: What do you know about public dollars at this point? We know we're halfway to the private funding goal, but the public dollars, is that all in place or is that still being worked on by the folks at Grand Action?
Mark Sanchez: I think there's still probably a little bit more to do. The convention authority and arena authority has about a $24.3 million option agreement with the city to purchase the amphitheater site. There's another part of that expense, but there's also work going on to raise this money and raise the funding, raise the capital. I'm sure you'll see some requests go in toward the state and see if the legislature would help out. But there's about $114 million in public money that Grand Action 2.0 aims to secure to complete this project. And as the story by my coworker here at Crain's Grand Rapids, Kate Carlson, wrote last week, the group plans to raise that $114 million with the help of the state's transformational brownfield program. So that's a component of the funding plan is to raise that public money.
Patrick Center: Major riverfront development here. Major waterfront development on Muskegon Lake at the old Sappi Paper Mill site.
Mark Sanchez: Yeah, and anybody who's ever lived on the lakeshore, you're familiar with that site. That was a big, big employer in Muskegon for many years. It closed down several years ago, the paper mill, and now there's a project here. It's a 122-acre site. It's on the south shore of Muskegon Lake, near Lake Michigan. It's a sprawling site. And we're seeing Parkland Properties has acquired this and plans to do a large project there that could include hundreds of housing units, retail space, a marina, and a lot more. So, it's a major project in Muskegon that could really transform that whole Lakeside Neighborhood a little bit there in Muskegon. This is actually one of two major projects that Jon Rooks at Parkland Properties is undertaking. He's also looking to redevelop that old Shaw Walker Furniture Company site near downtown for similar uses. So good for Muskegon. It's bringing in investment. It's bringing in new investors and folks who are investing in the community, and we'll see where this project goes.
Patrick Center: We're talking with Crain's Grand Rapids Business Senior Writer, Mark Sanchez. The UAW strike looks to be impacting more than just the typical assembly lines. This is spilling over into EVs at this point. And in particular, we're talking about not just the factories, but other projects, battery development here in the United States. What are you hearing?
Mark Sanchez: Well, obviously we're going toward week three of the UAW strike that's been striking. We saw the Ford Motor Company announcement this week. It's going to pause the Marshall project for now. It didn't really put a whole lot of definition as to why, just said it's pausing that project. Here's a story, it actually comes to us from our colleagues at Crain's Detroit Business, Kurt Nagl, that looks at all of these incentives that the state crafted a couple of years ago, two, three years ago. Remember the announcement that Ford was going to do a major battery electric vehicle project in Kentucky and Tennessee, which offered a boatload of incentives. And that then raised the question, well, why not do it in Michigan? Well, because it's a little lower cost to do it down south. And as we've seen for the last 30 plus years, the Southern States will gladly take the manufacturing base here in the industrial Midwest. So, this story looks at just the incentives and asks the question is, yes, this is extremely costly to lure these battery plants. And there's one analysis that says, the auto industry is electrifying. And over the next decade, the automakers and battery companies will spend and invest $500 billion to $1 trillion into electric vehicles over the next decade. So, the question becomes, yes, Michigan is putting a lot of cost to luring these battery plants, the electric vehicle plants. That's a high cost, but what's the cost of not doing it? And that's been a question that Quentin Messer Jr. at the MEDC (Michigan Economic Development Corporation) has asked. Do we allow, as this industry goes through this massive transformation, do we allow all this to go south? And remember, you know, the auto industry still employs more than 600,000 people in this state. Does the industrial Midwest compete for these new jobs in electric vehicles that are being created over the next decade plus? That's a big question. Do you compete? Do you have to do these? How do you compete? Do you not compete? Again, what's the cost? The cost so far has been $4.8 billion in incentives to land these projects versus nearly a billion more than its Southern counterparts down south in the Southern States. So, these are big projects, these are big costs. But again, I'll just keep saying that everybody can make their own determination. What's the cost of not competing and offering these incentives for these companies to do this here in Michigan and the industrial Midwest, which has been the historic home for the industry and the supply base for generations.
Patrick Center: We should have at least an indicator here on the west side of the state and that's LG. LG has a lithium-ion battery plant in Holland.
Mark Sanchez: It has a large facility in Holland and it's been investing heavily in growing that. It's doing a major expansion down there in Holland right now. And that's one example of the tentacles that the auto industry has. Obviously, we don't build cars here in west Michigan, but we build a lot of parts that go into motor vehicles. All these. really terrific tier one, two, three auto suppliers based Grand Rapids, Holland, the Lakeshore and around this region. And they're all going to play into this. We're all going to build something. They're all part of the industry that has the supply chain, it's parts chain. And LG Chem's a big player in the Holland economy now. It has a lot of jobs there and the company has been investing heavily in that facility for an expansion.