GRAND RAPIDS — A Chicago-based real estate firm has proposed a $26.1 million, 167-unit apartment building near downtown Grand Rapids.

3F Properties LLC’s proposal at 470 Market Ave. SW — just south of Wealthy Street near the Grand River — contains 210,000 square feet in a three-story former commercial building that encompasses 2.25 acres. 3F Properties is a real estate development company that focuses on multifamily projects in “transitional areas” just outside of urban cores.

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“It’s an adaptive reuse of the building,” said Mike Obloy, principal at 3F Properties.

The Grand Rapids Downtown Development Authority today approved a 10-year obsolete property rehabilitation exemption for 3F Properties. This effectively freezes the property’s taxable value for 10 years, allowing the developer to complete the project without having to pay full property taxes.

Tim Kelly, president and CEO of Downtown Grand Rapids Inc., said the amount of foregone revenue resulting from the exemption would be $1.24 million.

3F Properties is also requesting up to $5.01 million in brownfield eligible activities, including an environmental site assessment, demolition, lead and asbestos abatement. The project as proposed is permitted without the approval of the city’s Planning Commission because it falls in line with the city’s master plan. It will go before the city’s Brownfield Redevelopment Authority on March 25.

The building will consist of studios, one- and two-bedroom market-rate apartments ranging in rents from $1,100 to $1,700 and 462 to 910 square feet. The building will have 106 parking spaces on the lower floor as well as immediately across Market Avenue.

“We try to match the size of the units based on affordability to have the ability to capture as many of the renters in the community as possible without pricing out ourselves or the renters,” Obloy said.

Members of the Downtown Development Authority emphasized that the developers — who have not yet engaged the community — begin interacting with residents and organizations that have been doing work in the area for years. DDA member Jen Schottke recommended knowing the neighborhood and its “trepidation” about developments.

DDA member and Kent County Commissioner Jim Talen questioned whether a project like this would happen without tax incentives.

“The idea is ... you bring development to a certain point so it can kind of happen on its own,” he said. “When do we get to a point where we don’t need this public assistance to incent the private sector to do this work?”

Obloy said 3F Properties has been working with Mt. Pleasant-based KMG Prestige Inc. for property management, and Kentwood-based Rohde Construction Co. Inc. for the construction of the project.