GRAND RAPIDS, MI - The Michigan Strategic Fund has approved a "fourth and final extension request" of its $3 million loan to Grand Rapids Downtown Market.

The extension, approved on Tuesday, Jan. 23, allows the urban market at 345 Ionia Avenue SW another four months to complete a refinancing of the no-interest loan it received from the state in 2013.

Downtown Market, which offers several restaurants and food vendors in addition to incubator kitchens and nutritional classes, was built with $15 million in public funding and $12 million from private funds. Financial results of the market's operations are not made public.

The $3 million loan was first restructured to delay principal payments in 2014 after the Downtown Market failed to land federal tax credits for the $30 million project and sought to borrow $500,000 for tenant improvements. It has since been restructured two more times.

"The project has been successful in completing construction, attracting tenants and bringing to fruition an attractive landmark in the city of Grand Rapids that is highly valued by its citizens," according to a staff memo supporting the loan extension.

"Despite these successes, the nature of the development partnership has changed and the development team had also underestimated the level of operating expenses that would be incurred annually to operate a market of this nature," the memo said.

"These changes have led the market's team to believe that the market would need to restructure its debt in order to maintain the level of services the market currently offers," the memo said, adding that the market hopes to restructure the loan into a 40-year loan with 1 percent interest rate.

Market spokesman Brian Burch said the market has been a success despite the request to restructure its loan. He noted the market has paid off $1 million from its original $4 million loan from the state.

"The Grand Rapids Downtown Market is operating as a fully financially sustainable organization," Burch said in a statement. "The organization has been successful in completing construction, attracting tenants, and bringing a new and highly valued landmark to the city of Grand Rapids.

"With the final extension of May 31, 2018, the market will work with MEDC staff to present a debt restructuring proposal at the MSF's February or March board meeting," Burch said.

"This will allow time for both parties to finalize and execute an amended agreement."