To fit 16" rims you need to fit smaller front brakes - not legal without an engineers cert and likely would not get agreement. Or pick an offset that clears the caliper. Again not legal because track will be increased too much. Grinding calipers is a 120 thing.
I hesitate to ask but why? Yes 16" tyres are a bit cheaper and you get more sidewall but all the rest of us manage quite nicely.
My 150 build - http://www.pradopoint.com/showthread.php?27423-A-Random-approach-to-a-Bluestorm-150-GXL-D4D-automatic
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