Redevelopment project approved for old Taco Bell building
A project to redevelop the site of the old Taco Bell building at 565 E. Grand River Ave. was unanimously approved at the Sept. 15 East Lansing City Council meeting.
The approved proposal came from East Lansing developer David Krause's Stonehouse Village VI LLC.
Douglas Cron of East Lansing-based Cron Management LLC is also part of the development.
The site plan for the project includes a five-story mixed-use building with 6,745 sq. ft. of commercial space on the first floor and a mix of one, two and three bedroom apartments on the upper floors.
There will be four one-bedroom units, 16 two-bedroom units and 16 three-bedroom units for a total of 84 beds in the building.
The new building will reflect design elements of the Broad Art Museum and compliment, rather than detract, from the world class architecture of the building, according to city records.
Although the site plan was unanimously approved, the brownfield plan for the development was not. A brownfield plan is a specific type of tax increment financing or TIF used as an incentive tool by cities to assist with certain costs associated with a redevelopment project because they are often more costly than building a new development on a previously undeveloped site.
Council voted 3-2 to approve the brownfield plan with council members Ruth Beier and Kathleen Boyle opposed.
According to the city's website, the most commonly used TIF in East Lansing is a brownfield, which allows developers to gain back money lost from costs such as demolishing old buildings or cleaning up contaminated soils on the site of old developments.
Through a TIF plan, the developer of the project makes infrastructure improvements at their cost and is reimbursed for those public improvements through tax dollars their project creates, which would usually go to the city or other taxing entities.
According to a memorandum sent to City Manager George Lahanas from Lori Mullins, Community and Economic Development Administrator for the city regarding the brownfield plan for the project, "the total tax revenue from this project that would be reimbursed to the developer for eligible costs will be up to $1,521,880."
In addition, "outside of its new debt millage revenue, the City will realize only 10% of new real property tax revenue from this project through the duration of the BRA plan," according to the same memorandum.
“The TIF (brownfield) proposed here is a relatively small portion of the $8 million cost of this project," said Mayor Nathan Triplett regarding the brownfield plan during the council meeting. The mayor was in favor of approving the plan.
"The vast majority of the cost of this project, is as it should be, being borne by the developer."
The property qualifies as a brownfield site because it is both a facility (contaminated site) and the building has been designated as functionally obsolete.
The brownfield eligible expenses relate to site preparation including demolition, soil remediation, foundations, as well as public improvements including plaza and streets-cape construction and the development of a shared dumpster enclosure, according to the city memorandum.
“It’s really reimbursing for the brownfield costs, it’s a shorter time, and it’s (the development) on a key corner," said Mayor Pro Tem Diane Godderis, who voted in favor of the brownfield plan.
Goddeeris said it is important as a council member to look at the city as a whole and not just the money concerning one project when making decisions.
The start date for construction of the project has yet to be set.