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Park District Buildings might become hotel after demolition

April 26, 2016
<p>The blighted buildings on Grand River Avenue&nbsp;that have remained an eyesore in East Lansing's park district for several years.&nbsp;STATE NEWS FILE PHOTO&nbsp;</p>

The blighted buildings on Grand River Avenue that have remained an eyesore in East Lansing's park district for several years. STATE NEWS FILE PHOTO 

At the conclusion of the hearing on April 20, East Lansing City Council member Erik Altmann got up out of his chair and shook hands with City Attorney Thomas Yeadon, telling him "good job." Yeadon smiled, said "thanks" and went down the line, shaking hands with other city officials.

Months earlier during his campaign and run up to the City Council elections, Altmann ran on the issue of ridding “blight” from the corner of Abbot Road and Grand River Avenue. The city moved a step closer on Wednesday morning to realizing his goal.

After a decades-long saga, the City Center II, or Park District Buildings, must come down by Dec. 31 per terms of a tentative agreement reached by the City of East Lansing and WGR Finance, LLC.

WGR came into ownership of the buildings when it purchased them from DDR MV City Center, LLC, a real estate company located in the suburbs of Cleveland that won them out of a foreclosure lawsuit earlier in February of this year. DDR foreclosed on the prior owners, Park District Investment Group, in the summer of 2015.

WGR, however, is owned by DRW Trading Group, a Chicago-based trading company with a real estate arm that formed in 2009. The hearings were held following a city inspection of the buildings, which were deemed to violate the city’s dangerous buildings ordinance multiple times.

WGR neither denied the state of disrepair or contested the city’s findings in the violation notice sent to WGR. WGR also agreed to patch up pressing safety concerns and demolish the buildings by Dec. 31.

What will go up in their places is unknown, but plans for a hotel might be in the works.

East Lansing Mayor Mark Meadows said no plans had been laid forward for the area, but city officials met with representatives of WGR and DRW in February and a hotel chain representative was present for the meeting.

Meadows further expounded and said he speculates “we’ll see a plan with a hotel component.”

Later that week, City Manager George Lahanas confirmed the city had conveyed to WGR and DRW representatives that a hotel was among wants of the city per surveys from residents.

A quicker demolition could be in the works, however, if WGR is able to retain state tax credits awarded to the properties years ago.

“The demolition will occur earlier, potentially within 90 to 120 days of approval of the MEDC tax credits that are being sought and preserved from the prior ownership of the buildings,” Yeadon said at the hearing. “If that can be secured and approved, the owners are indicating that they will demolish the buildings within 90 to 120 days of that date.”

WGR has yet to lay forward any plans for the sites, but approval of those potential redevelopment plans and retainment of the tax credits would quicken the demolition process by months.

The city plans to help if possible with retaining tax credits.

“We’re going to, if we can, agree to assist them to the extent we can with the preservation of those tax credits,” Yeadon said at the hearing. “Obviously I can’t bind City Council to any types of approvals or anything of that nature.”

City Council now has the task of reviewing any proposed plans laid forward by WGR. Approval of the plans will come in the form of public hearings, where residents can voice their opinions regarding the situation.

City Council ultimately has the power to approve plans for the Park District area. Residents in the past have blamed previous city councils for allowing the buildings to remain dormant for so long, as plans for the area fell through.

It remains to be seen what the council will do following WGR and DRW’s plans for the area. Prior plans for the area included a multi-story, multi-use building with housing and commercial space.

DRW’s website lists samples of its real estate projects in campus towns with two student housing buildings called HUB at Columbia, which is located at the University of South Carolina, and HUB at Tucson, which is located at the University of Arizona.

DRW wouldn’t comment specifically on plans for the area last week. but issued a brief statement to The State News.

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"We continue to work closely with city officials and the community of East Lansing on development plans for this property," the statement reads. "The agreement to demolish buildings that are in disrepair is an important step, and we are pleased that the project is moving forward."

An attempt to receive comment on speculative hotel plans went unanswered as of Tuesday.

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