Friday, March 29, 2024

Council needs to admit City Center II failings

After more than 10 years of planning, investing and developing, it looks like City Center II might finally die.

And not the quick, painless death that it needs, but rather the slow, drawn-out death that everyone was expecting. In a way, the project has been on an artificial respirator of finance extensions for months.

Now that several parts of the City Center II, the $116.4 million 10-story project that would have been the home of apartments, a theater and several shops on Abbot Road and Evergreen Avenue, have gone into foreclosure, the city needs to be held accountable for failing to see the writing on the wall and the red flags along the way.

The city has tenaciously defended its decision to go with Strathmore Development Company — City Center II’s major developer — since the beginning. But the city has missed too many opportunities to regroup, re-evaluate or just start over. And Strathmore has, again and again, shown itself to be untrustworthy for such a massive development.

For one, a Bonita Springs, Fla., redevelopment owned by Strathmore hasn’t even begun. Also, the company is responsible for a Broadway Village project in Ann Arbor that has been stalled for years. Strathmore has completed a Bear Creek, Mich., development — but it’s since gone into foreclosure, aggravated by problems of an ongoing lawsuit between Strathmore and the township. For the Bonita Springs, Bear Creek and City Center II projects, Strathmore owes significant delinquent taxes, some even dating back to winter 2000.

We understand the economy is not in great shape, and many of these developments were planned before the recession, but none of this screams “trustworthy developer.”

We don’t doubt the city did “stringent” research on Strathmore, as its officials have said, but isn’t there a line where, despite unavoidable economic setbacks, the city should have pulled the plug and moved on? Are four, and possibly five, financing extensions really reasonable?

It has become abundantly clear in recent weeks that Strathmore is incapable of holding on to these now foreclosed properties. And now, City Center II is almost sure to fail if Strathmore can’t get the money it needs for these assets. The present delays simply have become unreasonable and unacceptable.

There should have been checkpoints along the way that allowed the city to slow down and reconsider whether this was the right use of the land, the right developer for the job and the right use of funds.

And although City Manager Ted Staton has said the city plans on pushing forward to build a parking structure, that only brings up the question of whether one is even needed. The necessity of the parking ramp was exclusively tied to Strathmore’s promise of building more shops and apartments. If the city insists on moving forward with this structure, as Staton has said, they should only do so if they can prove it would be worthwhile and not out of a stubborn attitude to make something happen at that property.

East Lansing city officials should further realize that they no longer can continue to ignore their primary economic booster: students. For example, the City Center II apartments were not primarily intended for students, but rather for older, wealthier professionals with rent about $600 to $700 per person per month. For better or for worse, this city is built around a university, and the City Council can’t ignore that and continue to push students away from downtown.

City officials have further betrayed public trust by threatening eminent domain on certain properties whose owners were resistant to selling. And although the city has been adamant that at no point did they “consider, threaten or mention” eminent domain, The State News has sufficient documentation from property owners that contradict the city on that fact. This simply exacerbates the already pervasive problems that have accompanied City Center II since its inception.

Looking at these facts, we can come to no other conclusion than either the city has been dishonest to its citizens and the media, or simply clueless in how it has dealt with this entire project. Either way, city officials need to admit they have made mistakes.

We are not saying the city should scrap all plans for developing the properties, but in the future it should be done in a responsible and accountable way, with consideration given to both the East Lansing community and MSU students.

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