Five more properties on the 600 block of Virginia Avenue are slated to be demolished before the end of the summer,pending the approval of the city's brownfield redevelopment plan.
The plan will provide $800,000 of long-term funding for the Virginia Avenue project which has a total budget of $5.2 million. City officials presented the plan, which outlines improvement of areas designated as blighted, to the City Council on Tuesday.
"We're at 80 percent now of all the properties we needed to acquire," Jim van Ravensway, East Lansing's director of planning and community development, said. "Eighty percent is the number we had to achieve to submit the final site plan to the planning commission and the City Council for approval."
The money generated by the brownfield redevelopment plan will be used primarily for infrastructure improvements. It will be generated through tax capture - as the value of the properties increases, the city will collect the difference in their increased taxable value.
"The value of the houses and the development on the lot after the project is complete will be greater than the value before the project is complete," City Manager Ted Staton said. "This brownfield redevelopment allows us to capture that difference in tax revenue."
The site plan will be submitted to the planning commission in the next few weeks and city officials are aiming to start construction in September, van Ravensway said.
The five properties to be demolished were declared blighted after they were vacated and the utilities disconnected, said Stephanie Gingerich, community development analyst.
"The earliest that we would hope to demolish the next five properties is late July or August of this year," she said.
The city is currently in negotiations to acquire the final six properties required to complete the project, she said.
"It may involve litigation, but the goal is to have a plan in place by the end of the summer," Staton said.
The City Council also approved a short-term funding resolution Tuesday.
The resolution allows Mary Haskell, East Lansing's finance director, to secure $2.5 million in short-term funding through three-year bond anticipation notes. These city-issued bonds will be paid off with the proceeds from the sale of Virginia Avenue homes.
The funding provided by the short-term bonds will be used to reimburse the almost $1 million the city has advanced from its General Fund for project expenses. It also will be used to fund any further action on the project until more monetary resources are obtained.
"It's a cash flow thing," Staton said. "We now have greater needs for the project than we have revenue for expenditures. We've bought all these properties, but we haven't been able to generate revenue by selling the lots to the developer."
