Editor’s note: This article has been altered as attempts to reach Strathmore Development Company President Scott Chappelle were not up to proper journalistic standards.
City officials have moved forward with refinancing for a portion of the long-running City Center II project, extending its financial commitment to the project as the expiration deadline for its site plan approaches.
Officials made the decision to extend short-term financing for four parcels of property using bond anticipation notes, which now are set to expire in April 2015.
The parcels of property would be used for a parking garage for the $97 million redevelopment project, which would bring a hotel, theater and office and retail space to the area near the Grand River Avenue and Abbot Road intersection.
Including interest, the city is expected to pay more than $5.7 million to finance the four parcels of property using the new notes in the next three years.
The site plan for the project expires April 6, when a new site plan and special use permit would need to be submitted to the city to continue the project.
Strathmore Development Co. is charged with developing the project.
The city is scheduled to make two payments in 2012-13 and 2013-14 fiscal years and one payment in the 2014-15 fiscal year on interest for the parcels.
East Lansing previously owed more than $5.4 million in principal on the four parcels, a payment that would have been due April 1, but the refinancing pays off the city’s debt, Finance Director Mary Haskell said.
The city council had struggled with the issue of financing the properties earlier this year, with some council members arguing the parking garage might not be entirely necessary to the project.
At the council’s Jan. 31 meeting, Councilmember Don Power questioned whether the city even needed to continue to own the properties for the parking garage.
Given City Center II’s size and scope, Planning and Community Development Director Tim Dempsey said at the meeting that plans for the parking garage are geared to meet potential consumer demand.
In February, Dempsey said city officials started a “comprehensive review process” of the project’s financial status.
On Tuesday Dempsey said it’s not yet known when the results of the review will be presented to the city council.
East Lansing Mayor Pro Tem Nathan Triplett said the city council continues to cautiously move forward, and currently is waiting on the presentation of a financing plan from the developer.
“What stands between where the project is now and moving forward is the financing piece,” Triplett said.
In a previous interview with The State News, Strathmore President Scott Chappelle said in an email that the project has received all of the necessary financial commitments for completion.
“City Center will help attract desirable businesses to the downtown, generate much-needed jobs and create revenue for the local government,” he said in the email.
Across the project’s existence, it has struggled with issues ranging from the foreclosure of properties to overdue taxes.
Two Strathmore-affiliated groups paid off more than $9,000 in property taxes owed to the city on Feb. 13, one day before the deadline to pay taxes without penalty.
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Dempsey said the February tax payment was a step in the right direction, but only one hurdle to clear before the project can begin.
“There’s a lot of other questions that we’ll need to answer going forward,” he said in a previous interview with The State News.
