Thursday, October 1, 2020

Some abandoned buildings in E.L. Park District to be torn down this spring, others to have fate decided in court

March 1, 2016
Supply chain management junior Dante Assade walks on Feb. 9, 2016 on Abbott Road. Kendick was headed to class.
Supply chain management junior Dante Assade walks on Feb. 9, 2016 on Abbott Road. Kendick was headed to class. —
Photo by Kelly vanFrankenhuyzen | and Kelly vanFrankenhuyzen The State News

For Alexander Sprague, an employee at P.T. O'Malley's, the abandoned buildings across the street are "a huge eyesore."

 “It doesn’t look good for the whole city to have a block of dilapidated buildings with nothing going on for them than a bolt across the windows," Sprague said. "I hear rumors about plans every three months or so, but nothing has happened. I’d rather it be torn down and turned into a field than have that across the street."

The view from the P.T. O’Malley’s windows is a boarded up, vandalized and disintegrating old Citizens Bank building siting at the corner of Abbot Road and West Grand River Avenue.

The old Citizens Bank, however, is one part of an ongoing saga which encompasses three parcels of land in what is referred to as East Lansing’s Park District. The two prominent buildings involved in Park District are located in the 100 block of Grand River Avenue — the Citizens Bank building and the brown and white trimmed buildings adjacent to it located at Evergreen Avenue and Abbot Road. Those buildings have fallen into disarray with little more than a skeleton, which bares only unlit neon signs and a flaking “Thai Hut” banner.

Another building, a former small apartment complex located along Evergreen Avenue, has also fallen victim to the wear and tear of a financial and redevelopment battle.

But the decade-plus battle over redevelopment has hit a new stride, which might change the fate of the city’s blighted area. This spring, the city will be tearing down the parcel they own, 303 Abbot Road, which was formerly a small bank. The rest of the properties are in violation of the codes in the dangerous building ordinances, which means the buildings could be demolished pending the outcome of hearings on March 17.

History

Since 2003, the properties have changed hands multiple times with proposals for development coming and going.

The two were to be torn down and developed into a multi-use complex by the Park District Investment Group, or PDIG, which bought the properties off of Scott Chappelle in 2010.

East Lansing city manager George Lahanas said the project would have included restaurants on the lower floors, a higher-end hotel in the middle and apartments and condos on the top floors.

“It was actually supposed to be a pretty nice project,” Lahanas said. “It was going to be one big project, so the private developer was assembling land and the city was assembling land all to move into one project collaboratively. But then the project stalls and they have their land and we have our land.”

The city’s land happens to the small bank building adjacent to the Citizens Bank building. That building was used in the project put forth by PDIG and was to become an area for a parking structure connected to the hotel. The small bank building at 303 Abbot Road will be torn down this spring. A date for demolition has not been set.

Failures to pay loans by PDIG caused the buildings they held to be foreclosed on by DDR MV City Center, LLC, a real estate company located in the suburbs of Cleveland.

In a July 30, 2015 foreclosure auction, DDR won the properties when no one bid and then sold the properties to WGR Finance, a company based out of Chicago and operated by DRW Trading Group, but the selling was not without implications.

“Our understanding is that DDR conveyed the sheriff's deeds to WGR, so while WGR now has an interest in the property, it is subject to redemption by the prior owner,” deputy city manager Tim Dempsey said.

PDIG filed a lawsuit against DDR claiming the foreclosure sale was unlawful and sought to extend the redemption period to try and regain ownership of the properties it hadn’t paid loans on since 2010. DDR claims Michigan courts have no jurisdiction in the cases.

“The city was not going to be directly involved in construction of the PDIG project, however, PDIG was going to be seeking incentives for reimbursement of certain public portions of the project, namely infrastructure improvements,” Dempsey said. “Consideration of those incentives halted when the property entered foreclosure.”

Out of the foreclosure suit filed in Ingham County, Judge Joyce Draganchuk ruled in favor of DDR blocking PDIG from recovering the properties. The properties now are in the hands of WGR and DRW.

Going forward

DRW and WGR, however, haven’t commented on future redevelopment plans and when asked about the court rulings they issued a short statement via email, declining to answer media inquiries over the phone.

2016 value assesment of the properties done by the city: 100 Grand River (Citizens Bank): $976,000 100 Properties at Evergreen and Grand River: $1,190,600 300 Evergreen Apartments: $429,600

"We are pleased with the Court's recent ruling,” a representative of DRW said in a statement. “We look forward to working closely with city officials and the community of East Lansing on this project."

DRW declined to comment further on what future plans for the parcels they now own would be, leaving again the possibility for the buildings to lay dormant.

But after years of neglect to the buildings, the city has stepped in to alter the years of decay.

“We have given letters under our dangerous buildings ordinance to the owners and the owners are going to come in to meet with us to talk about how we can resolve that,” Lahanas said.

The dangerous buildings violations were issued in a series of letters by Glen Dempsey, East Lansing’s building and code administrator, to Tom Eckhardt of City Center Two Project LLC, DDR MV and WGR Finance.

In a letter issued on Feb. 1, Glen Dempsey outlined the violations of the Citizens Bank building.

100 West Grand River Ave., East Lansing

The building was found to be in violation of five subsections of the ordinance with charges including: the structure has been unoccupied and not listed for sale for over 180 consecutive days or longer, the buildings have been in such bad shape they are a “harbor for vagrants and/or criminals,” the interior of the building has become “exposed to the elements or accessible to entrance by trespassers,” the building is no longer safe for its intended use and has a door, aisle, stairs or passageway not conforming to the city’s code for safe exit.

In a letter issued on Feb. 12 concerning the brown buildings of the 100 block of Grand River Avenue, the parcels were found to be in violation of the same five subsections as the Citizens Bank building as well as an additional sixth violation. The extra violation reads, a “rear second story wood porch (wood stairs cut-off to prevent access) is in a state of disrepair and falling apart” and is also likely to fall and injure someone or cause damage to the property.

West Grand River Ave, East Lansing

In a letter re-issued on Feb. 26 but originally issued on Feb. 12, the former apartment complex at Evergreen Avenue was found to be in violation of the same five subsections of the code as the Citizens Bank building.

Evergreen Avenue

The city and the parties addressed in the letter will hold hearings in front of Thomas Lapka, the city’s dangerous buildings hearing officer, on March 17, at which time DDR, WGR and Eckhardt will have the opportunity to “show cause as to why the buildings should not be demolished, otherwise made safe, or properly maintained.”

If Lapka determines the buildings to be unsafe, the properties must be torn down if the cost of repairing the building would exceed more than 100 percent of the property value. The building would become “a public nuisance and ordered demolished without option of repair,” if those costs exceed value.

Glen Dempsey said there should be no problem in the building’s repair costs exceeding the value.

Without plans to redevelop the site, the buildings will be demolished and the empty parcels will be left for future plans.

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