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2016-17 development projects and what lies ahead for East Lansing

April 27, 2017

The Park District project has taken a major step toward completion after months of back-and-forth uncertainty, capping off a period that, while volatile, has shaped the future of East Lansing's downtown development.

This academic year began with a positive step for the long, drawn out Park District project, which has changed hands between developers twice and has been ongoing for more than a decade.

The developer and city demolished a pair of buildings on Evergreen Avenue and Abbot Road in July and August respectively, inching ever closer to finally remove the blighted buildings that have plagued the western stretch of downtown for over a decade.The current developer has been commonly referred to as Convexity Properties, but is now referred to as 100 Grand River LLC and 341 Evergreen LLC in recent documents.

An initial deadline for the remaining buildings to be demolished was set for Dec. 31, 2016, but was extended at the developer's request in pursuance of a $10 million Michigan Business Tax credit.

Council approved Park District's then-site and brownfield reimbursement plans Jan. 10, but a last-minute change in the financing agreements by council prompted the developer to redesign the project.

Development projects are typically financed through tax increment financing plans, commonly referred to as TIFs.

A TIF, agreed to via a brownfield plan, allows a developer to capture a percentage of a development's property tax revenue through a certain period of time. This money is intended to reimburse the developer for public improvements made as part of the project the city would otherwise be liable to pay for.

The developer's initial brownfield plan called for 100 percent of the development's property taxes over a 23 year period, with 5 percent interest.

Council insisted on a TIF that would allow some property taxes for the city, even during a longer period of time, adamant on attracting more revenue to alleviate its budgetary woes.

"We can't incur debt for a new development, we're better off with no development than incurring more debt," Mayor Pro Tem Ruth Beier said at the time. "The TIF that we proposed is all that we can afford, and if the developer needs more money than that to do this development, then we can't do this development. There's not really a lot more room to do anything about that."

The approved TIF called for 80 percent of the development's property taxes through a 30-year period with no interest, which attorney David Pierson said was not financially viable without the interest included, according to the Lansing State Journal.

"The project cannot go forward under the plan that was passed through," Pierson told LSJ. "It's not feasible."

The developer took Park District back to the drawing board. Meanwhile, local business owners Brad and Greg Ballein and developer Harbor Bay Real Estate Advisors announced the Center City District project for a nearby segment of Grand River and Albert Avenues.

Read more at statenews.com

The project calls for two 12-story structures, one to be built on the block of Grand River Avenue between but not including Urban Outfitters and Lou & Harry's, and another on Albert Avenue "Parking Lot 1", the lot across from HopCat.

As of the most recent plans, the Grand River building will contain 271 market-rate apartments and a major retail tenant on the first floor, later announced to be a small-format Target store. The Albert building will contain first floor retail space, five stories of parking garage and six stories of 55+ apartments.

The Ballein family owns Student Book Store and serve as landlords for several East Lansing properties as Ballein Management. Several Ballein tenants have or will be relocated in preparation for the Grand River building's demolition. Noodles & Company and Sundance Jewelers have found new locations.

Soon after the introduction of Center City District, new plans were submitted for Park District, and the two projects have moved side-by-side through the approval process since.

At the April 12 East Lansing Planning Commission meeting, the commission voted unanimously to approve the new Park District site plan, but also voted to postpone consideration of Center City District's after a grueling five-hour session.

"The public will want to hear from all of us about why we do or do not support this, and I just don't feel, at 12:30 the day after our meeting started, that I'm in my best frame of mind to offer my most complete thoughts," Planning Commission Chair Laura Goddeeris said.

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At Tuesday's council meeting, council voted unanimously to approve Park District's updated site and brownfield plans. Both council and the developer have said they're confident about the project as planned, and unless the developer's bid for the $10 million tax credit is rejected, demolition of the blighted buildings might begin as early as this summer.

"I don't think I could've designed a better project if I were in charge completely," Beier said. "I can't tell you how happy I am."

Center City District is set to be heard once more at tonight's 7 p.m. Planning Commission meeting. Both developments should continue through the approval process into the summer.

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