Harbor Bay Real Estate has been issued two notices by the city, citing their decision to rent to tenants under the age of 55 at Newman Lofts was a violation of the City Zoning Ordinance and their Master Ground Lease, according to East Lansing City Manager George Lahanas at Tuesday’s City Council meeting.
The real estate management will have 60 days to correct this violation, in accordance with the time allotted in the Master Ground Lease to correct any defects.
At the Sept. 15 City Council meeting, Vice President of Governmental Affairs and Public relations Steve Willobee confirmed to council four units had been rented with no residents age 55 or older.
According to the Master Ground Lease, a failure to comply with any term of the lease and a failure to amend any such defect within 60 days of the written notice is defined as an “event of default,” granting the city the option to pursue any remedy available at law or equity.
Because the lease specifies a need to comply with all city zoning ordinances, the failure to do so constitutes a violation of that term of the lease.
Lahanas said the news that the city’s 55+ project had been renting to individuals outside that age range was surprising and disappointing.
“I have been involved in this project since its infancy I would say," Lahanas said. "I think it’s a great and exciting project, and I think it’s come out well. I think the project should stay 55+ — that’s how it was envisioned, that’s how it was showed to the residents of East Lasing and that’s what all of the participants, including the city bargained for."
Harbor Bay Real Estate Advisor CEO Mark Bell spoke out against the city’s decision to uphold the age restriction on Newman Lofts on Aug. 27, stating they were prepared to resort to legal action if an agreement was not reached.
When Willobee addressed council at their Sept. 15 meeting, he said when they opened last fall they knew the timing would not be optimal for residential leasing and anticipated leases would fill up more in the spring and summer.
As of Sept. 15, Willobee said they had been able to lease 25 of the development’s 91 units, including the four leased to those under 55.
In a letter the city received on Aug. 27, Foley & Lardner LLP — the law firm representing Harbor Bay in its ongoing dispute with council — said the area surrounding Newman Lofts "has gained national attention and notoriety as the site of rampant community spread of COVID-19."
Even if Harbor Bay could somehow lease to their marketed age range, doing so would pose heightened risks to the community with those 50 years or older accounting for 48% of Michigan COVID-19 cases and 94% of COVID-related deaths, the letter said.
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