Center City District Public Hearing Postponed; Target Store Announced

Friday, April 14, 2017, 3:36 pm
By: 
Alice Dreger

Above: HopCat as seen from the exit to City Parking Lot #1.

East Lansing’s City Council is postponing its public hearing on the Center City District proposal, which had been set for next Tuesday. The hearing is now set to take place May 9. This is in response to Planning Commission not having made a decision this week on whether to recommend the project to City Council. The project continues to be controversial, as described in more detail below.

Meanwhile, City staff have sent out a press announcement on the news that the developers have attracted Target store to the project. According to that announcement, “The downtown East Lansing location would be one of a number of smaller, flexible-format stores that the company has opened in recent years in downtown urban markets and near college campuses across the country.”

“We are pleased that Target has selected downtown East Lansing for its first smaller, flexible-format store in Michigan,” East Lansing Mayor Mark Meadows is quoted as saying in the City’s press release. “We believe the store will be a great addition to the downtown, adding a new dimension to the retail offerings already available and meeting the needs that have been voiced by community members during past planning charrettes and workshops.”

East Lansing’s Downtown Development Authority (DDA) Chair Peter Dewan also provided a statement for the release: “I am thrilled that a national retailer such as Target is investing in the East Lansing community. Their investment will offer students, year-round residents and those working in and around the downtown area with convenient shopping options.” He added, “I believe other national retailers will take notice and also conclude that East Lansing, the home of Michigan State University, is an attractive community in which to do business.”

The City’s announcement came just hours before the City’s Planning Commission was set to take up the proposal at its meeting this past Wednesday. Developer Mark Bell of Harbor Bay Real Estate Advisors told the Commission at that meeting that there will be a grocery in the Target store, including fresh produce. He said he expects it to be the kind of grocery store where someone living in an apartment downtown would shop for one or two days’ worth of groceries.

The developers had hoped Planning Commission would take action on their plan at that meeting, which would have moved the proposal on to deliberations by City Council. But as ELi reported, a majority of Planning Commissioners believed there were still too many outstanding questions on the project to make a recommendation to City Council.

Commissioners also expressed the feeling of being too exhausted to continue deliberations on the project past one o’clock in the morning. Planning Commission had a lot of its agenda earlier that night, including a public hearing on a sorority house proposal and continued review of the Park District proposal, which it voted unanimously to recommend to Council.

Weeks ago, Council had scheduled its public hearing on the Center City District proposal for next Tuesday apparently under the assumption Planning Commission would be finished with its work by this week. It is relatively unusual for Council to schedule such a tight timeline for a project, but the Mayor and DDA Chair have consistently expressed strong enthusiasm for this project, starting with a press conference in late February.

On Wednesday, the Lansing Economic Area Partnership (LEAP) also sent out a press release on the news of attracting Target, saying, “LEAP has played a vital partnership role with East Lansing in leading and coordinating the packaging of this exciting project, and has been working diligently to ensure the Center City District package represents everything Mayor Meadows, the City Council, and the community have asked for over the course of many years.”

“We look forward to additional public hearings, but now is the time to go hard and cross the finish line strong with this project,” Bob Trezise, President and CEO of LEAP, is quoted as saying in their press release. LEAP’s Steve Willobee spoke to Planning Commission this week, urging them to recommend approval of the project. Leaders of construction unions also urged the Commission to vote that night to recommend approval.

East Lansing Planning Commission’s decision to take more time is hardly unusual, particularly for a project this large, and particularly for a complex project that would so dramatically change East Lansing’s city center and would involve a major City-owned property.

The project is not without its detractors, including now within the business and development communities. Developers tell ELi that ordinarily they all follow a “developers’ code” and refrain from criticizing each other’s projects in public. But this week at Planning Commission, Douglas Cron, a major landlord-developer in East Lansing, openly objected to the Center City District project during public comments.

Cron and his partners have developed The Residences building, which houses HopCat, and Albert Place, along with many other projects in East Lansing. Many of their projects contain student rental housing of the type planned for the Center City District project. Cron’s company is currently building a new major structure at 565 East Grand River, next to Moosejaw.

Speaking of the Center City District Proposal from Harbor Bay and the local Ballein family business group, Cron told the Commission, “The size of this project scares me. It really does.”

As proposed, the south tower of the Center City District project, along Grand River Avenue, would include market-rate rental housing with a total of 421 bedrooms. Harbor Bay and the Balleins say there is a market for this and provided a heavily-redacted study to back this claim to Planning Commission.

But telling the Commission the Center City project would effectively be five times the size of his HopCat building, and much taller, Cron strongly warned against it. The HopCat building is eight stories high, and the two towers of Center City District would each be twelve stories. Cron expressed the opinion that, with Albert Avenue being closed between Grove Street and M.A.C. Avenue for up to two years’ construction, businesses in the area would be endangered.

“What’s going to happen…with Black Cat Bistro, Harper’s, HopCat?” (Cron co-owns HopCat.) His concerns echoed those expressed to this reporter by numerous business owners and managers in the area. Most of them don’t want to speak on the record for fear of bringing negative attention to their businesses, but they are worried their businesses will suffer irreparable harm during construction.

Cron also raised concerns that, after the project is completed, there will be very problematic traffic congestion in the area. Parking Lot #1 now has space for 143 cars, and the garage would hold 715 cars. He also brought his own shadow studies, challenging those provided by the Center City District project’s developers. His were based on photos of Albert Avenue he took on April 1, and suggested that the street will be thrown into a shadow for much of the year. “It darkens things down pretty good,” he told the Commission.

Concluding his remarks, Cron told the Commission, “It’s just too big of a project….Should something be built there? Yes. But not to this magnitude.”

Terry Oetzel, a professional appraiser and East Lansing resident, also spoke to the Commission, focusing his remarks on economic concerns. He was particularly concerned about the plan for the north structure, along Albert Avenue, which would be built on City Parking Lot #1. That’s being planned to include retail space along the south side of Albert Avenue, five levels of parking garage above that, and six stories of rental housing for people aged 55 and over above that. (This would be across Albert Avenue from HopCat.)

The proposal includes the developer having the right to lease out the retail space and the senior housing space. The City has indicated they’re planning to charge $75,000 a year to the developer for the developer’s right to rent out the retail space and to have air rights to build the housing for people aged 55 and up in the Albert Avenue structure. We have asked but have been unable to determine how that figure was arrived at.

Oetzel asked why the City would enter into a lease agreement with the developers—including leasing out the planned new retail space on Albert Avenue and air rights for the “active senior” housing tower—without getting a professional appraisal to determine the worth of the City’s property. “Think about the economics before we say yes,” he said.

Lot #1 is a very lucrative property for the City, currently bringing in over $600,000 a year in gross parking revenues. Its location makes it an extremely valuable City asset.

In March, Meadows told ELi he would look carefully at the economics. “The devil is always in the details and while I love the idea, I still have to get comfortable with all the economics of the project,” he said.