Above: demolition at 303 Abbot Road as seen last night from Evergreen Avenue
After years of vacancy, demolition of the publicly–owned building at 303 Abbot Rd (also known as the ”little bank building”) began yesterday. Although it had been slated to start July 11, issues with the asbestos removal process and unexpected new costs delayed the major demolition until yesterday. The demolition is now projected by City analysts to cost close to $200,000, an increase of $55,000 over the previous estimate.
The work began two days before the East Lansing Downtown Development Authority (DDA) is set to discuss several issues involving the demolition of "the little bank building”, the former Citizens Bank (the “big bank building”), and the surrounding "Park District."
A pressing issue that will be brought up at the DDA’s meeting tomorrow is the additional cost of up to $55,000 to be charged to the DDA. The additional cost is required because the Lansing Board of Water and Light (BWL) has a main duct line that lies adjacent to the south side of the property at 303 Abbot Road, and BWL has changed how it wants that managed. According to a staff memo to the DDA, the process for protecting the duct line will now require “different and additional equipment" and stretch the length of the project to "four weeks instead of the original two weeks."
Aside from the yet–unapproved additional $55,000 cost, the demolition is being paid for by a $99,000 grant from the Michigan Land Bank Fast Track Authority to the City, as well as a $36,000 contribution from the DDA. The DDA will also be fronting some or all of the $55,000 necessary to account for BWL’s duct line, although according to the memo sent out by City staff, the DDA will be instructed to "seek repayment from BWL for the additional costs" at a later, undetermined date.
A development plan for the property has yet to be submitted. According to another memo due to be addressed during the DDA meeting on Thursday, the primary owners of the privately–owned Park District properties have only indicated that they "intend" to submit a plan for the site development.
Lori Mullins from the City's Planning Department penned the latter memo, which also suggests that the DDA should sell the 303 Abbott Road property to the development company for 60% of the price the DDA originally paid for it in 2001.
In 2001, the property was purchased from one of the DDA’s members, Brad Ballein for $700,000. (Ballein did not participate in the DDA's decision.) Mullins and the rest of the City’s Project and Infrastructure Committee now suggest selling it back into private hands for $425,000, which Mullins’ memo notes is “one half of the sum of the DDA’s purchase price for the property ($700,000) and the estimated demolition costs ($150,000).” (A reason given for the discounted price is that the purchaser will be responsible for "realigning Abbot Road," which requires use of part of the property for the road. We suspect Mullins means to refer to the realignment of Albert Street.)
A draft letter attached to the Mullins memo cited above provides an interesting development in the Park District story. While most have reported that the private financial entity that acquired the private buildings in the Park District development area (after a foreclosure auction) is the Chicago–based "WGR Finance LLC", some, including Elliot Singer in a report for ELi, have shown that “WGR Finance LLC" is located at the same address as DRW Holdings, LLC, a Chicago–based company that trades in “options, futures, derivatives, and real estate properties." This is according to their Bloomberg research profile. DRW has financed luxury student apartments in other college towns, including Madison, Wisconsin.
In fact, the draft letter produced for tomorrow’s DDA meeting indicates that the "site plan" for 303 Abbot Road is “to be submitted by DRW holdings, LLC”, not WGR Finance. The CEO of DRW Holdings, LLC, Don Wilson, is currently involved in a lawsuit filed by the Commodity Futures Trading Commission (CFTC). CFTC alleges that Wilson and the company engaged in a "manipulative scheme" with financial markets that the CFTC claims “intended to affect market prices”.
The extra $55,000 cost incurred to the redevelopment project by the new BWL requirements, the price at which the 303 Abbot Road property is to be sold to the financial conglomerate DRW, and exactly who the DDA is selling this land to, are all topics due to be discussed at tomorrow's DDA meeting. Meanwhile, demolition is well underway at 303 Abbot Road.
Below: the demolition yesterday evening as seen from Evergreen Avenue near Grand River Avenue.
You may also be interested in:
- Downtown Blighted Buildings to Be Eliminated by Year's End
- The complicated history of 303 Abbot Road
- Judge Clears Way for New Owners of Blighted Properties