Planning Commission Formally Fails to Recommend Center City District

Thursday, April 27, 2017, 10:35 am
By: 
Alice Dreger

Above: Architects’ rendering of the proposed Center City District project, looking from the southwest.

East Lansing’s Planning Commission split 4-4 last night on whether to recommend City Council approve the Center City District redevelopment site plan and special use permits. A split vote from Planning Commission means a project is not recommended for approval, although the project plan still moves on to City Council for the final decision, as explained below.

The chief objection of those voting against was the height and mass of the proposed buildings. Those voting in favor expressed strong enthusiasm for the proposal, expressing some surprise at the “no” votes. The “yes” votes saw the density as a strong benefit of the project.

The site plan as it currently exists calls for a 12-story, privately-owned building on Grand River Avenue, 140 feet tall, with 271 market rate apartments (for 421 total occupants in that building) and an “urban” Target store with fresh groceries on the ground floor. At the meeting, the developer showed Planning Commission photos of the small-store grocery he expects at the Target, featuring fresh fruits and vegetables, fresh bread and yogurt, and so on. This is one of those images, from a Boston Target store:

The site plan also calls for a new City-owned parking garage on Albert Avenue, where surface Lot #1 now is. Planning Commission heard verbally last night that garage is now set to be five stories, not six, although all of the paperwork and renderings provided still show six stories.

The first floor of the ramp would be retail space rented out by the developer, and floors 2-5 would be for parking, mostly for monthly permit-parking by residents of privately-owned buildings. (The developer would pay the City a discounted rate for the permits and would then lease the spots to residents interested in parking.) Above that garage, on the east end, the developer would construct a rental apartment building for people aged 55 and up, with 93 units expected to house 136 “active seniors.”

Below: The project as seen along Albert Avenue, with the senior housing project being the tall building above the proposed parking garage.

The project moves on to City Council:

Planning Commission is advisory to Council—Planning Commission itself cannot itself stop a project—so the site plan and special use permit applications will still go to City Council for review and possible approval on Tuesday, May 9. The special use permit applications, which must be approved for construction of buildings as tall as these in East Lansing, requires a minimum of four votes of support at City Council.

Council will also be dealing on May 9 with the tax increment financing (TIF) plan for this project, currently set to be for about $55 million for 30 years. The financial details of this project are still very much in the air. Various Councilmembers have been telling constituents that if the finances don’t look good from the City’s point of view—including in terms of virtually eliminating financial risk to the City—they won’t approve the project.

After the 4-4 vote, developer Mark Bell of Harbor Bay Real Estate told ELi, “We’re disappointed about tonight, but we remain optimistic.” He said he felt that as people get more information, they will understand the value of the project. Speaking of the Planning Commission, he said, “I understand as a developer that these are community members that aren’t necessarily in real estate. So it’s a lot to understand…. We’re trying to educate and inform.”

Bell said, “At the end of the day, we remain under a fundamental goal of this to be a transformational project that the City of East Lansing would be proud of. If the City of East Lansing is not going to be proud of it, that’s not a position we want to be in as a developer.” He said it was very important to him to use high-quality materials and build a vibrant, successful project.

Below: The proposed project rendering as seen from Grand River Avenue looking northwest. (To the left in the image is an inaccurate rendering of the proposed Park District "Building A," a project recently approved by Council.)

The vote was uncertain until the end:

Which way the vote would go last night remained unclear until the vote was actually taken by roll call. The atmosphere was thus pretty suspenseful.

When it came time for the vote, Commissioner Kathy Boyle first explained why she would vote against recommending approval. She thought that buildings “half-again as high as HopCat” (an 8-story building) were just too high for that location: “I think that’s just too big to plunk in the middle of that block.” She said they would dwarf the buildings nearby, and she doubted the roadways downtown could take the level of car traffic the project would bring.

Boyle said she did not see how these proposed buildings would provide a “significant public benefit,” which is the standard that must be met to approve the special use permits for the extra height. She said the “enormous building” on Grand River Avenue is “not providing something the City needs.” The housing market is saturated, she told her colleagues, “and nothing in the heavily-redacted market study we were provided convinces me otherwise.” An advocate for seniors and senior housing, Boyle said there was nothing more she wanted in East Lansing than senior housing close to MSU. But she said this wasn’t the right project for that.

Commissioner Paul Stokstad then spoke, saying Boyle had captured what he felt: “I think it’s really too big for that specific place, and for this time.”

Speaking next, Commissioner Chris Wolf said he would also vote against recommending approval. He said he might approve the project if it included only the Grand River Avenue building, although without the parking garage, he said, that building would face challenges. But, he said, while 12-story tall buildings along Grand River Avenue are perhaps reasonable, he could not support an 11-story building on Albert Avenue.

Wolf said he thought the Target store “has been oversold as an amenity.” He said he had researched the Target smaller-store concept and warned that, while the ones in big cities (like New York and San Francisco) sell fresh groceries, the ones in college towns are more likely to sell grab-and-go prepackaged food, apparel for sports teams, portable electronics, and dorm and apartment furniture. He said that was fine, but doubted it was going to be the grocery most people expected from this.

Wolf also said he thought the redesign of Albert Avenue was being “oversold to us.” He said all of the changes planned there were being done on City property and were done mostly by giving up parking along Albert Avenue. He said if the City wants to do that, it can do it without this developer or development, if it finds the money. Wolf told the Commission the traffic impact study predicts the street will still have heavy car traffic and lots of conflict between bicycles, pedestrians, and motor vehicles.

With three Commissioners having indicated by that point that they were voting against, Commissioner Summer Minnick became the first to say she would vote for recommending approval. Minnick said she thought the project would provide a “varied skyline” that would be “the city that I want to live in. I think it’s iconic. It’s unique. If you’re standing there looking at it, you will know you are in East Lansing, Michigan….I think it brings excitement, buzz, and hope.”

Minnick said she had recently been driving down Grand River Avenue with her daughter, who is eleven years old, and her daughter told her she doesn’t like driving there “because it makes her sad. I thought, that’s who we are raising here, this next generation…and I don’t want them to grow up being sad because we have these vacant buildings that are older and not modern.” She said the addition of Target “has created excitement in so many people I know,” and she said she thinks they will come to downtown East Lansing, including from other towns, “in droves to experience it.”

Below: The project area for the Grand River Avenue-side building. Charlie Kang’s, Sundance jewelers, Noddles & Company, and the Verizon store are moving to other locations.

Commissioner Don Davis also said he would vote in support and expressed “surprise at the pessimism I’ve heard regarding the project.” He said he found no “principled difference” between an 8-story and 12-story building. Target will adapt to whomever is the local market, David said, and so if there is a market for groceries, Target will provide those. He said he thought the project “an opportunity for East Lansing to grow, to provide a different ambiance in the area.”

Davis said he was glad to see the City and developer work on strategies to protect and support local businesses during and after construction. This was in response to the developers explaining earlier their plan to keep construction workers from taking up nearby parking spaces other businesses would need, to feed construction workers from local restaurants, to provide detours and signage to lead customers to existing small businesses during construction, to get people who would usually use Lot #1 to still come and use other available parking, and to provide personal shopping opportunities to construction workers to encourage them to spend money on gifts purchased downtown.

Agreeing with Davis, Commissioner John Cahill said he was also surprised to hear negative comments about the project. He said he thought the project “will ignite downtown East Lansing. I think this is exactly what we need in East Lansing.” He said Lot #1 as a surface lot was underutilized real estate. He said that people put up with traffic in exciting cities like Ann Arbor: “that’s a symptom of a vibrant downtown.”

At that point, with the vote at three against and three in favor, Chair Laura Goddeeris explained why she was voting in favor. She said she thought the urban Target was better than a “true grocery store” because it was better suited to people living downtown. She thought the project would make more people “live and visit and linger” downtown.

Goddeeris found it encouraging that the developers had obtained endorsement for the project from owners of Horizon Bank, Black Cat Bistro, Charlie Kang’s (which is being moved as part of the project), El Azteco, Lou & Harry’s, Mercantile Bank, Noodles & Company, Verizon, Sidebar, Potbelly Sandwich, and Aveda Institute. [UPDATE: ELi has since learned that Bell misrepresented endorsements; read more.] During public comment, the owner of P.T. O’Malley’s and Harper’s Brewpub endorsed the project strongly and unequivocally .

Below: a map of the project area. Click here to see a larger view.

Goddeeris said building up is the way to go, and that surface parking is a poor idea for a downtown. She said her biggest concern was the mass and height, and said the project “will alter the skyline and character of our downtown, and will take some getting used to.” But, she said, she was comfortable enough to recommend it to Council, saying she felt “some trepidation…but also excitement that growth which once seemed really far in the distance might be near us.” She said, regarding the project financing, “If the numbers don’t add up, I won’t be surprised to see a revised site plan, but I think it’s time to move to those conversations.”

At that point, three commissioners had spoken against, four in favor. The only Commissioner left to express an opinion was Terrance Range, who is new to the Commission and had thus far in the meeting said nothing. Asked by the Chair if he wanted to speak, Range told Goddeeris she could just call the roll for the vote. When she got to him, he voted “no,” bringing the final vote to four-four, formally failing to approve recommendation to Council.

There are actually nine members of Planning Commission, and all were in attendance. But as he has been doing consistently, Planning Commissioner Dan Bollman recused himself from the discussion and from the voting as soon as the matter came up on the agenda, citing a conflict of interest. Bollman’s architecture business rents office space in one of the buildings set to be demolished under the plan, so he is in a landlord-tenant relationship with the Brad Ballein, the co-developer of this project.

Bollman had earlier in the meeting opted to speak during public comment as a citizen and architect, saying he appreciated recent changes to the plan but that he still thought the buildings were too tall. He advised City planners “exercise caution” before approving a 12-story building on Grand River Avenue and what would now be an 11-story building on Albert Avenue.

Planning Commission voted to draw Council’s attention to certain issues:

Before the vote on the main issue of whether to recommend Council approve the project, the Commission voted on various conditions of approval to attach to their recommendation to Council. These included an attempt to make it possible for permit-parkers to get in and out of the garage via a special exit/entrance on the alleyway when the main ramp entry is closed for festivals on the street.

The Commission also recommended providing alleyway signage to draw attention to local businesses and using special paving to try to make drivers aware of pedestrians when vehicles are crossing sidewalks in the project area. The Commission also voted 6-2 to recommend Council limit deliveries and trash pick-up at the project to between the hours of 6 a.m. and 10 p.m.

The Commission also sought to make sure the parking garage is cladded in some attractive material. The renderings that have been provided so far have called for brown metal tubing on the outside of the parking garage facing Albert Avenue, and no screening on the alleyway side.

The developers now say they are looking at possibly cladding the garage with brick to look more like MSU’s parking garage along Grand River Avenue. The developers’ architect told the Commission they are considering a “brick façade with openings that maintain the [ventilation] requirements of a parking ramp but [that] dresses up the ramp to make it look presentable.” Council will decide this issue.

The Commission also “flagged” the question of who is going to pay to keep up the pedestrian paths. These include along the alleyway and also in a covered space that would run along the parking garage from Albert Avenue to the alleyway, where the Target store would be. This “tunnel,” as one Commissioner called it, would be 120 feet long and about 20 feet wide, open at both ends to the elements, lighted and with amenities like benches. It would have some internal retail space facing part of it. The developer provided this rendering, although one Commissioner pointed out the scale in it is misrepresented as it is shown to be wider than it would really be:

Commissioners were concerned with the question of who is going to keep this pedestrian tunnel space secure and clean. The developer indicated they want the City to be responsible, and the City has indicated they want the developer to be responsible.

The proposal moves forward to Council:

As has been happening, many people came to the podium to speak to the Commission on the project. This took up about an hour of the meeting, with another hour being taken up by additional presentations by the developers. Based on points of debate, besides the items highlighted above, we can expect that Council will take up the following:

  • whether the parking garage addresses the City’s needs. Right now, the garage is expected to be used mostly for monthly permit-parking to support the developers’ two residential buildings. In terms of hourly/daily parking, the parking garage is set to increase available parking by 40 spaces beyond what Lot #1 currently holds. (The original idea had been to have this garage add substantial additional parking for future development downtown.)
  • style of the parking garage in terms of amenities like an interior walkable space for residents of the 55+ senior building to use for exercise, possible public restrooms, etc.
  • shadowing of nearby areas, particularly the Ann Street Plaza.
  • market for the Grand River Avenue-side apartments. The developers say these apartments, many of which are designed to be single-occupancy, will be attractive to young working college graduates and not just MSU students. (Read our report on the market studies.)
  • market for the senior housing. The developer provided a memo saying that building will provide exactly the kinds of amenities seniors in the 55-70 “empty-nester” range are looking for.

Then there is the very significant issue of the financial deal with the City. After the meeting, I spoke to developer Mark Bell for some about this. The current TIF plan assumes a high taxable value of the constructed project, and seeks to capture 90% of the new taxes for thirty years to pay for expenses related to the redevelopment. What happens, I asked Bell, if the project turns out not to have as high a taxable value as is being estimated, so that the captured new taxes can’t cover the expenses in the TIF plan? Who will be stuck with the bill—the City or the developer?

“That is to be determined,” Bell said.

For the project to be approved, it will require Council approving the site plan (minimum of 3 votes in favor), the special use permits (minimum of 4), the TIF plan (minimum of 3), and a development agreement (minimum of 3). The development agreement is expected to be unusually complex, because the project involves allowing the developer to construct the senior apartment building over the City’s property using an air-rights lease, a lease expected to be for 49 years. When the air rights lease is up, the City will own that building.

 

Note: The image from the Boston Target was added after this story was originally published. It was provided by Mark Bell of Harbor Bay Real Estate at our request.