What’s All That Activity at the Blighted Corner?

Friday, July 21, 2017, 7:00 am
By: 
Alice Dreger

With signs of construction happening on both the east and west sides of Abbot Road at Grand River Avenue, we’re getting questions from readers about what’s up. Here’s an update:

Center City District-related redevelopment (east side of Abbot Road):

A section of sidewalk is now closed for ongoing reconstruction of the building at the northeast corner of Abbot Road and Grand River Avenue, where Conrad’s grill used to be. This reconstruction relates to the Center City District project.

Just to be clear, this corner is not where the Center City District project is set to be built, but it is where three businesses are being relocated by the Ballein landlord business. The Balleins own both the buildings to be demolished along Grand River Avenue for the Center City District project and the building on the northeast corner to which they are relocating three businesses, but not the buildings in between that house Lotsa Pizza, Rally House, and Urban Outfitters. (The in-between buildings will remain as-is.)

The Center City District redevelopment project is set to involve construction of a new 12-story building along Grand River Avenue. This building would include a smaller-style Target store with a grocery plus rental apartments above. The project will also involve construction of a new City-owned parking lot where surface parking lot #1 now is, with new privately-owned retail space on the ground floor of the garage and five stories of rental apartments for people aged 55+ above the garage. (Read more.)

The following image shows the Ballein-owned buildings along Grand River Avenue that would be demolished for the planned, privately-owned, Grand River Avenue-side Center City District building. You’ll note it extends from the former Panchero’s restaurant (just east of Urban Outfitters) to the current Cellular & More store (the Verizon dealer, just west of Lou & Harry's).

Here’s information on the various businesses affected by that project:

  • East Lansing downtown location of Conrad’s Grill: now closed. (See Conrad’s remaining locations.)
  • Spartan Corner: now relocated in the Student Book Store.
  • Charlie Kang’s restaurant: set to be relocated to farther west in the building being reconstructed, and expected to now include a bar and to serve alcohol. (The owners have applied to serve alcohol at the new location. That has not yet been approved.)
  • Noodles & Company: set to be relocated to the northeast corner of Abbot Road and Grand River Avenue.
  • Grand River Barber Company: relocating next to Bruegger’s Bagels in the space that had been occupied by the Velvet candy store.
  • Massage & Wellness: relocated to the Campus Town Mall, near Chipotle.
  • Sundance Jewelers: relocated to 330 Albert Street, under the parking garage.
  • Clever Clover: now in a building set to be demolished, and the store owner and the Balleins won’t say what is happening to this shop.
  • Cellular & More (the Verizon dealer): relocating west to the building being reconstructed.

The Center City District project has been relatively controversial but has now obtained all local approvals, including obtaining unanimous support from City Council. The redevelopment was recently given the okay by the City Manager following an external consultant’s review of the project’s developer.

Asked yesterday for an update on the Center City District project, City Planning Director Tim Dempsey said that the developer is working to get bank financing for the project in place and to obtain state-level financing approvals from the Michigan Economic Development Corporation (MEDC) in September. He said he would not expect anything to happen on the project prior to October 1 because the project won’t go to the state before September.

So what you’re seeing now is happening in anticipation of the financing plan coming together. Developer Mark Bell of Harbor Bay Real Estate has repeatedly said he needs the project to get started soon in order to satisfy the terms of the lease with Target, and that obtaining bank financing depends on being able to keep Target as the anchor tenant.

According to the City’s consultant, the lease with Target currently specifies the project has to be ready for Target to take over the space in September 2018 “to avoid penalty.” According to experts in the field, that’s a very challenging construction schedule for a building of this size and complexity. It’s possible Target could extend the lease or obtain some financial compensation for delays; the lease itself has not been made publicly available.

The Park District (west side of Abbot Road):

The trucks and dumpster now parked at the long-vacant “big bank building” at 100 West Grand River Avenue are there because asbestos abatement is going on at that location. The Development Agreement signed between developer DRW/Convexity and the City of East Lansing required that asbestos abatement be started by July 10.

If all goes as planned, the vacant, blighted commercial buildings on Grand River Avenue between Abbot Road and Peoples Church will be demolished and replaced with a thirteen-story building including a hotel, retail space, and market-rate rental apartments. Just north of there, a vacant lot also owned by the developer is slated to have a new owner-occupied condo building. Four older rental houses in the area would be demolished and turned into a City-owned parking lot. (Read more.)

So, when will the vacant buildings finally be demolished? That depends on when and how the Michigan Strategic Fund (MSF) Board of the Michigan Economic Development Corporation (MEDC) acts on the proposed redevelopment project.

Developer DRW/Convexity has obtained all required approvals at the local (City) level, but the developer says that to do the project, it needs the MSF Board’s approval of a $10 million state-level tax credit previously associated with the land. DRW/Convexity had hoped to get the MSF Board’s approval at its July meeting, but that didn’t happen because certain required paperwork didn’t get done by East Lansing City Planning staff.

Now City staff have arranged a special meeting of City Council next Thursday, July 27, to get that paperwork formally done. According to David Pierson, attorney for DRW/Convexity, the developer hopes to be on the MSF Board’s August 22 agenda. (The MSF Board meets only once a month.)

According to Pierson, if the tax credit is approved on August 22, “demolition of the buildings will start within 10 days and be completed within 8 weeks after that.” That’s required by the Development Agreement with the City of East Lansing. Construction would then be expected to begin in late spring or early summer of 2018.

All of that assumes everything goes according to plan—and this is not a piece of property with a history of things going according to plan, particularly under the previous developer. The current developer obtained the properties following foreclosure action against the previous owner. The paperwork being managed by Council next week involves formal notice of cancellation of a previous tax-incentive agreement on the properties with the previous owner, and that previous owner is known for being litigious. In fact, the current developer and others have had to work to fight off a number of legal actions from that previous owner on these properties.

That said, various players have said the previous agreements had effectively expired and the paperwork being handled next week is simply a formality required by a change in state law last spring. Needless to say, ELi will let you know what happens at that Council meeting and beyond.

 

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