Heavily Redacted Reports Said to Prove Market for Center City Proposal

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Tuesday, April 11, 2017, 7:38 am
Alice Dreger

Above: Artist's rendering of the proposed project as seen from the northwest, with Albert Avenue in the foreground, showing the proposed parking garage (screened with brown metal tubes) and the two proposed twelve-story towers.

Developers for the Center City District proposal say there’s a market for what they’re planning to build in East Lansing’s core downtown: rental apartments for about 400 people expected to include MSU students, plus 93 additional rental apartments for people aged 55 and up. But the reports they have offered in support of this claim to East Lansing’s Planning Commission are so heavily redacted they come with a note from City staff that entire pages have been “fully redacted.”

As an example of what we’re talking about, in the report concerning proposed general rental apartments on Grand River Avenue, the entire 20-page portion of the Conclusions section concerning “Existing Student Housing Alternatives” is redacted, as is a 114-page section on “Field Survey of Modern Apartments.”

In fact, by ELi’s calculation, comparing the twin reports’ tables of contents versus actual provided pages, approximately 97% of the market study on the general rental apartments has been redacted, and approximately 93% of the market study on the 55-and-over rental apartments has been redacted. With such limited content shared, it is impossible to say how the developers reach their conclusion that the City does not need to worry that there is inadequate market for this redevelopment.

Review will continue with new (but without redacted) information:

These reports were provided along with other new items in red binders to Planning Commission members at their last meeting. There was no chance for the Commissioners to read what was in the binders in advance, nor were the binders made available to the public by the time of the public hearing at Planning Commission. The Commissioners are therefore expected to take up the issue of potential market, as well as other aspects of the proposal, at their meeting this Wednesday, as they continue to review the application.

As we’ve previously reported in detail, the current proposal put forth as a joint venture by Harbor Bay Real Estate and the local Ballein business group calls for a pair of new twelve-story structures.

One would be constructed on Grand River Avenue, with “medium-box” retail space on the ground floor and market-rate apartments above. The other would involve a large new structure along Albert Avenue, to be built on what is now the City’s surface parking lot #1. This structure would contain retail on the first floor facing Albert Avenue, five levels of parking garage above that, and, at the east end, another six floors containing rental apartments aimed at people aged 55 and up.

Concerns that the student-rental market is “saturated”:

The Planning Commission has already started discussing what it could mean for East Lansing if both the DRW/Convexity project at the blighted downtown corner and the Center City District project were built, just a block or so away from each other. Both propose hundreds of apartments aimed at general renters, many of whom would be expected to be MSU students.

According to the Lansing State Journal, last fall MSU’s President Lou Anna Simon “told local officials there’s no need for more off-campus housing” for students. The LSJ quotes MSU’s spokesperson Jason Cody saying, “The off-campus student market is saturated…. We do not anticipate an increase in enrollment that we believe would necessitate building new housing.” These remarks as well as the market analyses done for the developers came before actions by the Trump administration resulted in a downturn in applications to American universities by foreign students.

Concerns about whether there is a market for “active senior” rentals downtown:

That means questions are being raised about the market for the 12-story south tower of the Center City District. As for the 12-story north tower, along Albert Avenue, the developers have called the 55-and-over rental market “delicate.”

The developer is including this type of “active senior” housing in the project not because they want to build it but because East Lansing’s City Council passed an ordinance requiring that at least 25% of housing units in big downtown developments of this type be for something other than the typical student-rental market. Several people—including Planning Commissioner Kathy Boyle, who has worked extensively with the Seniors’ Commission—have asked whether seniors will want to rent apartments downtown overlooking active bars like The Riv, Harpers, and HopCat.

The retail component and a land-lease from the City:

The project as proposed would also bring additional modern retail space to the downtown area, including along Grand River Avenue and Albert Avenue. The developers say they are hoping to attract a “convenience grocer” to be part of the Grand River Avenue space.

Whether that “grocer” would offer products different from what CVS nearby now offers has not yet been established. The developers have told Planning Commission this would not be the kind of grocer people expect to go to once a week for multiple bags of groceries, but rather would be the kind of grocer aimed at people living in small apartments downtown like those planned in the south tower.

The current plan calls for the developers to pay the City of East Lansing $75,000 per year in rent (or a “land lease”) for the right to the new retail spaces on the ground level of the Albert Avenue structure (on Lot #1) along with the air rights for the senior housing above the parking ramp. It appears the rent would also cover space for the developer to use for ground-level maintenance and storage facilities.

We have been unable to ascertain how that figure was reached, but it appears from communications from the City that the developer expects to pay for the project in part via the profit margin between what it would pay the City in rent and what it would make on retail rents. The City’s Community and Economic Development Administrator Lori Mullins has told ELi that the developers would finance the cost of construction partly via “net revenue from the Albert Avenue retail space and reduced rates for parking permits.”

Other business owners downtown are challenging the proposal:

Meanwhile, in correspondence to the Planning Commission, downtown business owners also continue to raise concerns about whether this project will irreparably harm their businesses during and after construction. The current staff report to Planning Commission warns that during construction, it is likely that all of Albert Avenue will have to be closed from Abbot Road to M.A.C. Avenue for some time. Staff plans to try to help to promote businesses that will be impacted by two years’ construction.

In preparation for anticipated constructions, the Balleins have been moving local businesses out of the building they own at the northeast corner of Abbot Road and Grand River Avenue in order to provide space there to national chains currently occupying space farther down the street, where the south tower would be built. (The proposed project does not include buildings along Abbot Road, nor does it include the building that now houses Lotsa Pizza and Urban Outfitters, a property owned by someone else whose lawyers have contacted the City with concerns. The proposed project includes buildings east of Urban Outfitters as shown below.)

Conrad’s Grill and Spartan Corner were previously moved out of the Balleins’ corner building (across Grand River Avenue from the MSU Union), and this week saw the closure of the tanning salon at that location as well. The Balleins are planning to move Noodles & Company and the Verizon store into that corner space, after it is rehabbed.

The project proposal is being moved along quickly:

For this project to be approved, City Council will have to approve a site plan, the tax plan, and a development agreement that will include information about the land lease and air easement as well as a revenue bond that is expected to be the largest source of funding for the project. (East Lansing’s Brownfield Redevelopment Authority has already approved a $55 million tax incentive plan for this project.)

Several weeks ago, Council scheduled its public hearing for this project for next week, Tuesday, April 18, which means Council may make decisions on this project as early as then. Regardless, that’s when the public hearing will be for this project at City Council.

Council set that Public Hearing under the assumption that Planning Commission would vote on the plan at its meeting tomorrow night at the latest. This project has been scheduled with a faster review process than we have ever seen for a major redevelopment project since it was announced at a press conference hosted by the City of East Lansing and Mayor Mark Meadows on February 22.

How you can weigh in:

Planning Commission takes up this project tomorrow, Wednesday, April 12. You can speak at that meeting and you can also write to Planning Commission by writing to Planning Director Tim Dempsey via email. (Indicate that you want your message conveyed to the Planning Commission.)

The Brownfield Redevelopment Authority is expected to take up amendments to the tax financing plan this Thursday at noon. You can attend that meeting and you can write to them by email via Lori Mullins. (Indicate that you want your message conveyed to the BRA.)

City Council will hold a public hearing on this project on Tuesday, April 18, at their meeting, which usually starts at 7 p.m. You can speak then and you can also write to City Council via email.


You may also be interested in:

Two Big Projects, Treated Differently (Center City District and Park District)

Unanswered Questions on the Center City District Proposal

Center City Project Gets $55 Million Tax Incentive Approval from BRA

MSU Unlikely to Be Part of Downtown Developments

Is the Current City Council Stalling Downtown Redevelopment?


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