After Years of Drama, Park District Plan Looks Real

Wednesday, September 19, 2018, 8:21 am
By: 
Dan Totzkay

Above: The plan for new buildings along Grand River Avenue, showing the hotel on the left.

At long last, it looks like the “Park District” development is finally happening.

The previous owner and would-be developer of this area, Scott Chappelle, has been convinced to stand down. That’s because DRW/Convexity, the current developers of the vacant properties downtown, has reached a deal with Chappelle, who lost the properties to foreclosure years ago. DRW/Convexity will pay Chappelle to release claims.

On the last round in the tortured history of these lots, Chappelle prevented redevelopment by convincing state-level authorities that they couldn’t approve tens of millions of dollars in tax incentives without his consent. According to DRW/Convexity, the redevelopment can’t happen without the tax incentives, so this version of the plan has had to build in getting Chappelle’s consent.

The final development agreement approved last night by East Lansing’s City Council indicates that Chappelle will agree to release any claims on the tax incentives before the project starts. With DRW/Convexity paying Chappelle, the City of East Lansing, the State, and DRW/Convexity will all obtain release from Chappelle on any claims to the tax incentives by him or his companies. (DRW/Convexity won't give any financial specifics on its deal with Chappelle.)

The deal is still contingent on the State approving tax incentives for the project. But if those state-level approvals come through, it’s a go.

The Michigan Strategic Fund Board is expected to vote on the tax incentives in November. DRW/Convexity is looking to break ground in January.

The Development Plan

Last night, East Lansing’s City Council unanimously voted to approve the complex development agreement with DRW/Convexity and also approved a series of related agreements, including rezoning and the Brownfield Tax Increment Financing plan.

As a reminder, the Park District plan is to include three new buildings, to be constructed on the series of vacant properties just northwest of the corner of Abbot Road and Grand River Avenue.

  • “Building A,” a 12-story mixed commercial and residential building located at the northwest corner of Grand River Avenue and Abbot Road. This is set to include about 14,000 square feet of retail space, 218 apartments housing about 370 people, 89 indoor, private parking spaces on two levels, and a rooftop terrace for residents.
  • “Building C,” a 5-story residential building located at the southwest corner of Evergreen Avenue and Valley Court Drive. This is set to include 72 income-restricted rental apartments, with one level of private on-site parking for 26 cars.
  • “Building D,” a 10-story hotel from The Graduate chain located directly to the west of Building A, between Evergreen Avenue and The Peoples Church. This is set to include 194 guest rooms, a ballroom, about 3,300-square-feet of retail space, hotel meeting rooms, and a rooftop restaurant and bar.

 

East Lansing Community & Economic Development Administrator Thomas Fehrenbach reiterated at Council’s meeting last night that Building A must be completed and occupied by May 2021 to receive the Michigan Business Tax credits. That means things have to move quickly.

After the meeting, David Pierson, DRW/Convexity’s attorney, noted to ELi that the developer’s timetable actually calls for July 2020 completion, in order to have occupancy ready in time for the 2020-2021 academic year. This is because East Lansing lease cycles operate to accommodate student housing, even for non-student residences. The hotel also wants to be ready a few months before the start of the Fall 2020 MSU football season.

Under the now-approved development agreement, the developers must submit applications for permits for Building C (the moderate-income rental building) within 18 months of Building A’s completion. Building C must be completed by January 1, 2025. If it is not, the land will be transferred to the City for use as “public open space.”

Questions about parking remain:

The Park District plan did not reach final vote without some criticism. At last night’s meeting local developer/landlord Doug Cron of Cron Management voiced a common concern about recent East Lansing developments: parking.

Cron specifically said that the Park District will bring hundreds of occupants, staff, and customers and that developments should be constructed to “meet maximum usage.” Cron believes the proposed 89 spaces will be insufficient for what the Park District will bring as, based on his own experience with downtown developments, “these people will come with cars.”

According to Cron, this redevelopment will inevitably stress the parking system in place during maximum capacity events, such as festivals, big sporting events, and graduations.

Asked by Council to explain again the parking plan, Fehrenbach reported that the Graduate Hotel, which will only provide valet parking for guests, plans to purchase long-term permits for 25 spaces in Lot 8, located just to the north of People’s Church. If those 25 spaces are insufficient at any given time for valet needs, the hotel will pay the City daily parking rates for any additional parking spaces needed.

The development agreement also allows for construction of underground parking at the hotel, to accommodate valet parking, but only if that site plan amendment goes through the usual review process in East Lansing.

Rendering of the hotel plaza, as seen from just north of the hotel:, showing the entrance where valet service would be provided on Evergreen Avenue:

The parking discussion happened all in light of a parking system that East Lansing’s Director of Planning, Tim Dempsey, has suggested is overbuilt. At last night’s meeting, Dempsey noted there are approximately 2,600 existing spaces in the East Lansing parking system and, even at peak usage, he estimates 1,100 of those spaces are going unused.

Dempsey went on to stress that his and his staff’s mission is to “accommodate the parking habits and desires of [East Lansing] customers over time,” and said he believes the parking plan for the Park District project will help to improve the utilization of available spaces in City-owned lots.

The end of a long road?

In comments following their votes for approval, Council Members voiced praise for City staff and for the process the Park District has undergone, as a whole.

Council Member Shanna Draheim said that the detailed discussions helped her feel confident in her vote on Tuesday evening.

Council Member Aaron Stephens echoed this, adding that keeping both Council and the public updated on all details of the development is a good practice that should be replicated in future decisions.

Mayor Pro Tem Erik Altmann additionally thanked Pierson for consistently providing clarity on behalf of the developers and making the process efficient.

Various Council Members said they were comfortable voting for the approximately $7.9 million Brownfield tax increment financing plan, because most of the funds from captured taxes will go to pay for public infrastructure, the demolition of the old buildings, and environmental clean-up. The plan will run about nine years, after which East Lansing and other taxing authorites will obtain full tax revenues from the project. (Read more about the plan here.)

After Council’s meeting, Stephens told ELi that he is “looking forward to bringing moderate income housing downtown,” and said this had been a key focus of his during his campaign and time on Council.

Asked what comes next, Pierson told ELi that the Developer is “going on to the MEDC in hopes of construction in January.” To stay on track, Pierson says they will go to the Michigan Strategic Fund on November 27. He seems confident the project will now stay on schedule – and really happen.