Answers to Questions about the Park Place Proposal

Wednesday, January 23, 2019, 4:12 pm
By: 
Alice Dreger

As the $190 million Park Place proposal goes to Planning Commission for a public hearing tonight at 7 p.m., we are getting lots of questions about the proposal from readers. We’ll be bringing you more answers in coming days, but here are a first set of responses.

Has there been a shadow study to show what this project would do to surrounding properties? Not yet. Planning Commission often asks for one as part of their review process.

Are there any renderings of the project from the west or the north? None have been provided. That means there have been no renderings of what the project would look like from Valley Court Park or the homes just north of the project. (The project borders an all-residential historic neighborhood on the north.)

Is there a professional traffic study? Not yet. One is expected soon, because the Transportation Commission will need to review one on the project.

How can Planning Commission even be considering this when City Council hasn’t voted to include Lot 15 and the Valley Court Park in the site plan? Good question. We’re going to try to find out.

Site plans are not supposed to be considered unless property owners have given permission for their properties to be included. In this case, City Council voted to allow Lot 4 to be included. But Lot 15 and part of Valley Court Park are also in the proposal, and City Council has not voted to allow those.

Do the developers have tenants for the proposed 20,000 square feet of office space and 12-plex movie theater? None have been named. Developer Paul Vlahakis has said he’s been talking to two companies about the theater space and has told ELi he feels confident about finding a tenant for the office space.

The developers of the near-by Park District project, DRW/Convexity, had at one point talked about a major chunk of new office space for their properties, but no tenants for that materialized. That other project, now seeing excavation starting, includes no office space.

Is there any market study showing that this plan is viable for East Lansing, including in terms of all the added housing? The City has not asked for or ordered one, and if the developer has one, it has not been shared.

Could the City ask to see proof of commercial tenants, proof of financing, etc., before this deal is signed? Yes. Because the City would be a partner in the deal, leasing at least three public properties to the developers for private development, the City can ask for all this, plus a “pro forma” showing proof that the economics of the project make sense. But City leaders haven’t done that so far.

Has Vlahakis caught up on paying his taxes to East Lansing? This question arises because Vlahakis's companies have a history of tax delinquencies (and he unsuccessfully sued the City Pulse for reporting related to that) and because East Lansing’s City Charter says that “The Council shall not have the power to contract with or given any official position to any person who is in default to the City.”

The City Assessors’ office currently shows that the property taxes owed to the City of East Lansing on the Dublin Square and El Azteco properties and businesses – which Vlahakis owns – have not been paid for Summer 2018 or Winter 2018.

We asked Vlahakis what’s up. He responded that “Each of the restaurants are independent businesses and manage their own accounts based on revenue. Despite the hardships that East Lansing businesses have been facing, the only past due taxes that are owed are those that became due in August 2018.”

He adds, “Winter 2018 taxes are not due until next month but each restaurant has budgeted to bring all taxes current within the next 30 days, including any and all additional fees.”

Asked to explain the history of late tax payments that precedes construction downtown, Vlahakis replied, “Any time property taxes were paid late it was associated to vacancies or the recession during which time many people/companies lost a lot of money and real estate to bank and tax foreclosures. We however did not fall into that category. As I said, any taxes that were paid beyond the deadline were paid with interest.”

The amount owed to East Lansing in back taxes currently comes to about $85,000.

Why do the developers call Park Place East 14 floors when it’s 15 floors? The developers are not counting the top floor that includes a private club house and a private fitness room. We are counting that floor in our descriptions, because that’s habitable space.

Why does the draft tax incentives plan include things City Council has said it will no longer allow in a TIF plan, like paying for private development costs? City Council has left itself wiggle room in its TIF (Tax Increment Financing) policy to essentially do what it wants, but it is true that Council has lately been working to limit TIFs to environmental cleanup and the cost of public infrastructure like new roads, sewers, etc.

Earlier today, via the Freedom of Information Act we obtained the original TIF plan submitted by the developers, which called for a $70 million TIF plan to pay back the developers over 30 years for lots of private expenses. You can see it here.

Now that plan, which East Lansing’s Brownfield Redevelopment Authority is set to consider tomorrow, is down to $15 million over 11 years. See the update here.

That said, the plan on the table still includes reimbursement for private development, including a lot of foundation work for the two private buildings. By our calculation, over $6 million would go to private development costs, and more seems to be built in to pay back the developers’ lawyers and consultants with new tax money that would otherwise go to public coffers. (That happened with Center City.)

Seeing the draft Park Place TIF plan led a couple of readers to ask the next question:

If the City is going to agree to a TIF plan that pays for private development costs amounting to essentially what the DDA’s Evergreen Avenue properties cost (about $6 million), why not open up those properties to other developers with the same kind of TIF deal ($6 million for private costs), and see what else is proposed for that land?

So far, the DDA has stuck with this project and not elected to open up the publicly-owned properties on Evergreen Avenue to a Request for Proposals (RFP).

How do I weigh in?

You can communicate with Planning Commission on this project at the meeting tonight which starts at 7 p.m. in City Hall, and you can also write to Planning Commission via staff member David Haywood.

Planning Commission is advisory to City Council, which makes most of the ultimate decisions on the project. You can write to Council via email.

The DDA is also advisory to Council on most issues, although the Brownfield Redevelopment Authority (BRA), which has the same membership as the DDA, could stop a project by voting against a Brownfield TIF plan. (It has never done so.)

You can speak at DDA and/or BRA tomorrow (see agendas) and can write to the DDA/BRA through staff member Tom Fehrenbach.

 

Check out ELi's comprehensive reporting on the Park Place proposal.

 

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