City Staff Push for Fast Rezoning as Royal Vlahakis Project Goes to Planning Commission

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Monday, July 22, 2019, 8:00 am
Alice Dreger

Above: The new proposed project, looking north (as if seen by drone from above the back of Peoples Church).

East Lansing’s Planning Commission is set to begin review of the latest “Park Place” proposal from developers Royal Apartments and Vlahakis Development this Wednesday, marking the latest step in an extraordinary and controversial deal-making process that began last year not with a site plan but with a contract for what was first envisioned as a $190 million deal between East Lansing’s government and Royal Vlahakis.

The developers have been seeking to purchase and redevelop land owned by East Lansing’s Downtown Development Authority (DDA) just north of Peoples Church. The properties stretch from 314 to 344 Evergreen Avenue.

Now, City staff and members of the DDA are pushing the Planning Commissioners to vote at Wednesday’s meeting to recommend permanently rezoning the properties for big redevelopment, regardless of what they think of the latest Royal Vlahakis proposal.

What’s in the latest plans?

Out are Royal Vlahakis’s original plans for two buildings up to 14 stories, movie theaters, and robotic parking. All that had been proposed for a “Park Place” project which would have included the DDA properties, the land on which Dublin Square sits, a property owned by Matt Hagan, and two public parking lots.

In are plans for just one building called “Park Place West,” only on the DDA properties, coming in at a total of 10 stories. Park Place West is designed to have 23,000 square feet of ground-floor retail space, 138 market-rate rental apartments, 46 additional rental apartments restricted to people with moderate income, and a top-floor fitness room for residents.

Mike O’Callaghan of Vlahakis Development said last week that the 1-bedroom market-rate apartments (at 585 square feet) would rent for about $2,000 a month, and the 3-bedroom units (at 1,100-square feet) would rent for about $3,200 a month. There would also be studio and 2-bedroom units.

The proposal includes revision of public infrastructure, including extending Albert Avenue from Evergreen to Delta Street through what is now public parking Lot 8 just north of Peoples Church and major sewer work.

Below: The proposal rendered from just south, behind Peoples Church.

There’s also an idea for some kind of new public pedestrian space with a “pavilion” (shown above) along what is now an active-roadway block of Evergreen Avenue, although details on that are still in flux. The City now says it doesn’t want to move the farmers market to that location as the developers suggest in their plans, and City staff say the current design with a cantilevered pavilion wouldn’t really work.

Below: Park Place West shown in two-dimensions from the west (the Valley Court Park side).

The plans submitted call for 112 private parking spaces in two underground levels below the new building and reduction of surface-level public parking by about 30 spots, caused by the extension of Albert Avenue through what is now parking Lot 8. There would be no new public parking added to replace what is lost.

The developers are still hoping to put the Park Place West building’s stormwater retention and treatment pond in Valley Court Park. This past week, the developers suggested the Department of Public Works wants the pond in the park while the Parks & Rec Department does not.

Brent Titus (below), attorney for the developers, told members of the DDA that the developers “cannot accommodate both requests,” suggesting the City doesn’t know what it wants. A memo shows Parks & Rec staff are indeed against the idea, and the Director of DPW tells ELi “we are neutral” on the issue (contrary to the developers’ representation that DPW is “for” it).

The developers are struggling with the issue of where to house their stormwater treatment facility because, with two floors of underground parking and a building that pushes out to the max in terms of lot lines, they’re short on options.

They told members of the DDA last week their engineers will work on putting the stormwater retention area under the underground parking if it isn’t in Valley Court Park.

Lots of information and documentation still missing

The developers’ submissions are still incomplete. The elevation drawings don’t show how tall the buildings would be at various points. There’s still no traffic study. There’s no landscape or streetscape plan. It appears there is also still no construction staging plan.

The developers have also not submitted a Brownfield tax increment financing (TIF) plan, which is now due on July 24 according to the contract extension approved by a majority of the DDA. A TIF plan for this project is supposed to capture new taxes from the project to pay for the major public infrastructure changes.

Questions have been raised about whether this project could produce enough taxes to pay for the public infrastructure.

Also missing is evidence of the “partnerships” the developers say will make the project happen. The developers have been saying for months that the privately-owned retail space in their building will be operated by Project for Public Spaces (PPS), a national nonprofit.

But that doesn’t seem to be consistent with what PPS does. That organization has said, in answer to inquiries from ELi, that it will respond to our requests for confirmation of its participation, but has yet to do so after several weeks of requests.

Below: Developers Paul Vlahakis (left) and Mike O'Callaghan at the June 25 DDA meeting.

The developers also say that the income-restricted units will likely be funded through MSHDA (the Michigan State Housing Development Authority). O’Callaghan told DDA members MSHDA is “really excited about the project.”

But pressed last week by City Attorney Tom Yeadon, O’Callaghan and Titus said they could not offer evidence of MSHDA support before the developers want a development agreement signed.

Titus told Yeadon they could “ink” (sign) a development agreement with “blanks,” suggesting this has been done before – an apparent allusion to the Center City District deal, where Council let Mayor Mark Meadows alone approve several hundred additional pages of key agreements after they decided to approve the incomplete agreement.

The exclusive deal continues for now

As of now, the DDA continues to be in an exclusive purchase agreement with Royal Vlahakis whereby, if a deal is finalized, the developers will pay $5.58 million for the Evergreen Avenue properties. That’s the amount the DDA owes on them.

A month ago, at a tense DDA meeting, Meadows and DDA Chair Peter Dewan voted for the second time against continuing this exclusive deal. They want to open up the properties to a Request for Qualifications and Proposals (RFQP) to see what other developers might propose. But Meadows and Dewan have been outvoted so far.

The DDA is expected to vote on another extension this Thursday, the day after Planning Commission meets.

The extensions have caused confusion in meetings because there are effectively two different contractual extension systems.

One is related to “inspections” of the properties, extensions for which the developers can pay $21,000 for each 30-day extension. They have not had to make any $21,000 payments so far because of how the contract was written and revised by Titus and Yeadon.

The other extension system is related to the signing of a development agreement, for which the developers are paying $15,000 for each 30-day extension. At each meeting where the DDA has voted to extend the contract, Titus has made a show of handing City staff a $15,000 check.

City staff told DDA members last week they expect Royal Vlahakis to keep asking for more extensions until they get a deal done.

A push for rezoning immediately

Last Thursday at a DDA Executive & Finance Committee meeting, following a request of City Planning staff, DDA Chair Peter Dewan voted with Jeff Kusler and City Manager George Lahanas to ask Planning Commission to disregard their normal operating procedures and immediately recommend to rezone the properties to B-3.

Community and Economic Development Administrator Tom Fehrenbach told the DDA committee that “staff thinks it prudent” to get the rezoning done as fast as possible. He said that given that there is an “active project” from Royal Vlahakis that requires the rezoning, “this is the most efficient way to check that box” in terms of what the project needs.

Fehrenbach (above) added that if the Royal Vlahakis project doesn’t pan out, then the rezoning will “put us in a stronger position” to release the RFQP to attract other big redevelopers. In response, Dewan said he was happy to try to get the permanent rezoning done fast.

The existing RM-32 zoning on these properties allows up to 6 stories with approval of at least four members of Council.

By contrast, B-3 zoning would allow “by right” up to 6 stories if a project has a residential component, up to 112 feet with approval of three or more members of Council, or up to 140 feet with approval of at least four members of Council.

Staff memos on the subject acknowledge this is much higher than properties in the Oakwood Historic Neighborhood to the north. But, staff say, the B-3 allowed height is relatively consistent with what DRW Convexity is building along Grand River Avenue to the south, and therefore makes sense.

Below: Park Place West shown in two dimensions from the north (the Oakwood Historic Neighborhood side).

Traffic and a lack of adequate public parking for community activities (like the farmers market, festivals, and church weddings and funerals) have been named by Peoples Church and members of the Oakwood neighborhood as major concerns for redevelopment of this area.

In the past, the DDA’s Evergreen Avenue properties have been conditionally rezoned B-3 for redevelopment projects that never came to fruition.

A permanent rezoning change would effectively bring an end to the discussion of whether these properties should be redeveloped with six-story structures or something more like the high-rises seen east of Abbot Road.

The Commission only makes recommendations to Council on rezoning. A simple majority of Council will decide whether the DDA properties are permanently rezoned B3. Council will also make the ultimate decision on the whole deal, with the DDA technically having veto power.


See a timeline and ELi's comprehensive reporting on the Royal Vlahakis deal by clicking here.

Disclosure: Alice Dreger owns a home in the Oakwood neighborhood. © 2013-2020 East Lansing Info