Council Approves Contract for Downtown Land Sale to Credit Union

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Wednesday, February 26, 2020, 8:30 am
Alice Dreger

Above: Rendering of the building from the southeast. The Abbot and The Graduate Hotel (both under construction) are shown to the left, and Dublin Square restaurant appears to the right of what would be the new credit union building.

With little discussion, City Council voted unanimously last night to push through a series of changes to the draft contract with Michigan State University Federal Credit Union for the sale of parking Lot 4. Council also voted unanimously to enter into that contract if voters approve the idea of the sale on March 10.

The vote taken specifically authorized Mayor Ruth Beier to execute the contract if a majority of voters cast ballots in favor of authorizing Council to sell the land to the credit union for $810,000 for purposes of building a new 8-story office building.

The project would be at the northwest corner of Abbot Road and Albert Avenue, just south of Dublin Square.

The previous version of the draft contract allowed for the closing of the sale even if the credit union had not yet obtained all governmental approvals for the project and it did not restrict what the credit union could then do with the land.

Now the contract calls for a deed restriction which would “limit building uses to only those approved by the voters at the March 10, 2020 election.”

The use of a deed restriction to solve this issue means there will be a permanent restriction on the land tied to the ballot language. That ballot language requires “a five to eight story commercial office building, not to exceed a height of 112 feet,” strongly limiting the land to that use.

The City’s and Credit Union’s attorneys apparently did not decide to solve this issue with a development agreement of the sort used in East Lansing in the past which has allowed reversal of land transfer if an expected deal fell apart.

According to the contract language approved last night, the credit union can still back out of this deal before the actual closing if it doesn’t get the approvals it wants.

The credit union has not yet disclosed the results of its environmental testing or said for certain whether it might seek tax increment financing (TIF) for environmental clean-up or some other purpose. The credit union’s head has said the intention is not to seek any tax incentives, but the City’s Director of Planning has indicated that if environmental problems are found on the land, a TIF plan might be used for that.

City staff has also sought the use of TIF in that general area for purposes of building public infrastructure, as it did with the TIF on the DRW Convexity project at the big downtown corner, right across Albert Avenue from Lot 4.

The closing date for the sale of Lot 4 to MSUFCU is now named in the contract as “on or before September 23, 2020” with the allowance for extensions if the credit union needs more time to get desired approvals.

Representatives of the credit union have said the renderings provided so far are just conceptual. An actual site plan will not be submitted unless voters approve the sale.

You can see the entire contract with an explanatory staff memo here, and read about what we know about the whole project in our in-depth voter guide. © 2013-2020 East Lansing Info