Council Approves Million-Dollar Land Contract; Details Yet to Come

Wednesday, March 6, 2019, 9:27 am
By: 
Dan Totzkay

Above: Members of City Council at last night's meeting.

With little discussion, and questions about the process left unanswered, East Lansing’s City Council voted unanimously last night to approve a million-dollar purchase agreement for the former Department of Public Works (DPW) land on Merritt Road, near Costco.

As ELi previously reported, a Michigan company, Kodiak Landarc, was declared by City staff the “winning auction bidder” for the site, though it’s unclear how many potential buyers even knew the site was up for auction. The auction was never announced on the City website or in its news releases, and nothing can be found about the auction in terms of online advertisement.

Kodiac Landarc’s representative is named as Jeff Yatooma, the owner of Cannabis Property Brokers of Michigan, self-described “Leaders in the Michigan Cannabis Real Estate Industry.”

The 6.4-acre property is to be purchased for $1,000,900, but only if Council agrees to also approve yet-to-be-submitted applications for a special use permit (SUP) and site plan. If Council doesn’t agree to the purchaser's plans, the purchaser can pull out of the deal.

No details have been provided with regard to the plans for the site.

Before the vote, during the designated public-comment period, ELi’s Publisher Alice Dreger asked a series of questions that had come from her reporting staff and ELi readers.

These included questions about where the public could see the text of the auction advertisement or call for bids; where the call for bids was advertised, and when; how many bids were received; who the bids were from, and what prices they named.

Dreger also asked, if the City wanted the best price for the land, why wasn’t the auction advertised widely and actively promoted by the City through its public channels? She also asked why the City would not wait until it passes Ordinance 1448 rather than agreeing to a price before it is passed. Ordinance 1448 has been specifically named by its Council proponents at being aimed at driving up the value of this piece of public land.

She asked whether there was a reason this particular buyer or the anticipated use was of interest to the City, and if so, whether that particular interest was stated in the call for bids, so all potential bidders would know what the City was looking to do.

Dreger asked why the purchase agreement would be made contingent on the approval of the site plan and SUP applications, and why the City would not instead seek to sell the property to someone who would accept the risk that a Council would not approve their plans. Finally, she asked whether the call for bid made clear that bidders could obtain purchase contracts that would be contingent on approval of plans by Council.

In response to Dreger, Mayor Mark Meadows said he would “try to get some answers to some of those questions.” He did not, however, publicly ask staff to answer the questions.

Council then proceeded to vote to approve the contract on the Consent Agenda. Meadows, Erik Altmann, Ruth Beier, and Shanna Draheim voted for it. (Aaron Stephens was away on vacation.)

The only discussion this item received involved a brief exchange between Draheim and Meadows.

Without elaborating, Draheim noted there were “some issues” with putting the proceeds of the former DPW land toward the debt of the new DPW site. Draheim said that she and City Manager George Lahanas had spoken about using some of the proceeds for improvements to the Hannah Community Center.

Meadows said he thought all proceeds had to go to pay down the debt on the new DPW site. Draheim asked that the matter of what to do with proceeds of the sale be put on the agenda for Council’s discussion-only meeting on March 12.

A site plan and SUP application for this property should be expected in the near future, as the land’s sale is contingent on Council approving both.

Dreger indicates that ELi will use the Freedom of Information Act to try to find out what happened in the lead-up to this purchase agreement.

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