DDA Likely to Delay Major Vote on Evergreen Properties

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Friday, September 20, 2019, 8:51 am
Chris Root

Above: Royal Apartments' Michael Henneman and his attorney Brent Titus at yesterday's meeting. (Photos by Raymond Holt.)

Faced with yet another appeal from the Royal Vlahakis development group to build a 9-story, 110-foot-tall mixed-use building on the Evergreen Avenue properties owned by the Downtown Development Authority, yesterday East Lansing’s DDA’s Project and Infrastructure Committee voted unanimously to defer any further action on this site until a specially-scheduled DDA meeting on October 10.

The DDA will wait for City Council’s action on the Royal Vlahakis proposal on October 8 before it does anything further with the properties.

On August 22, the DDA voted 7-4 to let expire the exclusive agreement made last December between Royal Vlahakis and the DDA.

But yesterday, a team from the developers – six people from the East Lansing area and Illinois – returned to the DDA Executive and Finance Committee. They came with a new draft “buy/sell” agreement that would once again give them exclusive right, this time through mid-January, to seek various required approvals for their project at this site.

That time period is an estimate of how long it might take to obtain various necessary approvals and agreements.

Below: Paul Vlahakis

Like the agreement the DDA signed with the Royal Vlahakis team in December, in the new agreement the developers would agree to purchase the land for about $5.6 million, which would cover the cost of the DDA’s remaining debt on the land. (The developers are now operating under an LLC called HSV ParkPlace, created especially for this project, a common practice in commercial real estate transactions.)

Yesterday the DDA also considered returning $60,000 to the developers for four payments of $15,000 that the developers made for each of four 30-day extensions of their earlier purchase and sale agreement. This suggestion was an initiative of Peter Dewan, chair of the DDA, and not of the developer, according to Paul Vlahakis.

Also on the DDA committee’s agenda yesterday was consideration of a final version of a Request for Proposals (RFP) to invite proposals from other developers for projects on this site.

It had appeared from discussion at the DDA’s August meeting that the DDA would move to release the RFP shortly after the purchase and sale agreement with HSV ParkPlace, LLC ended.

But after lengthy discussion yesterday, the committee decided that the full DDA should not act on either option – or on returning $60,000 to the developers – at its meeting next week but, instead, should wait and see what the Council does on October 8. That’s when the Royal Vlahakis proposal will come to Council for a public hearing.

It is not unusual for Council to vote on a site plan and Special Use Permit (SUP) for a project at the same meeting as the public hearing.

The Planning Commission voted 7 to 1 against recommending the Park Place site plan and SUP application at its meeting on August 21, sending a strong signal to Council.

The Council can approve a project even after a negative recommendation from the Planning Commission. But both Mayor Mark Meadows and Mayor Pro Tem Erik Altmann have voted against continuing the exclusive deal at the DDA, and Council member Ruth Beier has said she does not favor a large building at this site.

The remaining two members of Council, Shanna Draheim and Aaron Stephens, have not expressed enthusiasm for the latest version of this project.

Below: DDA Chair Peter Dewan, Director of Planning Tom Fehrenbach, and Jeff Kusler at yesterday's meeting.

The layers of deals that must be struck in this case make the situation legally complex.

As owner of the Evergreen Avenue land, the DDA must give a developer permission to submit a proposal on this site. But it is the City Council, not the DDA, that approves the site plan and SUP to allow for a building that is taller than what is allowed “by right” according to the City zoning code.

The Council and the Brownfield Redevelopment Authority (BRA), which has the same membership as the DDA, must also agree to any tax increment financing (TIF) plan.

A legal agreement that the DDA enters into that sets a timeline for all required City approvals is problematic because the DDA does not control all these decisions.

City Attorney Tom Yeadon pointed out that making promises about what could happen over the next four months is further complicated by a new Council being sworn in in early November.

City residents will elect three Council members on November 5. Because Draheim is not running for reelection, Council’s membership will change by at least one person, and possibly as many as three. (See ELi’s voter guide for more information on the election.)

The public is invited to speak at the Council’s public hearing on October 8, which will start at 7 p.m.. Documents about the project are available here.


Note: On Sunday, Sept.22, this article was amended to indicate that the DDA Chair, not the developers, suggested the return of the $60,000 in extension payments and to note that the committee decided to also put off that question under after Council’s public hearing. On Sept. 26, we corrected this to note that the vote was by the Project & Infrastructure Committee, not the Executive and Finance Committee.

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