Downtown Businesses “Panicking” Over Construction-Related Downturn

Wednesday, August 15, 2018, 8:54 am
By: 
Alice Dreger

The downturn in business caused by Center City District construction has cost local small downtown businesses millions of dollars and may yet cause the death of several, one local business owner told East Lansing’s City Council last night.

His remarks were tinged with frustration and anger over the City’s perceived favoritism of national chains, and forcefully echoed in public what many other business owners have been saying on and off the record.

Pat Riley, co-owner of Harper’s Restaurant and P.T. O’Malley’s bar, came to Council last night to talk at length about the problem and to seek help from the City. He warned that the project being approved by DRW/Convexity for the vacant lots downtown could just make things even worse.

Riley had been a vocal supporter of the Center City District project, and told Council last night, “I’m still for development.” But, he said, hard lessons had been learned.

Riley told Council the project “has cost downtown businesses millions in lost revenue.” And, he added, lost revenue can’t be “made up” when construction is done: “The revenue we have lost will never be regained.”

Noting that the City has opted to give over sections of public streets to the construction project, including on Albert Avenue and Abbot Road, Riley said the business owners felt misled about what the construction was going to entail in terms of cutting-off of access for potential customers. He urged Council to get Albert Avenue back open fully by Labor Day, a goal that seems unlikely to be met.

When construction is over, Riley warned, it won’t look like “East Lansing is back in business,” it will look like East Lansing has gone out of business, because of how many shops and restaurants will close due to losses. He urged Council to get rid of so many construction signs that signal “go away” to customers, and to open up streets.

“It’s like Sunkist [the orange drink company] came and opened up national headquarters here,” Riley said, referring to the sea of orange construction signs.

Riley also decried what’s happening with the new parking garage. He said that businesses had been assured the number of parking spaces that had been in Lot 1 would be available in the new parking garage by December 2018. Now, he says, word is they won’t be available until September 2019.

But, he says, parking for the new Target store will be available earlier. He suggested this is unfair and slanted in approach.

He also alluded to problems that the construction is causing nearby property owners, including water in basements, leading to insurance claims. He asked for the big developers to pay for a public relations campaign to let people know East Lansing is open for business – more than the EL Buzz campaign has done.

Riley talked about experiencing “bait and switch” on the Center City development. Lead developer Mark Bell of Harbor Bay Real Estate had told him and other restaurant and bar owners that construction workers would visit their establishments and make up for otherwise lost revenue. That has turned out to be untrue, says Riley. The workers bring coolers with drinks and food.

“They are not intending to harm us,” Riley said of the developers, “but the harm is real.” He said the businesses were not getting “a fair shake” in the system.

Harry Saites, co-owner of Lou & Harry’s, followed Riley at the podium for public comment, saying he was “one-hundred-percent” for the development. But, he said, “you have to remember us. At the end of the day, the big chains leave. The local people are the ones that stay.”

“We are panicking,” he told Council. Businesses like his are facing the fall season – when most of their money is made – wondering if customers will continue to go elsewhere, wondering how they will survive.

ELi has previously reported other business owners’ warnings and concerns. We also recently reported that the Center City building on the Grand River Avenue side is now being advertised as “purpose-built student housing,” even though it had been sold by the developer to Council as being for a mixed-market including non-students.

In a letter to a constituent in this week’s “communications to Council” packet, Mayor Mark Meadow wrote on July 24, “I was just as surprised as everyone to see that the developer was advertising the Grand River property as ‘student housing.’ The Grand River housing was approved as market rate housing and was to be advertised as available to anyone.”

Above: Bob Tresize of LEAP and lead developer Mark Bell of Harbor Bay Real Estate celebrating the project's construction.

Some business owners had been skeptical of Bell and his project, being co-developed with Ballein Management, from the start. Linda and Tom Dufelmeier of Mackerel Sky warned that the construction and removal of Lot 1 would lead to a very dire situation for downtown businesses.

The Downtown Management Board (DMB) has been trying to work with City staff to bring more customers downtown. Until recently, Luke Hackney of RetroDuck chaired the DMB and helped to spearhead local business responses to the problems. But Mayor Mark Meadows recently removed Hackney from the DMB as he was appointed to the Downtown Development Authority (DDA).

Asked why he did not move to keep Hackney as Chair of the DMB, Meadows has not responded except to refer to a 1997 policy resolution that limits to two the number of people who serve on both the DMB and DDA.

After Riley and Saites made their comments to City Council last night, Council Member Aaron Stephens called on City Manager George Lahanas to arrange discussion at next week’s Council work session on what can be done to help downtown businesses. That meeting will be on Tuesday evening, August 21, starting at 6:30 p.m.

 

Correction: This article originally had the wrong date and start time for next week's meeting in the last sentence. It is now corrected.

 

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