East Lansing Voters to Decide whether to Allow City to Sell Land for Park District Redevelopment

Wednesday, August 20, 2014, 9:49 am
By: 
Chris Root
Map highliting the parking lots on the ballot initiative

On August 6, the City Council voted to put a question on the November 4 ballot asking the electorate to authorize the City to sell three parking lots needed for redevelopment of the west end of downtown leading down to Valley Court Park, an area being called “the Park District.”

This authorization will only pass if 60% of the voters vote for it; the City Charter requires that a super-majority of voters approve sale of public properties of this value. 

 

Here is the full ballot language:                                         

SALE OF CITY-OWNED PROPERTY

For the purpose of redevelopment into a mixed-use development that includes commercial, residential and parking, shall the City Council be authorized, but not mandated, to sell for fair market value all or portions of the following parcels of real property consisting of approximately 1.3 acres:

Parking lot # 4, located on the northwest corner of Albert Avenue and Abbot Road.

Parking lot # 8, located east of Valley Court Park between Evergreen Avenue and Valley Court

Parking lot # 15, located across from City Hall between Abbot Road and Evergreen Avenue

Why are East Lansing voters being asked now to authorize this possible sale of these parking lots with 165 parking spaces?

The City wants the authority to sell the parking lots so they can be used in redevelopment proposals currently being considered for the Park District. (The decade-long debate about redevelopment  for this area is too complex to recount here.)

At the August 8 City Council meeting, Mayor Pro Tem Diane Goddeeris argued in support of placing the question on the ballot now, saying that citizens can trust the Council to use the normal review process to evaluate the redevelopment proposals. She said that the vote to authorize sale of the parking lots is just one step in the process that should be taken to avoid delays in redevelopment.

Councilmember Ruth Beier, the single “no” vote on the Council regarding putting the question on the ballot, argued that selling the parking lots soon “will almost surely be mostly for student apartments … [T]hat crowds out other options, … and once it’s done, it’s done.” Beier also pointed out that authorizing the city to sell the parking lots won’t necessarily lead to demolition of the boarded-up bank building at Grand River Ave. and Abbot Rd. This is a privately-owned building in a different part of the Park District.

Four citizens spoke against putting this question on the November ballot. Ralph Monsma said the vote was premature: “The timeline … pushes much of this decision-making [on the Park District projects] well past the time that ballots will go out. As a result, we are going to have a very confused and maybe under-informed constituency.” Jeffrey Astrein, President of West Village II Condominium Association, argued that there is not yet any viable plan for development, the proposals being discussed will require more parking than this area can handle, and tax incentives that the City is likely to offer to the developers will increase the City’s $185 million debt.

The City is currently considering two developers’ proposals for different parts of the Park District. The first proposal is from DTN, a major apartment manager in the city. DTN was chosen as the preferred developer of the publicly-owned parcels in a selection process that began two years ago. The DTN proposal includes parking lots #4 and #15. (See map attached to this article.) The second developer is the Park District Investment Group, LLC, the latest name for the owner of the vacant bank building at Grand River Ave. and Abbot Rd. That building is the core of the City Center II development that the City Council decided in June 2012 was financial unfeasible.  The PDIG proposal does not use any of the parking lots. (Parking lot #8, north of People’s Church, could have multiple uses, including realigning Albert Ave., adding on-street public parking, and adding some spaces to People’s Church parking.)

The City’s formal review of the two proposals began at the Planning Commission on August 13. Five buildings are being proposed that would significantly increase the height, density, and traffic in the west end of the city and the area surrounding Valley Court Park. PDIG proposes a 10-story building on 1.1-acres extending from Grand River and Abbot to People’s Church. It would include a 6,846 square foot restaurant open until 2 am on the first floor, a hotel on floors 2-4, and 102 apartment units (192 beds) on floors 5-10. PDIG also proposed to tear down its Evergreen Arms apartments adjacent to Valley Court Park and put up a new four-story building with unidentified retail – or possibly apartments – on the first floor and 41 apartments (86 beds) on floors 2-4. DTN plans to build three buildings, two of them 8 stories tall. Next to Dublin Square (on parking lot #4), it plans an 8-story building with a restaurant on the first floor and 84 apartments (154 beds) above. Along Evergreen Ave., it proposes an 8-story structure on 1.62 acres to include a parking ramp (with somewhere between 4 and 8 levels), 5,430 square feet of retail space, and apartment units wrapped around the South and West sides (at least 137 units / 281 beds). North of the AT&T building on Abbot Rd. (on parking lot #15), DTN plans a 30-apartment, 5-story building targeted at seniors age 55+, built above 24 public parking spaces and an entrance into the parking ramp across the back alley on Evergreen Ave. All these plans are preliminary and subject to change.

Selling the three parking lots could yield about $1.6 million at “fair market value,” as stipulated by the ballot language, but the costs of the two proposed development projects to East Lansing taxpayers is likely to be much higher. The DTN “Preliminary Financial Overview” projects that the city will take out a $3 million loan and that DTN will seek $8.5 million in tax increment financing (TIF) incentives – future tax payments from DTN that will be reimbursed to DTN rather than paid to the city and other government units once the development is built. PDIG has not yet requested financial incentives, but it is expected to do so.

The parking ramp could also be a large public expense. A July 31 memo from city staff written for the City Council August 8 meeting said spaces in the parking lots will need to be replaced by “new parking spaces in a publicly owned or controlled structure.” City Planning staff confirmed at the August 13 Planning Commission meeting that it is “quite likely” that the parking ramp that DTN proposes will become part of the municipal parking system, which raises the question of public financing of this facility, at a cost that DTN estimates at $2.2 million per level of parking. 

The question on the November ballot is a very unusual opportunity for East Lansing voters to have a say about redevelopment plans for the City. A vote for the ballot question would authorize the City to sell the three parking lots while it continues to negotiate with DTN and the Park District Investment Group over the shape of their proposals and the financing that the City will provide for them. A vote against would enable citizens to decide on the parking lots sales after they have more information about the plans for development and public financing.

[More information about the Park District plans is available from the City’s webpage on the project (http://www.cityofeastlansing.com/parkdistrict).

The Staff Reports linked to the August 13 Planning Commission agenda are at (http://eastlansing.granicus.com/GeneratedAgendaViewer.php?view_id=2&clip_id=331).]

 

Chris Root is co-chair of East Lansing Citizens Concerned (ELCC), a group that encourages residents to become involved in economic development issues in the city. ELCC is not taking a position on this ballot question.

 

Parking lot #8 - Looking East. People's Church to the right, Valley Court park behind this view

Parking lot #8 - Looking East. People's Church to the right, Valley Court park behind this view

 

 

Parking lot #4.  Looking East.  Dublin Square restaurant on the left.

Parking lot #4.  Looking East.  Dublin Square restaurant on the left.

 

 

Parking lot #15.  Looking East. City hall is across the street.

Parking lot #15.  Looking East. City hall is across the street.

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