Following Tense Council Discussion, Demolition of Blighted Buildings Delayed

Tuesday, December 13, 2016, 9:46 pm
By: 
Alice Dreger

The new owners of blighted buildings along Grand River Avenue in the Park District agreed this past April to demolish all the vacant structures they own there by the end of this year. But tonight, their representatives came to East Lansing’s City Council to request an extension of that deadline in order to protect a possible $10 million state tax credit that the developer says is absolutely essential to the project’s success. City Council unanimously agreed to extend the demolition deadline for the vacant properties to January 31, 2017, with the understanding the deadline may well be pushed off again in January.

Tensions ran high at the meeting, particularly in dialogue between Mayor Mark Meadows and lawyer David Pierson, representing the owners of the properties at issue. Meadows said there had not been adequate movement on the part of the new owners towards demolition, because, for example, the properties had not yet been internally prepared for demolition through work like asbestos removal. “We don’t see evidence anything has gone forward,” Meadows told Pierson.

But Pierson politely objected to that characterization, responding that the developer had been moving everything as fast as possible, working not only with City Planning staff but with Planning Commission, Transportation Commission, the Downtown Development Authority, representatives of Peoples Church, and homeowners in the Oakwood neighborhood. (Disclosure: I fall into the last group.)

Meadows asked why the City didn’t yet have a Brownfield plan from the developer on file. (That’s the plan that lays out how tax increment financing would be used to support the project, if Council approves the plan.) But Pierson responded that they had submitted a Brownfield plan to staff and were working with staff to get it officially before the City’s Brownfield Redevelopment Authority.

Meadows then pushed to have the Brownfield plan ready for consideration at Council’s January 10 meeting, when Council is set to review the site plan for the project. It’s unclear at this time whether this will happen, since the plan has not yet been formally reviewed by the Brownfield Redevelopment Authority, which it must do before reaching Council.

Pierson pointed out that the new owners have already completed demolition of the former Evergreen Arms apartments, a pair of vacant brick buildings that, following a foreclosure, they purchased along with the “big bank building” at 100 Grand River Avenue and with commercial buildings next to Peoples Church. Pierson cited this completed demolition as evidence of the good faith and good will of the new owners.

He noted that the Evergreen Avenue properties did not present any issue for the possible $10 million Michigan Business Tax credit. As attorney for the new owners, he believes that the properties along Grand River Avenue have to still be standing when the matter goes before the Michigan Strategic Fund board if the $10 million tax credit is to be obtained, and so they can’t demolish the Grand River Avenue buildings just yet.

Much of the discussion around this issue—a surprise late addition to tonight’s agenda—revolved around various rules with regard to Brownfields, tax credits, and the like. Council members tried to ascertain how demolition might happen sooner rather than later, but both Pierson and City Planning Director Tim Dempsey said they are still trying to get clarity at the State level about what exactly is required to secure and not jeopardize the $10 million credit. Dempsey called the issue “very nuanced.”

“To be frank,” Pierson, speaking for the developers, told Council, “the $10 million credit is absolutely critical” to this project. He said the developer had no interest in delaying demolition beyond what was necessary to make the project work. Responding to Meadows, Pierson said, “We have no intention of holding up the process.” He said that the developer had already spent about a half-million dollars simply developing and revising plans. He noted the plans had been revised—at significant cost—in response to dialogue with East Lansing’s citizens.

“We don’t want to hold this up any more than is necessary,” Pierson insisted. “None of us want those buildings there. There is no question it is a horrible blight on this community.”

Councilmember Shanna Draheim said that she understood everyone wanted the buildings demolished, and said she wanted to see in writing what the status is with the tax credit. She said she also wanted to see “pre-work” on the demolition done so that there was no unnecessary delay once demolition could happen. Other Councilmembers agreed. Draheim added that it was clear the developer had been very engaged with commissions and community groups for the last several months, and had been responsive to ideas and concerns raised.

Officially Council voted to approve extension of the demolition deadline to January 31, 2017, with an understanding that Council will revisit the matter at its January 24 meeting.