Lots of Big Items on East Lansing Council’s Agenda This Week

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Monday, February 17, 2020, 7:30 am
Alice Dreger

This Tuesday’s meeting of City Council is a “discussion-only” meeting, which means no votes are anticipated. But that doesn’t mean important things won’t be happening, as Council is set to discuss a number of big issues and to give staff a sense of where the Council wants to go on those issues. Here’s a rundown based on the posted agenda:

Discussion of the possible sale of parking Lot #4 to MSUFCU: We have a special separate report on this issue posted here.

Review of Council’s policy on tax increment financing (TIF): City planning staff has asked Council to review its 2017 TIF policy to see “whether it is currently in alignment with the Council’s goals or whether changes are desired.” TIF has been a hot political issue in East Lansing, and the current policy focuses on use of TIF for public infrastructure and environment cleanup, but leaves a lot of discretionary space.

Non-motorized plan update: East Lansing’s Non-Motorized Transportation Plan dates back to 2011, and a lot has changed here since then. Director of Public Works Scott House is looking to send out a Request for Proposals next month to find a consultant who could do a draft update of the plan. Read more via the agenda.

Above: Skater on the recently rebuilt bridge over Hagadorn Road (photo by Raymond Holt)

Possible sale of the public land under the Marriott downtown: This one is complicated. Here’s a snapshot.

In 1985, the City helped the first really big downtown redevelopment project by entering into a complex public-private partnership enabling construction of the Marriott Hotel and attached office space, retail space, and underground parking garage. The project is known as University Place.

The City owns the University Place land as well as the parking garage. Under the original agreement, the private developers/owners have paid and continue to pay only $10 per year for a total of 40 years for the use of the publicly-owned land. The City is now paying out about $30,000 in general maintenance every year, and it gets income from the parking garage.

Above: The University Place complex (photo by Aron Sousa)

This development project used tax increment financing (TIF) to pay for the underground parking garage. The idea was that after 30 years of TIF to pay for that garage, the City would finally obtain real estate taxes on this property for the City’s General Fund.

Well, that didn’t work out, because the parking garage needed major repairs at that point. In 2017, as the 30-year-TIF was ending, the TIF got extended another 30 years to pay for parking garage repairs. (Yes, this is a 60-year TIF.)

The original idea was also that after 40 years, the City would finally start seeing real income on the property from lease payments for the hotel and office space. Indeed, the 40-year $10/year ground lease will end in March 2026, and at that point, Columbia Sussex, the company that owns the hotel and office space will have to start paying much larger lease payments — around $500,000 annually to the City.

Facing those big payments, claiming the office space is going to be a money-loser, Columbia Sussex is offering to buy the City’s land for $3.5 million. The City says their analysis suggests the land is worth more in the range of $4.8 to $5.8 million. Staff wants to know what Council wants to do. The voters would have to approve any land sale. The agenda has more details, and we’ll bring you a follow-up after the discussion.

Rezoning the Evergreen Properties: Proposals from developers interested in redeveloping the DDA’s properties along Evergreen Avenue are due Monday, Feb. 24. In the meantime, Council has been working on laying groundwork for that redevelopment.

Last week, a 3-2 majority voted to take the properties out of the Oakwood Historic District. On Tuesday, Council will discuss rezoning the properties to allow for much taller buildings than the current zoning allows.

Staff may be interested in pushing this rezoning now rather than later to make the DDA’s properties more marketable for sale, but also because the Lot 4 MSUFCU project would probably require rezoning of the Evergreen Avenue properties, based on East Lansing’s current zoning regulations.

Additionally, staff may want to know now what Council members will tolerate in terms of height on Evergreen Avenue, before they review developers’ pitches. Yes, it’s fair to ask why this issue didn’t get worked out before developers were asked to pitch ideas. The answer would be that it’s a pretty controversial issue.

Plea-bargaining policy for driving with a suspended license: Council will again take up this issue, which it started discussing at the January 14 discussion-only meeting. The agenda for Tuesday includes a memo from City Attorney Tom Yeadon that suggests bringing the City Attorney’s prosecution approach for three types of Driving While License Suspended (DWLS) more in line with what the Ingham County Prosecutor’s office does, including lowering fees.

ELPD vehicles parked with the Center City District project in the background (photo by Gary Caldwell)

General Fund financial forecasts: Finance Director Jill Feldpausch is expected to present a five-year forecast of the City’s General Fund to provide Council a sense of what the City’s financial future looks like from here.

Income tax update: Income Tax Administrator Damar Boyd will be presenting an update on that new tax. A graph provided in conjunction with the agenda shows the City has taken in about $11.6 million for 2019. The City expects there may be a refund rate of about 15 percent, based on other Michigan municipalities’ experiences, and administrative costs are expected to run around $400,000.

Want to weigh in on any of this? You can speak to Council shortly after the beginning of the 7 p.m. meeting during “communications from the audience” and you can also write to Council via email. In general, speaking in person is more effective, and speaking and also sending email is the most effective strategy.


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