More Bad News for the Royal Vlahakis Proposal
Above: Properties along Evergreen Avenue, including Hagan's at the far left, and the DDA's properties to the right.
Landlord/developer Matt Hagan won’t sell his property on Evergreen Avenue to development team Royal Vlahakis.
That means more trouble for those developers, who had hoped to roll Hagan’s property into a $190 million redevelopment encompassing a large block of land including Dublin Square.
Royal Vlahakis wanted Hagan’s property at 404 Evergreen Avenue, which currently holds a three-story apartment rental building (shown above), for the “Park Place” project.
Obtaining Hagan’s property would have meant Royal Vlahakis could stretch their development all the way north to the City of East Lansing’s Parking Lot 15, which they wanted to also include in the redevelopment. The map below shows the proposal’s planned area in red.
Since mid-December, Royal Vlahakis have been in an exclusive contract with East Lansing’s Downtown Development Authority (DDA) to purchase the series of properties owned by the DDA along Evergreen Avenue, just south of Hagan’s property.
Royal Vlahakis had permission to include Hagan’s property in their site plan proposal. But Royal Vlahakis had no deal with Hagan in terms of a sale.
Now Hagan says he won’t sell.
“Vlahakis did make me an actual offer [on the purchase] and I didn’t accept it,” Hagan told ELi this afternoon.
With various family members, Hagan owns many rental apartments around town. He gives as his reason for not selling that he is “very concerned about the housing (apartment) bubble that is being created” in East Lansing.
“I think there have been too many [rental apartment projects] approved too quickly.”
Three major redevelopments with student-focused apartments are already under construction in East Lansing, including Harbor Bay/Ballein Management's Center City project, DRW Convexity's project at the corner of Abbot Road and Grand River Avenue, and Core Spaces' The Hub at Bogue Street. ELi broke the story recently that Core Spaces wants to build a second Hub immediately south of the first.
Hagan’s decision not to sell to Royal Vlahakis means those developers will have to come back with a significantly smaller project to gain approval. That could negatively impact the finances of the plan, and, as ELi reported yesterday, Vlahakis has already said the developers have been struggling to make the finances work.
A major challenge posed by the area is the $5.6 million in debt owed by the DDA on the Evergreen Avenue properties. Those properties were bought at about three times their market value in 2009 by the DDA to support a since-failed redevelopment project.
On April 2, the DDA sent Royal Vlahakis a letter notifying them that the DDA may decide to void the exclusive sales contract and move on to offering the properties to other developers in early May. The DDA could decide to issue a Request for Proposals (RFP), which it has prepared, soliciting bids from all potential developers.
Recent decisions by Council allowing taller buildings downtown may make the DDA’s properties of more interest to more developers than just a few months ago.
Interest may also increase if Council moves, as expected, to take the DDA’s Evergreen Avenue properties out of the Oakwood Historic District. That would make redevelopment simpler.
Mayor Mark Meadows has suggested Hagan’s property should come out of the Oakwood Historic District, along with the DA’s properties.
Asked if that’s what he wants, Hagan told ELi today, “Being that [the building on] 404 Evergreen is relatively new, it seems to make sense to me to have it removed if they are looking at adding and subtracting properties in that area.”
Hagan did not rule out selling his property if a developer wants to build something other than student rental housing in that location.
Just across from Hagan’s property, at 341 Evergreen Avenue, developers DRW Convexity have approval to build a five-story residential building including 72 income-restricted rental apartments and one level of private on-site parking for 26 cars. (Those apartments will not be available to students who are dependents.)
That building won’t be constructed for several more years. At the moment, that site is being used as a staging area for DRW Convexity’s construction projects just east of Peoples Church.
There, along Grand River Avenue, DRW Convexity is building a 10-story hotel for The Graduate chain and a 13-story building at the corner of Abbot Road. The taller building will house market-rate rentals apartments for about 370 residents, retail space, and two floors of private indoor parking.
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