Negotiations Over New Hub Towers to Continue as Council Approves Consultant for Housing Study

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Wednesday, February 26, 2020, 2:30 pm
Chris Gray

Above: Mark Meadows and Ruth Beier (photos by Raymond Holt) and a Hub project rendering.

Developers for two large proposed towers on Bogue Street resurfaced at the City Council meeting Tuesday night, and their plans survived to be sent back to the Planning Commission for further review and debate.

Council members are hoping to have back results of a housing study before they are asked again to decide on the proposal. Long-time local landlords came to speak against the project Tuesday night, but the developer’s representative responded that more choice is simply better for renters.

The Planning Commission had recommended against approval for two new Hub towers in December, noting that the proposed buildings were too tall according to the existing zoning code for the East Village area, which govern this part of the City. Planning Commissioners also expressed reservations about the density of population the project would mean for that area and about vehicular accommodations.

The student housing towers are proposed by the same developer, Chicago-based Core Spaces, as built The Hub at the corner of Bogue Street and Grand River Avenue. In response to criticisms of the project, the Core team had made certain revisions before coming to Council.

Above: The revised Hub proposal rendered, looking southeast down Bogue Street with the existing Hub to the left.

By voting to send the revised Hub plans back to the Planning Commission, the City Council kept the discussion of the development alive while also putting off a decision until a professional housing study can be conducted for East Lansing.

City staff’s choice of a consultant for that study was approved later in the evening, with a contract limit set at $40,000. LandUseUSA was hired in part because, staff said, the data they will assemble will be of the kind staff can continue to collect and compare years down the line.

On Tuesday, Core Spaces showed they had compromised in their plans for the Bogue Street project, lowering the height of the towers from 152 feet to 140 feet – the highest allowed in the East Village. The developers also decided to conform to the requirement for 20-foot sidewalks along Bogue Street and have worked on making the alleyway more accessible to trucks, including firetrucks.

In a move that could ultimately aid these developers, the Council did vote through a series of zoning changes to the East Village form-based code, reducing the first-floor height requirement for commercial retail from 17 feet to 15 feet, as well as allowing Council to approve lower story-heights for residential housing on all streets except Grand River Avenue.

The high ceilings required for commercial space now won’t be absolutely required for residential units like the sidewalk-level townhouse-style apartments that Core Spaces has proposed for portions of the towers’ bases.

Above: Street-view rendering of the proposed project.

The Council also changed the total-building height restrictions for the East Village from “140 feet and 10 stories” to “140 feet or 10 stories” – matching the language restricting heights in the downtown core and green-lighting the compromise height/story design for the towers.

The plan for the new Hub towers still doesn’t conform to other parts of the form-based zoning code for the East Village, which continues to bar apartments with four or more bedrooms. The Council didn’t change the bedroom restriction, but three Council members – Jessy Gregg, Aaron Stephens and Lisa Babcock – expressed support for altering that rule at a later date.

Lansing attorney David Pierson, representing Core Spaces, focused his arguments on those two points. He said the City of East Lansing was being inconsistent on its bedroom and height restrictions for the East Village, since some other zoning areas of the City, even relatively nearby, allow some of what Core Spaces wants to do.

Pierson noted that Core Spaces wants the units in their new buildings to be 25 percent three-bedroom apartments and 25 percent four-bedroom apartments because those are the apartment mixes in most demand. He said in his presentation that 71 percent of the Skyvue apartments near Frandor Shopping Center are four-bedroom, as are 100 percent of the Manor at Campus View apartments downtown.

Council Member Mark Meadows has voiced the strongest opposition to allowing four-bedroom units in the East Village, arguing that those units would permanently exist only as student housing, not the diverse housing stock he desires. Meadows described four-bedroom units as “cash cows” for developers.

Above: Jessy Gregg at the meeting (photo by Raymond Holt)

Gregg questioned the City’s ability to manipulate the real estate market to get the exact housing stock it wants and said City leaders may find that students will always express the highest demand for housing downtown. She also felt the restrictions on the number of bedrooms and the height restriction discrepancies were relatively arbitrary.

Mayor Ruth Beier said she wanted to repair and improve the City’s relationship with Michigan State University’s administration and was nervous about upending the school’s own housing system through a project like this.

“We don’t want to blow up their housing program. If you would work with MSU and get them to say they are indifferent to this project, that would help,” Beier told Core Spaces’ team. Stephens agreed with Beier.

Above: Ruth Beier speaking at the meeting (photo by Raymond Holt)

Meadows, on the other hand, brushed aside concerns of offending the MSU administration.

“I don’t think it’s our responsibility to preserve the housing program on campus,” Meadows said, adding that MSU is essentially running a corporation. “More competition is a good thing for students and others who rent.”

The Council approved sending the revised proposal to the Planning Commission at the behest of Planning and Zoning Administrator David Haywood and with the consent of Core Spaces.

Above: Mark Meadows responds at the meeting (photo by Raymond Holt)

Meadows agreed to seeking more deliberations at the Planning Commission level but said if he saw the Hub project bounce back to the Council in March, he would act to table it.

“I think it’s necessary to get our housing study done before we approve this,” Meadows said.

Core Spaces opened The Hub student apartments last August at the corner of Bogue Street and Grand River Avenue. The new development suffered delays in opening and caused chaos for students moving in, but on Tuesday, one tenant came to speak approvingly of her apartment life at The Hub, calling the lifestyle amenities, including a rooftop pool, unlike anything else offered for Michigan State University students.

A second student-resident of The Hub also spoke to Council, saying he believed Core Spaces’ projects were “going to help other companies elevate their standards” for East Lansing rental units. He said he was glad to have the option of renting from someone other than DTN, a major landlord in town.

Before the first Hub tower even opened, Core Spaces had unveiled plans to buy up most of the properties south of the first tower to build two new, even taller towers. The towers on Bogue would flank and dwarf The Farmhouse fraternity house, which has refused to sell.

A number of local landlords spoke in opposition to the project on Tuesday, arguing that the student housing market was already saturated and that a growing vacancy rate was undermining the market.

“There is going to be a housing study done that will indicate the need ... for more student housing or less student housing,” Douglas Cron of Cron Management told City Council. “I think it’d be prudent to wait on that and to see the results of that.”

Others in the apartment management community, including Mark Fisk, Nancy Marr and Matt Hagan, expressed similar reservations at the need for the new towers.

Hagan said properties on the north end of town had suffered from the increased development downtown, contributing, he said, to crime and shootings. He warned of housing left in disrepair if management companies cannot cover their costs with adequate rent prices.

Cron cast particular ire at the way the towers would impose upon The Farmhouse, one of the agricultural fraternities at MSU, originally a land-grant college dedicated to agricultural science.

“I think to build big buildings on either side of them is a disgrace,” Cron told Council. (Beier also did not like that aspect of the design.)

Rodney King, Senior Vice President of Development for Core Spaces, countered the other landlords’ position, arguing that increasing housing supply was the most natural way that the free market keeps prices down for tenants.

“Vacancies are a sign of a healthy market,” King said. “That means the landlords are not in control.”

“We’re asking you to allow us to invest hundreds of millions of dollars into the East Lansing community without any public subsidy,” King added.

ELi has reported that the Hub is generating about twice as much in tax revenue as what the tax assessor had estimated it would, and that the new Hub towers, if approved and built, could generate about $1 million a year just to the City of East Lansing.

The City has not yet indicated when the Hub proposal will be discussed again at Planning Commission.

At Council, the developers made reference to a tentative offer of providing East Lansing with a half-million dollars for use on affordable housing, to sweeten the pot. The idea was something like seeding a revolving fund that the City could use to rehab student rental houses into space suitable for families who rent or to "flip" a house to an owner-occupied home, but the details had not been worked out. We may hear more about this in the coming months.


Note: The last paragraph was added on Feb. 27 as the information was inadvertently left out of the original report. © 2013-2020 East Lansing Info