New Downtown TIF Plan Up to $1.45 Million

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Wednesday, August 19, 2015, 7:50 am
By: 
Alice Dreger

Image: Artist’s rendering of the planned building for 565 East Grand River Avenue (where the old Taco Bell building now is).

Developer David Krause is asking East Lansing’s City Council to approve a tax increment financing (TIF) plan of about $1.45 million, saying he cannot build a planned new retail and apartment building downtown without public financial support.

The project would be at 565 East Grand River Avenue, catty-corner to the Broad Museum and imitating architectural elements of the Broad. (Read more.) The first floor would have retail space and the four floors above would be apartments. Krause told Council last night that, following the request of Councilmember Kathy Boyle, the project has been redesigned to remove four-bedroom apartments and to include only one-, two-, and three-bedroom units. Krause says the whole project will cost about $8 million.

The TIF plan before Council last night calls for the developer to be reimbursed up to $1,455,718 for “eligible expenses,” including preparing the site, demolishing existing structures (including the old Taco Bell building), and turning one lane of Bailey Street into a wide public sidewalk/plaza. Bailey Street currently has three lanes where it intersects Grand River Avenue, including two right-turn lanes. One of those would be used for the widened sidewalk/plaza.

In response to questions from Councilmember Ruth Beier, who is sharply critical of the City approving more TIF for anything other than brownfield (environmental cleanup), City staff member Lori Mullins estimated this public plaza space will cost about $200,000 in TIF.

Beier expressed displeasure that $200,000 that would otherwise go into the City’s tax coffers will instead be used to build another public plaza. There was much discussion at the meeting about whether the space is really a plaza or an extra-wide sidewalk. Krause told Council it would have benches and attractive plantings. City Manager George Lahanas expressed support for the space.

Beier said that her “general feeling” is that this project is not worthy of a tax incentive “because it is basically student housing with retail on the ground” level. She said she wanted to see alternate TIF plans, including one that did not include the public plaza.

The TIF plan will be discussed at a public hearing at the September 1, 2015, meeting of Council, where the matter is likely to be decided. Mayor Nathan Triplett asked Mullins to present then how this design relates to the City’s urban design guidelines.

 

Read more about TIF in East Lansing here. Read about how East Lansing's TIF use compares to nearby municipalities' here.

Reminder: You can communicate with Council in person at its weekly meetings or write to Council directly at council@cityofeastlansing.com. You can speak or write on any issue involving the City, not only what is on the published agenda.

UPDATE: These sentences were added at 9:20 am on publication date in response to a reader's question: "Bailey Street currently has three lanes where it intersects Grand River Avenue, including two right-turn lanes. One of those would be used for the widened sidewalk/plaza."

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