With Plans Revised, Hub-2 Comes to Council for a Decision

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Tuesday, February 18, 2020, 5:00 pm
By: 
Alice Dreger

Above: Rendering looking southeast, showing the existing Hub building at the left and the Farmhouse Fraternity rendered as a white box between the two new proposed buildings.

Core Spaces has knocked off about 12 feet and 2 stories in height from the big new apartment complex that the national student-housing developer wants to construct just south of its existing East Lansing Hub project.

But Core is still proposing two big new buildings on Bogue Street for what would be Phase 2 of The Hub East Lansing. If built as constructed, they would provide housing for about 1,700 residents, about three times as many as the first Hub, along Grand River Avenue.

Above: The existing Hub as seen from Grand River Ave. (photo by Raymond Holt)

The question is now what City Council will decide. Council is set to take up the matter for possible approval next Tuesday, Feb. 25, after East Lansing’s Downtown Development Authority weighs in with a recommendation this Thursday, Feb. 20.

The latest version of the proposal still calls for two buildings bookending the Farmhouse Fraternity, which apparently isn’t interested in selling.

Another view looking east along Bogue Street with the existing Hub at the left and the Farmhouse Fraternity shown as a white box between the proposed new buildings.

The two new Hub buildings would have the same kind of high-end amenities featured in Hub-1, including rooftop pools and catered social events, with furnished rooms and in-unit laundry facilities, all right next to campus.

But in this Phase-2 project, Core Spaces is hoping to offer many three- and four-bedroom units — something that would require changes to zoning regulations. East Lansing now has many studio and one-bedroom apartments in the new high rises, and Core Spaces’ reps say that market has been pretty much tapped-out.

Council has occasionally allowed projects that break the bedroom limits. In 2018, for example, a 3-2 majority of Council approved a series of 7-bedroom townhouses on Albert Avenue constructed by Hagan Realty. Those townhouses were each licensed for 8 renters, presumed to be students.

“The reality is you’re right across from campus,” Brian Hagan said, explaining the likely demographic of bedroom-heavy units, which are in high demand.

In public meetings, reps from Core Spaces have been noting (correctly) that three- and four-bedroom units make the per-student cost significantly lower. They call this “affordable housing.”

Another rendering of the proposed project.

But some local landlords call it a possible disaster, as they see this new housing undermining the local housing market as it has developed so far.

At the January 21 meeting of City Council, landlord Richard Foster came forward to say there is an “excess” of apartments being built. Foster owns “The Element” across Grand River Avenue from The Hub. He said The Element is presently fully rented, “but not for next year, and that’s the point.”

Telling Council that long-time East Lansing landlords were expressing worry to each other, Foster called on Council to “be considerate” of local landlords “who have been here for decades and have stabilized this community.” He said that if more housing is built, rents will drop.

Whether this all is a good or bad thing depends on your point of view. You won’t hear renters complain about having more choices, lower prices, and more leverage over landlords, after decades of students feeling they are forced to sign leases with big deposits almost a year in advance (something Mayor Pro Tem Aaron Stephens made an issue of in previous years).

But some landlords warn that a dip in rental prices could mean devaluation of rental properties followed by lowered property taxes coming in to the City from those properties.

Above: the proposed project looking northeast.

Still, Council might see The Hub as worth it, as Core Spaces is building here without tax increment financing (TIF). That means that property tax payments will increase significantly as soon as the buildings are occupied.

Hub-1 is bringing in about $366,000 a year in property taxes just to the City of East Lansing — nothing to sneeze at for a City desperate for more tax dollars.

And that figure doesn’t count the other forms of tax the new Hub is bringing to East Lansing, including “personal property tax” (tax on material goods owned by businesses) and income tax, or the money Core Spaces is now paying in tax toward East Lansing Public Schools, CATA, Lansing Community College, county-based healthcare for the underinsured, and Ingham County trails and parks.

Three times more Hub means a lot more in taxes, with no TIF. If comparable, Hub-2 would bring in over a million dollars a year just to the City of East Lansing for the general fund, solid waste, and public library.

And if the new Hub buildings are constructed and all these big complexes draw students out of single-family-house neighborhoods, lowering prices and calming party-prone weekends, some think those neighborhoods might see more renting by graduate students and families wanting access to East Lansing Public Schools.

Additionally, landlords might be forced to spend more to upgrade older properties in order to compete.

Another rendering of the proposed project.

Of course, while some residents and elected officials have said for several years that they hope all this will happen, there is no way to know yet if it will.

Some have feared that the large student-purpose-built apartment complexes in the Northern Tier could turn problematic as the population of students shift south in response to more new housing being available near campus.

And MSU administrators haven’t been thrilled with the idea of lots more off-campus housing, as off-campus housing continues to compete with MSU’s dorms. Not only does more off-campus housing threaten MSU’s housing income, it also puts students out of the reach of some of the university’s regulatory powers over student behavior and safety.

The Council has not yet revealed what it might decide about this fourth major housing development in East Lansing near campus in rapid succession. City staff have issued a Request for Proposals for a housing study, but there’s no word on when that study will actually be available.

In December, Planning Commission voted unanimously against recommending the Hub 2 project to Council. At that time, the two proposed buildings came in at 14 stories and 152 feet tall. They are now designed at 12 stories (including parking) and about 140 feet tall.

The reduced height addresses one major concern Planning Commission had — that the height exceeded limits in the zoning code. The new height puts it right around the same height as the existing Hub, the Landmark of Center City, and The Abbot, now under construction at Abbot Road and Grand River Avenue.

Another rendering provided by the developers.

The new design also attempts to address issues commissioners raised with the challenging back-alley access of the prior Hub-2 design. The back alley is how the in-building parking would be reached and how fire trucks would access the rear of the structures.

But the new design doesn’t address another major concern Planning Commissioners had: the population density the buildings would add in the Cedar Village area — an area formally known as “the East Village.”

What Planning Commissioners did like about the Hub 2 design was the architectural look, so Core Spaces’ team has not changed that. The design is meant to evoke the classical elements of MSU’s collegiate architecture while also providing relatively modern streetscape feels, with light-filled lobbies and a welcoming, human scale on the ground level.

Above: The streetscape as rendered by the developers.

Because this whole area is subject to a unique form-based code instituted in 2007 under a failed attempt to draw large numbers of non-students to live there, in the event a majority of Council decides to go with this project, various zoning codes will also have to be altered. This approach is a pet peeve of many City leaders, including those on Planning Commission, who are weary of zoning codes being changed for projects instead of the other way around.

The Council is facing this decision at a time of complicated transition. East Lansing is trying to sort out the differences between its existing zoning code and the recently approved Master Plan, and also trying to decide whether it wants to adopt a new form-based code for the whole downtown — a proposal that the Michigan Economic Development Corporation (MEDC) has been urging on East Lansing for a few years.

In short, the new Hub proposal is big, the complicated context even bigger. Consequently, many people in this community view Council’s decision on this project as no less than huge.

Want to weigh in? You can speak to Council shortly after the beginning of its 7 p.m. meetings 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.

 

Related new ELi report: Spartans Will Live in Luxury: That's the Message of 'The Hub Lifestyle' Brand

Note: This article was updated on Feb. 19 to note corrected figures from the tax assessor. We corrected the amount that Hub-1 is bringing into the City of East Lansing; we had it at about $200,000/year and it is actually approximately $366,000/year. We added that this means Hub-2, if comparable, would bring in over $1 million/year just to the City of East Lansing.

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