Center City Developer Says His Claims “Should Not Be Mistaken as Facts”

Tuesday, June 13, 2017, 5:00 pm
By: 
Alice Dreger

Above: Mark Bell at Harper’s Restaurant last week for a public presentation of the Center City District proposal.

Asked today about why his public representations of the tax increment financing deal for his Center City District proposal appear inaccurate in significant ways, lead developer Mark Bell of Harbor Bay Real Estate wrote to ELi, “Let me please be very clear, I am making no representations that should be mistaken as facts.”

In the past week, while seeking public support for his controversial project, Bell has been making what appears to be an inaccurate claim, namely that the Tax Increment Financing (TIF) deal will cover only costs of public infrastructure. He has produced this claim in writing twice this week. [See update at end of article.]

The first instance is a handout provided at his company’s recent public informational events on the project at Harper’s Restaurant and Hannah Community Center. That handout says, “Finances provided by Tax Increment Financing [TIF] will only be used to develop public infrastructure. Zero Grand River expenses are included.” In other words, no captured tax dollars would be used to pay for costs associated with the privately-owned properties along Grand River Avenue.

In an emailed “share-points” document provided by Bell and being circulated by Betty Nocera, an East Lansing citizen who has strongly and publicly supported the project, Bell elaborated on this claim:

“Within the TIF, there are zero dollars dedicated to the private side of the development. To my knowledge, this will be the first TIF ever approved in East Lansing’s history where the developer is not receiving any money on its private improvements. Said another way, we aren’t even receiving any money to perform asbestos abatement, environmental or demolition on the Grand River Buildings. The narrative to the public needs to be this TIF is ONLY supporting public infrastructure.” (Emphasis as shown in original.)

Yet the $56 million TIF plan approved by East Lansing’s Brownfield Redevelopment Authority on May 23, and headed for Council for a possible vote next Tuesday (June 20), clearly specifies that the developer would be reimbursed for eligible expenses related to the privately-owned Grand River Avenue land, on which a 12-story privately-owned building would be constructed.

For example, contrary to Bell’s claims, expenses to be reimbursed specifically include site demolition and asbestos abatement for the Grand River Avenue properties. Also included in expenses to be reimbursed are costs associated with “deep foundations” and “tower crane rental and operation” for the Grand River Avenue private redevelopment.

A large proportion of the TIF reimbursements is earmarked for public infrastructure, particularly because constructing a new parking ramp is expensive. However, the detailed list of eligible expenses to be reimbursed to the developer that is part of the TIF plan clearly includes expenses for the privately-owned parts of the project.

Asked to explain the discrepancy between his representations of the TIF plan and the BRA-approved TIF plan, Bell wrote to ELi, as noted above, “Let me please be very clear, I am making no representations that should be mistaken as facts.” He added, “As you know, any and all details on the proposed Center City District Project are 100% subject to city council approval.”

Bell suggested we check with the City’s Planning department to get an answer to our question about the discrepancy. ELi has an inquiry into the City which has not yet been answered. [See update at end of article.]

Bell also said that the development agreement, the draft of which has still not been provided to the public, would answer our question. But a development agreement does not establish the terms of the TIF deal; a TIF plan does.

Additionally, it seems unlikely the development agreement will answer our question to Bell about why his personal representations do not match what the TIF plan shows.

ELi has previously reported on Bell’s misrepresentations to East Lansing’s Planning Commission with regard to companies that have endorsed his project.

Yesterday (June 12), the City made available a memo dated June 6 suggesting key issues being negotiated in the forthcoming draft development agreement. That memo now suggests the City will obtain $200,000 per year in rent from the developer for private development on public land (Parking Lot #1). This annual rental payment is for both new retail space along Albert Avenue and senior rental housing above the parking ramp which, together, are expected to gross about $2.4 million in annual rent payments to the developer.

The City’s June 6 memo suggests the City will obtain about $422,000 in “total new annual revenue” from the project, including the $200,000 ground-lease rent. In his “share-points” memo, Bell called this expected additional income for the City “Huge!”

City Council is set to take up the project for a possible decision next Tuesday, June 20. The City has made available on its project-dedicated website a series of new renderings, which were also presented by the developer yesterday at the Hannah Community Center.

The current renderings show the two major buildings only at night. Asked yesterday at Hannah Community Center whether the developer would be providing daylight renderings of the updated building designs, Bell told us “no.”

There is no updated staff report on the site plan, so it is difficult to ascertain the current details of the site plan at this time.

Update, June 14, 8:45 a.m.: City staff has now responded to our inquiry with this reply: "The Development Agreement is being drafted to limit reimbursement to only cover costs of public improvements.” No draft of the development agreement has yet been provided. The short response from staff, quoted in full here and sent at 10 p.m. yesterday, does not explain what counts as "public improvements," so we do not know whether this means the agreement is being drafted such that the TIF would be used to cover the cost, for example, of the retail space to be owned by the developer but physically integrated into the public parking structure. At this time, the City website on the project still has only the June 6 memo on the development agreement which refers to the BRA-passed TIF plan, not a new plan. The City has also not yet provided an updated staff report on the revised site plan coming to public hearing next Tuesday, June 20. ELi will continue to work to obtain details about this proposal.

Update, June 16, 10:30 a.m. As we show in a new report on the draft development agreement released on the afternoon of June 14, at this time it does not appear that the TIF reimbursement will (or even can) be strictly limited to the costs of public infrastructure. Read on.

 

Check out ELi’s comprehensive guide to the Center City District redevelopment proposal, along with our special webpage tracking our team’s ongoing, in-depth reporting. And if you want to know what’s going on with the separate Park District redevelopment, check out our special webpage tracking that project.