Large Redevelopment Plan for Blighted Area in the Works

Thursday, August 25, 2016, 8:32 pm
By: 
Chris Root

Just after noon today, East Lansing’s Downtown Development Authority (DDA) heard the latest iteration of plans about both the shape and timing of the Park District from City staff and the developer. Plans are far from finalized—in fact, according to Planning Department staff, the drawings for part of the development that were briefly shown at the public meeting had already been withdrawn by the developer. But there were some clues about what might happen at this anchor location at the west end of downtown.

The redevelopment plan is expected to be substantial. The developer, DRW Holdings, LLC, is moving to submit a site plan for the entire area at the intersection of Grand River Avenue and Abbot Road and the two sides of Evergreen Avenue. It had previously planned to submit the development proposal in two phases.

The drawings discussed included a large building stretching along Grand River Avenue west from Abbot Road to Peoples Church’s property, with first-floor retail space, a 150-room hotel, 175 apartments, and one level of underground parking for use by hotel guests.

The draft site plan for this area included a relatively low building at the Grand River Avenue/Abbot Road corner fronted by a green courtyard, with the building reaching 12-stories in height at the point next to Peoples Church’s memorial garden. Concerns already have been raised about shadowing of People’s Church and its memorial garden.

On Evergreen Avenue just north of that site, the developer is suggesting an eight-story apartment building for senior residents (perhaps 55 and older). This would be next to Valley Court Park on the footprint of the former Evergreen Arms Apartments, which were demolished in July.

On the other side of Evergreen Avenue, where the DDA now owns a number of older rental houses, would be a parking garage. Placing a parking structure here is a plan of long-standing; the DDA purchased these properties about a decade ago for the redevelopment of the area.

The DDA took two actions at its meeting to enable plans for the Park District to move forward. First, it agreed to provide a letter authorizing DRW Holdings to include the DDA-owned properties on Evergreen Avenue in a site plan to be submitted for consideration by the City. A month ago, the DDA wrote a parallel letter allowing the developer to include the property at 303 Abbot Road in its site plan. (303 Abbot Road is the site of the former “small bank building” that was razed during the last month.) The letter regarding the Evergreen Avenue properties was needed so the two parts of the Park District could be presented and considered together.

Second, the DDA recommended that East Lansing’s City Council extend the deadline for DRW Holdings to demolish the major properties along Grand River Avenue. These buildings currently are scheduled to come down by the end of 2016. But the developer asked for demolition to be delayed in order to retain their eligibility for a Michigan Business Tax (MBT) credit.

In 2011, the Michigan Strategic Fund preapproved a $10 million MBT credit for a development at this location, and this would need to be amended for a new site plan. The state is no longer giving MBT credits, so the only possibility for obtaining this $10 million tax credit is amending the existing agreement, which requires that the project be completed by May 2021.

Approval of the MBT tax credit by the state is contingent on the East Lansing City Council approving a Brownfield plan which would give some tax benefit to the development. Eligibility for Brownfield Tax Increment Financing (TIF) on this site depends on a determination that a building here is “functionally obsolete.” Therefore, the developer wants to delaying demolition so the buildings will still be standing so they can be determined to be functionally obsolete for the purpose of obtaining a Brownfield TIF, in order to unlock the $10 million MBT tax credit.

At this early stage of the project proposal, neither the East Lansing Brownfield Development Authority nor the City Council has started to discuss what amount of TIF might be granted. Many types of costs are eligible, under state law, including infrastructure, demolition, public or private parking, and interest on loans.

The next step on the Park District development is submission of a revised traffic impact study of the entire project, which is due on September 6. City staff expect that a site plan will be available for consideration by the Planning Commission at its meeting on October 12.

 

For a follow-up to this story, click here.