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Home News  Sam Eyde: Absentee developer
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Wednesday, July 22,2009

Sam Eyde: Absentee developer

Ten years later, the Seven Block Renaissance Neighborhood is much improved — but four acres in the heart of it remain vacant.

by Neal McNamara
At Jr. Boulevard in Lansing, in the the intersection of Kalamazoo Street and Martin Luther King northwestern corner of a large, vacant lot of grass, stands a metaphor.

It is, literally, a sign, almost completely faded by the sun, with the phrases “coming soon” and “professional office building” still visible. At one time, even as recently as last year, you could actually make out the sign from the road and get the impression that someone was about to start construction on an office building.

But, the sign is just a reminder of false starts and a neighborhood that was revitalized only halfway.


The sign, and the roughly four-acre lot behind it, belong to local developer extraordinaire, Sam X. Eyde. According to Eyde’s Web site, he holds over 1 million square feet of office space including Constitution Hall, home to the state Department of Agriculture and the Department of Environmental Quality; 735 Michigan Ave., home to the Michigan State Housing Development Authority; 400 S. Pine St., home to the Secretary of State; and a smattering of land around Oldsmobile Stadium and the intersection of Waverly Road and Lansing Road, among other properties in East Lansing, Grand Rapids, Florida and Arizona. He developed a piece of land just north of the Frandor plaza that includes everything from Flapjack’s to Hollywood Video. Eyde is just one in a family of developers and landowners that hold such properties as the Knapp’s building in downtown Lansing (brother George), Eastwood Towne Center (brother Michael) and a smattering of apartment and housing developments. Looking at their holdings, it seems the family owns much of Mid-Michigan.


Eyde bought the Seven Block property in 1999 from the city of Lansing. At that time, the lot was a prime piece of real estate smack in the middle of a tax-free renaissance zone. To the south, across Kalamazoo, was a neighborhood that had once been one of the most notoriously dangerous spots in Lansing. But it was coming back, thanks to the special tax zone and the efforts of area nonprofits and urban pioneers who wanted to live near downtown Lansing.

But, that was 10 years ago. The renaissance zone has since expired and many of those urban pioneers that settled in the Renaissance Neighborhood have moved on. The neighborhood isn’t bad anymore, but the prairie on its northern edge has stunted its growth.

According to a development agreement between the city and Eyde’s company, Seven Block Area Development LC, signed on May 11, 1999, by then Mayor David Hollister, Eyde would build two office buildings on the site, the first of which would be 40,000 square feet and would include proper utility work and landscaping.

Between the signing of that agreement and now, negotiations went back and forth between Eyde, the city and the Seven Block District Citizens’ Council. The neighborhood and the city wanted a mixed-use development that would benefit the neighborhood, not just another office building. It appears, though, that through all the negotiation, the only thing Eyde wanted was another office building.




Neighborhood struggle


To describe Eyde’s land as a “wasteland” is a bit of a stretch. It is a wasteland in that it’s a vacant piece of land smack in the middle of a sea of houses and state office buildings. But if one didn’t know any better, it might appear to be a park.


Most of the property is grass, which, it seems, is diligently mowed. On the northeastern edge of the property is a derelict construction trailer, bordered up and gray. On either side of the property is a sharp spine covered in grass. On its northern edge is a cracked stretch of pavement that was formerly Washtenaw Street. There are tufts of trees — some dead — in spots, and in one wooded area a mass grave of “Hugh Clarke for Judge” campaign signs from last summer’s election.

The property doesn’t necessarily look bad, but it certainly feels bad, like a graveyard full of failure.


South of the lot across Kalamazoo, Maryfrancis Dvorak’s well-appointed house — built new by the Greater Lansing Housing Coalition during revitalization of the neighborhood in the early part of the decade — has a great view of Eyde’s property. She’s been living in the house since 2002, and remembers well the clash between the neighborhood, the city and Eyde over what to do with the property.


“I was told by a city worker that it would be done in 2021,” she said, seeming almost astonished at such a prospect. “Whoever has the most money wins.”


She feels that there could have been a building on the site by now, but the city didn’t want to step up to Eyde and risk an expensive court battle. However, that’s fine — she doesn’t want the city to spend tax dollars on a court case because she feels that Eyde would win anyway and build his office building, no matter the cost.


“I can understand where he’s at as a property owner,” she said. “Not that I support it, but you can see where he’s coming from.


“If Eyde feels it should be a state office building, maybe he’ll see that through — maybe that’s what he’s waiting for.”


Around the corner from Dvorak, along Butler, is Paul Tagger’s house. Tagger predates Dvorak by three years and is one of a handful of people who have stayed in the Seven Block area — by Tagger’s estimation — and had the opportunity to witness the scope of Eyde’s dealings in the neighborhood.

Before Tagger moved in, he said, the neighborhood was a place most people would avoid. Even he had doubts about moving in when he saw that there was a house up for sale on Butler.

When he first moved in, what is now Eyde’s property contained an “after hours club” and a small convenience store. The year that Tagger moved in, the two businesses were increasingly a problem. A petition was circulated around the neighborhood and the city eventually shut and tore down the businesses. After that, Eyde stepped in.


“We thought, ‘Great, here’s someone who can do something decent with the land,’” Tagger said.


But, as Tagger described it, Eyde’s purchasing of the land was just the beginning of five years of back and forth.

“Right after he bought it, he cleared the land. There were foundation holes dug and then he filled it back in,” Tagger said.


Eyde bought the property with the intention of building office space, according to the development agreement. At that time, Lansing was experiencing a glut of office space, according to published reports. The 110,00-square-foot Boji Tower was undergoing a renovation a half-mile away.


The first iteration of Eyde’s project, which was supposed to be completed by the end of 2001, would have a 90,000-square-foot office building and a 30,000-square-foot commercial building on the property. But facing a tough post-Sept. 11 economy and not much need for office space downtown, the City Council approved an extension of Eyde’s development agreement until 2004.


By the summer of 2003, Eyde had changed his plans. He wanted to increase the office building by 60,000 square feet and decrease the commercial building to 10,000 square feet. The Seven Block District Citizens’ Council, by that time, was growing weary of the false starts. The council, which under the renaissance zone had the power to advise the city in development
plans, wanted a mixeduse development on the lot. But, there seemed to
be a lack of hope even for that.


“Given current economic conditions,
there is no indication that the market for office space will improve
any time in the near future,” Ben Harman, the Seven Block council’s
chairman at the time, wrote to Mayor Tony Benavides in 2003.


Benavides
and his chief assistant, David Wiener, pushed Eyde to discuss building
a mixed-use development, using the request for an extension to 2006 as
leverage. In September of 2003, Eyde appeared to be opening, telling
Wiener that if the city could “make a good case” for mixed-use
development, he would consider it.


James Ruff, the former head of the
Planning and Neighborhood Development Department during the Benavides
years, said that for a long time, the city was trying to find a grocery
store to put on the parcel. But no one bit.


“We couldn’t get any
retailers or grocery stores to get in there,” he said.


The city and
neighbors had always wanted mixed use on the land, but Eyde wouldn’t
budge on his office plans.


“But of course, Sam was always in the market to get a state office in
there,” Ruff said. “That didn’t come very easily; it wasn’t really
viable.”

Ron Whitmore, a founder of the Seven Block council
who lived in the Renaissance Neighborhood between 1998 and 2007, but
has since moved to Hawaii, thinks that Eyde never intended to build
anything but an office building for the state. In 2004, Eyde was
granted his extension on the development until 2006. However, the
extension remains in place today with no expiration date.


“As a
resident — and I believe most residents in the Renaissance, Westside
and Genesee neighborhoods agreed — I thought the best use would be a
mix of housing and commercial neighborhood services,” Whitmore wrote in
an e-mail. “(Eyde) got hundreds of petition signatures supporting that
position, and several other developers confirmed that there was a good
market for that sort of development. Eyde seemed to be the only person
who thought the only market for that property was office. I suspect he
wanted another sweetheart deal with the state, but once there was a
Democratic governor in office that seemed unlikely, so I suspect he’s
just biding his time.”



Staring contest


The city of Lansing, however, appears to have an ace up its sleeve.

About
a year after Eyde bought the parcel in 2000, the city acquired two
chunks of land on the northwest corner of Kalamazoo and Butler — if you
drive by it, you can tell the difference between the city property and
the Eyde property by the length of the grass; the city keeps its grass
shorter. In 2004, the City Council passed a resolution rezoning the
parcel from professional office to a mixed-use district and then put it
up for sale. The resolution specifically states that Eyde would need
the property to complete his vision for a development, but the City
Council would have final say over who gets to buy the land.


The
intention of the resolution, it would seem, would be to force Eyde to
buy a piece of land not zoned for office if he wants to build the
150,000 square feet of office space he had envisioned. Eyde has not yet
made a move to purchase the differently zoned land.


Lansing City
Attorney Brig Smith, who now oversees the almost decade-old development
agreement between Eyde and the city, said the parcel gives the city
leverage.

“The city controls a portion of that property,” he said. “That portion would be necessary to create a … grander development.”

However,
neither the city nor Eyde has made a move on the property. Smith said
that the original development agreement still stands and that Eyde and
the city have an ongoing agreement that no lawsuits will be filed.

The original development agreement, however,
is a problem. Smith called the agreement an “earlier iteration of the
matrix,” which means that the development agreement isn’t as strong or
specific as, say, the development agreement with Pat Gillespie (Eyde’s
son-inlaw) over the Marketplace development.

The agreement’s
weakness is the obligation for what Eyde has to build.


Bob Johnson,
director of the Planning and Neighborhood Development Department, said
that Eyde could erect a poll barn and essentially satisfy the
development agreement. Language in the development agreement says that
Eyde must only start construction, not necessarily erect a building.


“Eyde can pull a permit and begin construction and meet the development
agreement,” Johnson said. “There’s nothing that stipulates what he has
to build.”

Fourth Ward Councilman Tim Kaltenbach, whose ward
the parcel is in, said he was excited about seeing the land developed
when he was elected three and a half years ago. But now, it’s three and
a half years later and there’s been no movement on the property.
Kaltenbach says he has talked to Eyde and has gleaned that the
developer wants nothing but an office building and has never said why.


“Personally, I think what Sam had in the back of his mind that he’d
come in there, grab the land and put up another state office building,”
he said. “I’m disappointed that the city hasn’t been able to push
(Eyde) into doing something; it’s a terrific parcel of property.”

But
now, with the renaissance zone expired, developing the land might not
be as enticing, especially with the downturn in the economy. Back in
1997, the state identified 11 areas around the state for
revitalization. Seven Block — bordered by St. Joseph Highway, Butler,
Allegan Street and Martin Luther King Jr. — was one of those areas. After
Eyde bought the property, and the years wore on, taxes were gradually
increased until the end of 2008, when they were fully implemented.

Near
Christmas, Eyde made what seemed like a last-ditch effort to reinstate
the renaissance zone. Bob Trezise, CEO of the Lansing Economic
Development Corp., said Eyde called him to see if the zone could be
extended. Ultimately, it would be up to the state Economic Development
Corporation to extend the zone. “


We very much want it developed, but
the renaissance zone was already in place for a long time. That’s the
time you have to put together projects,” Trezise said. “The whole point
of a renaissance zone is that it’s short lived. They’re supposed to be
an accelerator and not a permanent fixture. This is not a criticism of
Sam Eyde. I don’t know why it didn’t click, but there’s just no way we
could extend it.”


Eyde is not inclined to explain his motives. Efforts to reach him and his son, Sam, for comment were unsuccessful.



No hope?


Back
at Paul Tagger’s house, his wife, Ivy, was fixing breakfast for their
children. The couple has been living in the house for a while and they
still hope that someday there will be something built on the parcel
that would benefit the neighborhood.

“I want the land to be
used for something,” Ivy Tagger said. “Something that would add to this
area. A Starbucks or a Biggby or something.”

Paul Tagger, too,
would like to see something for the neighborhood on the land. But he
doesn’t think Eyde has the motivation to build anything but a state
office building. Plus, most of the original members of the
Seven Block council are gone, and the group disbanded — by Paul
Tagger’s memory — sometime around 2006.The fight, he says, has died
down.


“The plan was a mix — local businesses on the bottom and
apartments on top,” Tagger said.


“Eyde had said that he was with that.
But I don’t think he ever was. His plans were nothing like that.”

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