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Wednesday, August 24,2011

Where's the Market Place?

The city and the developer of Market Place intended for construction to have started by now. What happened?

by Andy Balaskovitz
It’s approaching four years since the city and developer
Pat Gillespie announced plans to transplant the Lansing City Market to
downtown just east of the Grand River, accompanied by a mostly
residential complex of structures called Market Place.

Fall 2009, by some of the earliest estimates, was when
construction was supposed to begin on the $23 million Market Place phase
following the opening of the new City Market. In fact, construction
crews were to be working within 15 months after the completion of City
Market, states the development agreement between the city and the
developer.


Gillespie said recently that construction will begin in
early 2012, eight months after what was stipulated in the development
agreement. The 3.64 acres are being surveyed and construction contracts
need to be finalized, Gillespie said.


But Gillespie is quick to say that at no point was the
project stalled, delayed or otherwise put on hold. Nothing was supposed
to happen until the City Council approved a brownfield development plan,
he said.


“You can’t use words like ‘stalled,’ ‘delayed,’ ‘on hold’ because you can’t do ‘c’ before ‘b,’” Gillespie said.


Gillespie said “I don’t recall” there being the 15-month
construction requirement after City Market was done. He said the plan
has been to start building Market Place in early 2012 “for the last two
years.”


Gillespie doesn’t have to worry about the city taking any legal action for not complying with the development agreement.


“We remain in productive conversations with Mr. Gillespie
about completing this second half of the Market Place development and do
not anticipate any need for formal legal action at this time,” Bob
Trezise, president and CEO of the Lansing Economic Development Corp.,
said in an e-mail.


Local experts say it’s typical to miss development timelines.


Eric Rosekrans, senior vice president of CB Richard Ellis in East Lansing, said economic uncertainty has led to “flexibility” between developers and municipalities. Construction delays beyond what’s stipulated in the agreement are typical, he said.


“There has to be flexibility. Chances are if one guy with a
reasonable track record can’t do it, the next guy can’t,” Rosekrans
said. “It’s very challenging in today’s world to hold someone’s feet to
the fire given the economic uncertainty we’re in.”


Lori Mullins, community and economic
development administrator for East Lansing, agrees. Typically, it’s
better for municipalities to maintain a good relationship with the
developer, she said.


“In general, the municipality would try to be forward
thinking and consider how the project or timeline can change and still
benefit the community,” she said.


So why even attach timelines to projects? What’s the point?


“It lays out what the expectations are for both parties,”
Mullins said. “That construction timeline is put together in good faith,
but it’s impossible to predict (if it will be met), especially with the
economy in the last few years.”


Rosekrans, who also sits on the board of the East Lansing
Downtown Development Authority, said similar construction delays are
going on with City Center II along Grand River Avenue in East Lansing.
Mullins said that development agreement has expired, though the city and
the developer, Strathmore Development, still have a site plan in place.


As of this month, Market Place still calls for four buildings, including two along the river. Gillespie said a residential structure immediately
north of City Market next to the river will go up first. That should
take between nine months and a year to build. The building to the north
of that will be “flexible” he said: “Office or retail or entertainment
or housing.” The two buildings along Cedar Street were “always planned
for mostly commercial,” Gillespie said.


While the residential units will attract
leasers, Gillespie needs interested buyers for the commercial space
before construction happens on those. He said four companies — “all
confidential” — have shown interest about the space, but two of the
deals were unsuccessful. “Two more are still out there who haven’t given
us an answer,” he said.


Gillespie said the two buildings along the river will be
four to six stories, while the Cedar Street structures will “probably be
two to three stories.”


But any plans after the first building are tentative.
“We’ll do one residential and then go from there. We want to make sure
we hit the market. If we miss it a little bit, we can modify the second
building. If we hit it perfect, we’ll start with the second plan,”
Gillespie said.


Gillespie said the City Council threw a four-to-five-month
kink into the timeline as it debated a brownfield incentive package.
Last October, the Council voted 4-4 against granting a 24-year brownfield plan for the property. The primary reason Council members Eric Hewitt Brian Jeffries, Derrick
Quinney and Carol Wood voted no was Gillespie had not yet negotiated
construction contracts with local labor unions, specifically what wages
would be. 


Within two weeks, Ingham County Circuit Judge Rosemarie
Aquilina overturned the Council’s decision on grounds that Council
couldn’t block a private project that didn’t have a project labor
agreement in place.


Gillespie and the unions haven’t talked since the Council vote, Gillespie said.


“We’re going to try and utilize as much local (labor) as we can, a combination of union and non-union,” he said.


Glen Freeman III, president of the
Greater Lansing Labor Council, said the delays and the lack of
conversation is “not really a surprise,” though he believes Gillespie
will involve local labor groups on Market Place construction. “I
honestly believe he’s got a big enough project he cannot not go to
responsible contractors.”


On a recent Monday, Nate Wood, a surveyor with the
Haslett-based KEBS, Inc., was standing behind a tripod on the east side
of Cedar Street just north of Cooley Law School Stadium. It was day four
of Wood’s work to survey the topographical features of Market Place’s
3.64 acres. Construction can’t start before Wood’s task is complete.


“(The maps) will give them elevations on everything and
help them determine what they need to rip out and leave,” Wood said,
pointing to what’s now a large cemented lot with a patch of overgrown
weeds.

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