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Wednesday, March 19,2014

Red Cedar growing

Red Cedar Renaissance project could surpass $200M, still no final sale price negotiated for former golf course land

by Andy Balaskovitz

This story was corrected on March 19. Because of a reporting error, the original story misstated the cost of redesigning the Montgomery Drain. Ingham Co. Drain Commissioner Pat Lindemann said it would be $8 million to $20 million. The cost that was stated, $50 million, was for public improvement needs, which includes the drain, cleaning contaminated soil and building new roads, among others.

The Red Cedar Renaissance project on Lansing’s East Side just keeps getting bigger and denser. Developers and economic development officials say it could surpass $200 million in private investment — $75 million more than what has been planned thus far.

“We couldn’t be more excited about what we hear as potential developments,” said Bob Trezise, president and CEO of the Lansing Economic Area Partnership. Building on the Red Cedar River floodplain is a contributing factor that will increase construction costs. The developers, Lansing-based Joel Ferguson and Columbus, Ohio-based Frank Kass, plan to build foundational plinths, which act as risers, throughout the site. However, it may also be a more dense development than originally planned.

“They’re going to have to build more density to make money on the project,” Trezise added. “It’s good news for all of us.”

And that $200 million figure only includes the private investment side of the project. Trezise said public infrastructure improvements could be in the $50 million range. Ingham County Drain Commissioner Pat Lindemann said redesigning the Montgomery Drain could cost between $8 million and $20 million. The rest of the public improvements include building roads, cleaning contaminated soil and removing a Board of Water and Light.

At a public meeting last week, Kass said it was now a $200 million project. Ferguson said Monday that the project is “expensive,” but he declined to give details about a final investment number.

“We’re going through a whole budget on our buildings. I don’t want it to be a moving target,” he said, though he confirmed that it has passed $125 million.

Kass and Ferguson are planning for a mixed-use redesign of the golf course that Mayor Virg Bernero closed in 2007 due to budget issues. The southern portion of the course will remain green space, according to design plans. The acreage along Michigan Avenue is planned to include market-rate housing for students and professionals, retail, a hotel and a medical office facility at the corner of Michigan Avenue and Clippert Street. Last week, the developers hosted the first of two public charrettes. The events allow residents to sketch out their ideas for the property. Those ideas are taken into consideration by the planning team.

According to a predevelopment agreement, the team of developers and public agencies set an April 30 deadline to reach a sale price and complete any necessary studies. That also includes any appraisals for the land, which is still being negotiated. Ferguson said the deadline can be amended.

While LEAP and the city had two parcels totaling 35.87 acres appraised a year ago for $10.8 million, Ferguson is ready to dispute that figure. Trezise is still going off the nearly $10.8 million figure, but he said the predevelopment agreement allows Ferguson to do his own appraisal.

“That’s not the number,” Ferguson said Monday. “I don’t want to argue. We had another appraisal done. We don’t need to negotiate a price (in public). We’re not going to go through this in the paper.”

Ferguson has always argued that the significant revenue for the city will come over time in new property and income taxes, not a one-time influx from the sale of the property.

“Appraisals are guides, not absolutes,” Trezise said, unable to give a likely sale price. “There is going to be a price for the property.” For example, the air rights that the city had appraised at Cooley Law School Stadium’s outfield is $500,000, though it plans to sell them to developer Pat Gillespie and Lugnuts owner Tom Dickson for $100,000.

Meanwhile, Lindemann’s portion of the project continues to move through necessary legislative approvals. The Lansing City Council’s Ways and Means Committee last week scheduled a March 24 hearing for the drain petition, which allows for public comment before he starts work redesigning it. Ultimately, Lindemann will bill most of the costs to the city and the county. The city can then decide how to pay for it, which could include money from the sale of the property or by assessing property owners in the Montgomery Drain.

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