Schor, scorned developer at odds over city hall plans

The city of Lansing’s journey to a new city hall has hit at least another speed bump.

Grand Rapids developer Granger Group has charged that the Schor administration is acting illegally in refusing to reconsider its proposal to build a new city hall on the site of the old Walter Neller Building at the corner of Grand Avenue and Allegan Street in downtown Lansing, which Granger owns. The city placed the building on the make-safe-or-demolish list in October after years of trying to get Granger to repair it.

Granger lost out to Boji Group when Lansing Mayor Andy Schor picked the Boji Group’s plan to turn the old Masonic Temple, 217 S. Capitol Ave., into the new city hall with a $40 million state grant that Boji won for the city after Schor ask both developers to come up with creative financing.

Schor responded strongly to Granger Group’s allegation that the city was acting illegally.

“Mayor Schor acknowledges the interest of this Grand Rapids developer wanting to do work in the City of Lansing now that we have $40 million from the state” for a new city hall, according to a statement issued Tuesday by city spokesperson Scott Bean.

“The fact remains that his one property downtown is a neglected, crumbling eye-sore that the City has ordered to be demolished because it is literally falling apart and is dangerous. This is next to a parking lot that was supposed to be redeveloped decades ago,” the statement continued.

“His newest proposal would delay a new city hall, put the state dollars at risk, and lose the proposed hotel development for the current city hall. The time to offer a serious response to the RFP was 2 years ago, and no addendum was offered until the state gave the City $40 million. Mr. Granger doesn’t get to come in now at the last minute and try to kill a fully baked plan by proposing a plan that won’t work, just because he wants $35 million and wants the city to knock down his dilapidated property,” Schor’s statement said.

“We had hoped to work with him here in Lansing, and this is very disappointing. We wish him well on his future endeavors.”

At the center of Granger’s complaint against the city is its claim that the administration asked only the Boji Group to revise its bid to reduce the size of the project after voters approved a bond issue that includes funds to build a public safety building. Police and the courts will be housed there instead of city hall, as they are now, dramatically reducing space needs in a new facility.

“Granger did not have the opportunity to provide alternatives to meet the City’s needs” with a revised bid, Gary Granger, president and CEO of Group Group, a Wyoming, Michigan, development company, wrote Schor in a letter dated yesterday. “While it is clear that Boji was provided single-sourced opportunity to work with the City directly and allowed the chance to modify their proposal to the RFP, Granger was not afforded the same options.”

“The Boji proposal was chosen because it was 1-out of-1 proposals provided the opportunity to work with the City, which is not within Lansing Law,” Granger wrote.

That contradicts what Schor said Tuesday and Bean told City Pulse Monday: Both Boji Group and Granger Group were asked to revise their bids after voters approved the $175 million public safety bond issue in the November 2022 general election. Bean said that Boji responded, but Granger did not.

The Granger letter also calls for a new round of requests for proposals for a new city hall as a result of the $40 million state grant the city has accepted for the project.

“Per Lansing Law, this should back into an RFP process to ensure that the City is receiving the best possible outcome, regardless of the pre-selected recipient, which is line with both local and state law,” Granger wrote.

Granger also claims that the Boji Group plan would cost $53 million, $13 million more than the state grant.

Granger’s letter follows a written exchange between him and Schor in which Granger asked for reconsideration of Granger Group’s plan and Schor’s rejection.

Two weeks ago, the City Council approved accepting the $40 million state grant. However, last week, on a 4-4 vote, the Council turned down Schor’s request for $3.65 million to purchase the Masonic Temple building from Boji Group, the next step toward converting it into City Hall. The Council members who voted against it said they wanted more time to consider the plan. The Schor has to wait 30 days before it can seek approval again.

Meanwhile, Granger’s son, Jason, addressed the Council during public comment last week in an effort to gain support for the Granger Group plan.

In an email to questions this morning, Jason Granger said, “This is not true,” when asked if Bean was correct in saying the city had asked Granger Group to revise its bid after the city downsized its space needs.

Asked about how the Granger Group arrived at $53 million as the cost of the Boji Group plan, Granger said in his email response, “Ancillary information that we cannot confirm because it has been in a closed-door process that is not available to the public or RFP respondents.”

Asked how Granger Group arrived at $40 million as the cost of its own revised plan, Granger emailed: “Inflation adjustment to our original budget, which takes into consideration our proposed land gift reduction, removal of finance/interest costs, and estimated for a variable change adjustment to the City’s space plans, which have not been provided to us, but apparently has been provided to Boji only.”

Reached yesterday on whether he intended to sue the city, Granger replied, “We have not taken it to Council yet.” He confirmed he meant the City Council, not legal counsel, although he did not rule out legal action. He indicated the next step in his strategy was to persuade the Council to consider his plan.

Meanwhile, a source told City Pulse that Schor did not plan to reply directly to Granger’s letter with the accusation of illegality.

“The mayor is still pretty mad that they are playing a game and lying to try and disrupt the process and sabotage the RFP process. It’s the last communication he will have directly with them.”

— BERL SCHWARTZ