Developers to revise plans for Red Cedar development  

Schor: New plan backs away from student housing tax incentives 

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WEDNESDAY, Feb. 12 — Developers of the former Red Cedar Golf Course are pushing forward with construction plans after the Michigan Economic Development Corp. objected to a request to help fund the $250 million superdevelopment. 

Lansing Mayor Andy Schor said the development team at Continental-Ferguson LLC — spearheaded by developers Joel Ferguson of Lansing and Frank Kass of Columbus, Ohio — will resubmit plans for tax incentives this week so as to “minimize” any reliance on state taxes that directly support student housing. 

Developers were sent back to the drawing board last week after the MEDC determined the project, in its current form, had failed to meet the state’s “core strategic priorities,” such as greater access to affordable housing, revitalized development in core downtown areas and the creation of a long-term, net economic benefit for the capital city. 

An MEDC spokesman said the initial plan — which called for about $196 million in private investment alongside a 30-year tax-increment financing plan to cover about $54 million in infrastructure improvements — simply didn’t warrant assistance from the state given the limited availability of state developmental resources. 

While there is no promise that the revised plan will be approved next month, Schor remains optimistic. 

“I thought it was a good plan,” Schor told the City Council Monday. “There were issues raised by MEDC, as they do with a lot of different proposals. The staff raised a variety of objections to the plan. It was withdrawn, will be changed and resubmitted. It’s fairly common. It just happened closer to the end than we had expected.” 

MEDC officials declined to provide a copy of the initial proposal or elaborate on their recent objections. Schor also declined to provide a copy of the revised plan or elaborate much about what will be changed. A request for both proposals through Michigan’s Freedom of Information Act has not yet been returned to City Pulse. 

The City Council approved a development plan and tax incentives for the project in 2018. Plans call for the vacant lot to be transformed into market-rate and student housing, a hotel, a senior care facility, an amphitheater and various retail and restaurant space to create about 400 full-time jobs by the time it opens in 2023. 

But like the friction the plans previously faced at the City Council dais, state officials aren’t too supportive of the plans either. Although the MEDC board hasn’t made any formal determinations, its recent statement was a sure indication that officials would reject the funding proposal at its next meeting without significant changes. 

And without support from the MEDC, millions of dollars that could have been captured as part of a tax-increment financing plan to construct the project might no longer be available for developers to spend — likely forcing developers to float the bill themselves, downsize the project or pull the plug on the plan altogether. 

Ferguson, however, refused to recognize any problems as construction continues along Michigan Avenue. 

“I think we solved it. I think we’re good to go. We’re finding common ground. We’re all on the same page,” Ferguson said, declining to elaborate on his dealings with the MEDC. “Downsize? Hell no. We’re still going to be a gamechanger. We’re good to go. Everyone will be happy. The mayor will be happy. Lansing will be happy.” 

Neither Ferguson or project manager Christopher Stralkowski has returned subsequent calls for comment. 

Schor said it appeared “more work” needed to be done before the state could OK the project — including reducing the interest rate from 6.5% to 5% on bonds set to be repaid through eventual property taxes on the site. Developers will also reduce the amount of taxes that will reimburse construction on student housing, he said. 

Alterations to the development plans will not require additional approval from City Council, Schor noted. 

“We’re still waiting to see what all of this means, but as I’ve pointed out, one of our biggest fears was that we’d end up with a partially constructed building on former parkland,” said City Council President Peter Spadafore. “This just raises more questions about whether this is an appropriate use of tax-increment financing.” 

As the now-settled development agreement shifted over several months last year, at least half of the City Council had leaned against the project, criticizing the spread of student housing and the layout of the apartment units. Others fumed over what they claimed to be an unnecessary use of eventual tax dollars to support construction. 

But developers quelled concerns, in part, by promising that some units would not be marketed toward students. Spadafore still objected to the proposal and its financing plan, but the Council approved the project, 7-1. 

“I have a philosophical objection to using a brownfield tax capture on green space,” Spadafore said at the time, noting the project was generally underwhelming. “There are real examples of brownfields throughout our city that need this type of incentive to encourage growth in the core of Lansing. This is not one of them.” 

Spadafore — without many other options — has since voiced cautious optimism for the project, noting its success is indivisible from the city’s success. Lansing is counting on this project coming to fruition, he noted. 

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