Downtown businesses fight City Hall over EL housing plan

Last spring, Al Bay and other East Lansing business owners were hit with some startling news.

At a Downtown Development Authority meeting on May 25, the city revealed a proposal to create a five-story, 122-unit, 29,969-square-foot affordable housing development on Albert Street between Bailey and Division streets on the site of a surface-level parking lot.

“Within a few days of that, we saw the soil samples being taken,” said Bay, owner of the Wild Goose Inn, which is next to the lot. “We were immediately concerned because we, the business owners, depend on that parking.”

To fight the plan, Bay and other nearby business owners formed Citizens to Protect East Lansing Access. In June, they collected over 900 signatures against the development.

The City Council is set to vote on the matter as soon as Tuesday (Oct. 17).

“We didn’t find out about this for a year and a half,” Bay said. “It’s a matter of transparency and good governance in general. Something has to change in the way that things are being run here.”

The city owns 29% of the lot. For over two decades, it has leased the remaining 71% from the Metzger/Fabian family for public parking.

In 2022, city officials expressed their desire to the family that the lot be developed. The family was told it would not be offered another long-term lease. A short-term lease was created at significantly reduced revenues and was restructured with the family now responsible for property tax payments.

“I mean, that’s basically the city saying: ‘We want you to put something on this land,’” said Mark Meadows, a former East Lansing mayor and state representative who’s running again for City Council. “And so, in defense of the family, they did what the city basically told them to do.”

In response, the family hired CBRE, a national commercial real estate brokerage firm, to seek development proposals. Of the interested groups, they went with American Community Developers, which submitted a plan calling for two years of development.

The city is steadfast in assuring that a parking study, done this summer, shows that Bailey Street parking ramp to the east and the Divison Street ramp to the west have more than enough space to accommodate cars that have been parking at the Albert Street lot.

“Had they made us aware that they wanted to close the lot, perhaps we would have gotten together and tried to buy it,” Bay said. “There’s a provision in the city comprehensive plan that forbids private parking enterprises in the downtown area — but that could be changed, too.”

The outcry came to a head at the Oct. 3 City Council meeting, where a public hearing on the matter brought out about 20 speakers. In anticipation of that heavy turnout, and because Councilmember Dana Watson was absent, Mayor Ron Bacon delayed the Council’s vote on the matter until at least next week.

Only two speakers supported the plan.

“Having more housing options that are close to downtown is going to be good, particularly if you just think about the expenses of owning a car,” said MSU Professor Josh Berman.  “Insurance is expensive.”

Roy Saper, longtime owner of a nearby art gallery and framing shop, said, “The city has studied housing for 30 years. Before you is the one project that fits precisely what you have pronounced as a need: affordable housing for working people.”

“A more populated downtown becomes a more vibrant downtown,” Saper added. “Businesses can stay open for longer hours, vacant spaces become more desirable, and create  even more business — particularly those that are unique and locally owned.”

The rest of the speakers were opposed.

“I’ve been going to the Peanut Barrel since 1984,” said Sally Potter, referring to the restaurant with a back entrance that faces the parking lot. “Rodeo burger, medium well, cheese on rye, and fries. Sometimes a basket."

“Has anybody done a customer count of people coming out of their cars to go to the Peanut Barrel? No. We’re talking about something that no one’s done the numbers on,” said Potter, the manager of the Eastside Lansing Food Co-op.

Potter listed a handful of other businesses in the area, including Sushi Ya, Yoga State, Skin Studio 211, Splash of Color Tattoo Studio that she said will suffer greatly from the loss of the lot.

“The margins are too thin and the customers are too important. And you are taking away the most valuable resource they have: parking,” she added, citing her experience as a shop owner for 15 years.

Dave Bernath, owner of Flat, Black & Circular, 541 E. Grand River Ave., said he wishes the Council would delay the development until after the Nov. 7 election, when three new members will be elected to the five-member Council.

“I’ve been here the longest of anyone on this block,” Bernath said. We’ve seen a lot of places come and go over the years. When we started, there weren’t as many people or businesses. By the time we got the parking lot, it was a godsend.”

Now, with the potential loss of the lot, Bernath is afraid that the business turnover may soon escalate.

He thinks he’s got a feel for the city’s motivations.

“For the city, it’s gonna be taxes they’re going to make. I understand the money position,” he said. “It’s just that the small businesses are gonna hurt. What’s more important: the city’s budget, or the small businesses on the 500 block?”

Business owners are hoping for a solution that would preserve parking or create spaces nearby. None have an issue with affordable housing, but the general takeaway has been that it is a good project in a poor location.

If the Council goes through with the plan, the Citizens to Protect East Lansing Access is prepared to initiate a citizens’ referendum, according to the group’s lawyer, Jeffrey Hank.

Erik Altmann, a former City Council member running again in November, has another possible solution in mind.

“There is a way forward, which is to use eminent domain to force a sale of the property to the city," Altmann said. Under eminent domain, government can take private property and turn it into public use. In Michigan, it is a complex legal process that is usually used for the construction of roads, bridges, drain and public utilities, according to the Foster, Swift law firm.

“Eminent domain sometimes makes people uncomfortable, but I think this is an appropriate use case,” Altmann said. “We can probably fund the purchase with a revenue bond. So you’ll be getting revenue from the parking lot paying off the purchase price over the years and the owners of the property would be appropriately compensated for it. So, we’re not taking anything from anybody.”

Whatever happens, Bay said he feels that the city could have done better to accommodate local business owners.

“Here I am as a customer, I’ve spent nearly $200,000 purchasing parking and they don’t even let me know, if they knew for a couple of years and just kept it secret,” Bay said. “It just gives you insight as to the mindset that they have.”

— TYLER SCHNEIDER