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Columbus-based developer Frank Kass, 75, flew to Lansing Monday to present an agreement to the City Council reached by developers and the city to purchase and develop the former Red Cedar Golf Course into a $242 million mixeduse development. City Pulse caught up with Kass at the offices of his local partner in the venture, Joel Ferguson. The below Q&A is a composite of Monday’s visit and an exclusive press briefing with city leaders and developers last week, with Kass participating via telephone.
You’ve stuck with this project for five years. What’s kept you on the hook?
I met Joel [Ferguson] and Christopher [Stralkowski, executive project manager of Ferguson Development] five and a half years ago and enjoy the relationship. I have a lot of fun with them.
I don’t think that in those five years, there’s very many days we haven’t talked, mostly about bullshit. I’ve stayed at their house. They’ve stayed at my house. Chris writes my dogs letters. He’s a sick person.
I love what I do. I don’t think I’ve worked a day in my life. Loving what I do has more to do with who I’m involved with than where I am.
Secondly, it was the challenge of this particular project. Not many projects, ever, have been built on an integrated parking structure, or IPS. It involves the drain commissioner, the Department of Environmental Quality, so many things we hadn’t done before. We’ve worked on a floodplain before, but usually, you just fill it.
How does that work?
On a 10-year floodplain, like you just had last week, the parking will be OK. On a 25- or a 50-year, there will have to be an evacuation on the parking, but never on the buildings. We’ve learned so much working on this project. The negative is that we’re out of pocket $2.5 million, and you know how much of that is transferable to another project somewhere? Zero. In bacon and eggs, the chicken is involved and the pig is committed! I’m not in the business of losing all that money when there is a real good project that can be out there.
Considering the topographical problems you’re dealing with, why is it so crucial to build here?
If this gets done the way we want it, this becomes the epicenter of your universe here. You’re surrounded by the university to the south and the east; the Capitol and the hospital aren’t far away. You’ve done some stuff on the riverfront — and I’ve talked with the mayor many times, and you’re going to do a lot more on the riverfront in the next three or four years.
This piece of land is bringing zero dollars to the city now, and when it’s done, it will set the standard for what people can do. Think about Michigan Avenue if Sparrow Hospital hadn’t stayed and expanded like they’re doing. What would you have, of any stature, between the state capitol and MSU? The first time I came here, what you had was about nine marijuana dispensaries. With Sparrow, with this, and what they’re going to do on the river, you’re setting the standard for better development.
Columbus is often cited as a comparable campus-to-Capitol corridor. Is the comparison apt?
In Columbus today, we have an area called the Short North, the two miles that connect campus to downtown. It’s 100 percent filled up. It’s the single reason Columbus is growing like a weed, because the young people covet it, and so do people my age. It has every good restaurant, galleries, hotels. We started that 25 years ago. We took a three-anda-half acre blighted parking lot and put up the coolest project there. The convention center got built, High Street was widened to 200 feet and we built something called ‘the cap’ on top of High Street. We understand this kind of stuff.
What has been the most difficult part of the project so far?
The hard thing has been the challenge of figuring out how to finance almost $80 million worth of infrastructure [mostly to build the integrated parking structures]. If the land were a flat table, we’d be having this meeting inside the hotel, because it would be done by now. All the developers are forking out $17-18 million toward this $79 million. In addition to that, we’re doing a $43 million Brownfield Tax Increment Financing bond. [The bond captures increases in tax dollars resulting from development to reimburse the developers for environmental cleanup and other eligible costs.] Of that $43 million, the developer is guaranteeing $33 million. So the city’s entire stake in what will be over $250 million when it’s done is $10 million — not bad leverage for the city.
Red Cedar Renaissance includes 1,248 beds of student housing. MSU is in crisis mode over the Larry Nassar sexual assault scandal and the university’s reputation has taken a big hit worldwide. Does this give you pause?
This crisis will dissipate. We’re not in this for the short term. We’re not going to have anything open for another two years and this will have all sorted itself out long before then.
People draw parallels between this and the crisis at Penn State, and Penn State seems to have recovered fully from whatever they went through at that time.
We’re not putting our anchor into Lansing and/or MSU proximity for the short term. We believe in the city of Lansing, we believe in MSU, we believe in the people we’re working with.
The hotel operator, the senior living operator, nobody seems to have walked away, and neither has the lender.
How does Ingham County Drain Commissioner Pat Lindemann’s Montgomery Drain project fit into the picture?
It’s paramount to the success of our project. Had the drain commissioner not been involved in this from the beginning, and had the capacity to manage the water situation you have here, and help us with our infrastructure, and clean the river — I’d have no interest at all in spending all this money to look at a polluted river. When you look at what he’s proposing to do here now, with a clean fishing river, with bike paths and all the beautiful water streams running down to it, and what he’s going to do with Michigan Avenue’s boulevard, with public art and landscaping — it’s a wonderland.
Lindemann warned that frogs will wake up the people in your hotels.
That’s fine with me. I live in the coolest condominium of all time, a little one I built right in my home town, and I get woken up three times a week by Rumpke Waste Management.