MONDAY, April 13 — The Lansing City Council will decide later this month whether a downsized version of the Red Cedar project can continue along Michigan Avenue.
At tonight’s virtual City Council meeting, developers laid out their 11th iteration of redevelopment plans at the former Red Cedar Golf Course after the Michigan Economic Development Corp. rejected tax incentives for the $262-million superdevelopment last month. That’s a reduction of nearly $13 million.
“We’re not the only company that can get it done. We’re the only company that is doing it,” explained Frank Kass, a Columbus, Ohio developer partnering on the project with Joel Ferguson, of Lansing. “We’ve already spent $20 million. If you would like to stop this project, you would be creating a real problem not just for us, the developers, but also for the city.”
Developers threatened to halt the project after the Michigan Strategic Fund board rejected a tax increment financing package last month to help support construction on the site. Kass said his team went back to the drawing board and are confident their revised plan will be approved.
Among the only changes:
A plan to expand student housing during a second construction phase has been eliminated, edging down the number of student housing beds from “at least 1,100” to 792. That space, instead, will become a parking lot as developers also nix a $15 million parking structure.
Because the site sits nearly seven feet below the floodplain, developers initially thought parking would be needed to serve as the foundation of each of the buildings. Kass said contractors have since realized they could simply build their hotels and apartments on elevated piles of dirt.
“And nobody was crazy about too many student housing beds anyway,” Kass added.
Christopher Stralkowski, project manager for Continental Ferguson LLC, said last month that construction will continue with a “private investment” of nearly $275 million, but has previously declined to say whether that would include bankrolling the project with tax dollars.
Tonight, Kass said the development would ring in at about $262 million, about $13 million lower, after spending an additional $2 million to “move around some dirt” because of the construction changes. But aside from trimming a parking garage and a few hundred student housing beds, the project is largely staying the same and still is a “gamechanger” for Greater Lansing, he said.
No other changes are expected either with the project itself or its application for Brownfield tax incentives that will allow developers to be reimbursed with years of new property taxes on the site, Kass confirmed. He said he also expects the MEDC to approve their second application.
The Lansing Brownfield Redevelopment Authority is expected to vote on the revised plans later this month. Council President Peter Spadafore said City Council will also be tasked with approving — or possibly rejecting — the revised development agreement on April 22 or May 4.
If it’s rejected, city officials said that developers would be stuck with the prior version of a development plan that included additional student housing and a ground-level parking deck. If it’s approved, the revised project can continue forward under the Council’s renewed blessing.
Mayor Andy Schor is comfortable with the changes, he said, noting that he was also pleased to see the recent reduction in student housing. Reduced costs are always a good thing too, he said.
Regardless, construction there — or anywhere else in the state — has been halted until at least April 30 under Whitmer’s recent “Stay Home, Stay Safe” executive order that mandates nonessential employees work from home. That list doesn’t include commercial contractors.
Continental-Ferguson LLC broke ground on the project last October after the Lansing City Council approved plans to get the redevelopment started last April. Officials said developers made the decision to start building before they secured funding entirely at their own risk.
Kass said at least $20 million had been invested in the property to date, warning City Council that any attempts to derail the project at this juncture would be a “really, really big mistake.”
Still, First Ward Councilman Brandon Betz questioned the necessity of tax incentives and, like the MEDC, the project’s overall economic impact on the region once it's actually completed.
He also questioned why Kass and his development team should receive another endorsement from the city after he labeled Lansing as a “podunk” city in an interview with City Pulse.
Kass, in defending criticism of the project last year, said a project like this in Ohio would have been welcomed with a sizable tax abatement and larger benefits, but because of the close proximity to MSU, it was still worth his time to pursue plans in a “podunk” city like Lansing.
He later tried to walk that comment off the record, apologizing again tonight for losing his temper during that interview and inadvertently making disparaging remarks about the city.
“Nobody else really wanted to do this project,” Kass added. “We are developing this project. There is nobody else. There aren’t any other uses. We know what we’re doing and we are the right people to do this. More importantly, we’re the ones actually doing it. We’re there now.”
Plans still call for the vacant parcel to be transformed into market-rate and student housing, two hotels, a senior care facility, and various retail and restaurant space. While prior plans included an amphitheater on the site, Kass didn’t mention the addition in tonight’s overview.
Stralkowski didn’t immediately respond to questions about the proposed changes.
In 2018, Spadafore was the only member of the City Council to vote against the project in a 7-1 vote. And while he might not be thrilled with the outcome, he doesn’t plan to throw up roadblocks this time around, he said.
“I’ve said this before. It’s done,” Spadafore said last week. “Council has already approved the Brownfield and the development agreement. This is a revision, so obviously it’ll be weighed on its merits, but it’s not a big restructuring of the financials. Construction has already started.”
Visit lansingcitypulse.com for previous and continued coverage as the plans push forward.