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State rejects Red Cedar proposal, jeopardizing funding

Ferguson: ‘We’re still going to be a gamechanger’ 

Posted

FRIDAY, Feb. 7 — Plans to redevelop the former Red Cedar Golf Course may have hit a financial roadblock after the Michigan Economic Development Corp.  turned down funding for the project in its current form.  

After a long and careful review, we have determined this project in its current scope does not meet our core strategic priorities — such as greater access to affordable or low-income housing, revitalizing or stimulating development in core downtown areas, or the creation of a long-term, net economic benefit —  for the limited state economic development resources available,” MEDC spokesman Otie McKinley said this afternoon. 

McKinley also said the Lansing Economic Area Partnership has since requested to withdraw a tax-increment financing work plan for the property. Lansing Mayor Andy Schor said MEDC officials have also asked developers to resubmit a revised plan. LEAP CEO Bob Trezise was not available to comment further. 

The development team at Continental-Ferguson LLC — spearheaded by developers Joel Ferguson, of Lansing, and Frank Kass, of Columbus, Ohio — broke ground on the $250 million super-development last October after the Lansing City Council approved a development plan and tax incentives to get the project started. 

Plans called for the vacant parcel to be transformed into market-rate and student housing, a hotel, a senior care facility, an amphitheater and various retail and restaurant space. Developers said the project would create about 400 full-time jobs by the time it opened in 2023. But state officials don’t appear supportive of the plans. 

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. McKinley wasn’t immediately available to elaborate further about the MEDC’s recent review of the project. 

“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.” 

The project calls for about $196 million in private investment alongside a 30-year Brownfield plan that would cover about $54 million in infrastructure and soil cleanup from years of chemical treatment at the former golf course. Bonds backed by the developers were set to be repaid through eventual property taxes on the site. 

But if the MEDC doesn’t approve that funding plan, developers will likely either be forced to float the bill themselves, downsize or alter the scope of the project or pull the plug on the redevelopment altogether. It’s still unclear what the MEDC’s recent feedback means for the project, but Ferguson refused to recognize a problem. 

“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.” 

Schor said it appears there’s still “more work to be done” between the developers and MEDC before the state portion of the tax incentives can ultimately be approved. Spadafore also suggested that any altered development plans could trigger another review at the city before the project could continue to move forward.  

“Those are all questions that need to be answered as we figure this out,” Spadafore added. 

As the now-settled development agreement shifted in 2018, at least half of the City Council had leaned against the project, criticizing the spread of student housing and the layout of its 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 previously, 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.” 

Visit lansingcitypulse.com for continued coverage as more details about the project become available.  

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