Sept. 13 2018 09:57 AM

How a developer assembled the pieces



Developer Pat Gillespie knows it’ll take some work to shape up his latest plans along Michigan Avenue.

It already has. Blueprints for the first downtown hotel to be constructed in decades — along with dozens of apartments and a grocery store to anchor the project — will require an investment he estimated will tally up to $40 million. The project required his company to purchase nearly an entire city block before the plans could even be announced.

“It occurred over a four-year period and involved communicating and having discussions with people in the area to see if they had an interest and if they wanted to be a part of the project,” Gillespie said. “It was basically conversational: ‘Is now a good time? Not today? Call back in a couple months?’ It was a dialogue.”

City records indicate began in 2014 when he acquired the corner lot — a former Mobil gas station at the intersection of Michigan Avenue and Larch Street — for $60,000 from the Ingham Co. Land Bank. But the project didn’t gain steam until this year, when Gillespie turned his focus south to Barnard Street and made his way down the block.

“I don’t think there were any hard negotiations,” Gillespie added. “It was just: ‘Here’s what we want to do. Would you be interested in participating? I wouldn’t call any of that a hard conversation with anyone.”

James Brogan, who owned the now-shuttered Brogan’s Tire and Auto Service, jumpstarted Gillespie’s plans in May when he offloaded most of the remaining 600 block of Michigan Avenue for $600,000, according to city records. By then, only Ed Carpenter, the owner of Liskey’s Auto & Truck Service, 119 S. Larch, was standing in the way.

Carpenter ultimately decided to keep hold of his automotive business. But in mid-August he unloaded a series of commercial and residential properties along Barnard and Larch streets to the Gillespie Group to make the project possible. City records indicate Carpenter was paid about $500,000 through seven separate sales.

“I would say that a lot of this was his idea,” Gillespie said. He told Capenter, “I’d like to build a 24-unit apartment. He said this property is prime and we’d be wasting a corner if that was all we did there. He was willing to work with us and sell some of the land. He talked about moving. He talked about staying.”

Carpenter and Brogan didn’t return calls for this story, but their property sales were confirmed both by Gillespie and records filed at the City Assessor’s Office. All told, the Gillespie Group paid about $1.9 milion for 18 separate parcels, including foreclosed properties.

Gillespie aims to transform the 4-acre space into a four-story hotel with a restaurant and an undetermined mix of one- and two-bedroom apartments. Below them will be a comparatively smaller, “urban market” version of Meijer, billed under the name “Capital City Market.” The brand behind the hotel has not yet been announced.

Bob Trezise Jr., president and CEO of the Lansing Economic Area Partnership, suggested Gillespie would need to pursue a “very significant” amount of Brownfield funding to clean up the contaminated site following years of automotive-related spills and repair work. Gillespie said multiple underground tanks still need to be excavated.

A “significant” loan and grant request from the Michigan Department of Environmental Quality and the Michigan Economic Development Corp. will ultimately help float some of the cost, Trezise added. Gillespie declined to provide specific financial estimates for those portions as the plans continue to take shape.

“There’s probably a lot of soil that will need to be removed where anything has leaked,” Gillespie added. “Most of the buildings also have lead-based paint and asbestos that will need to be removed in a manner that’s safe for the environment. We need that toolbox to clean up up the site. Obviously, we can’t do anything until then.”

Amenities like a cafe and a bar area — in addition to spaces for conference rooms — are set to be included in the hotel. Gillespie said about 300 parking spaces behind the building will accommodate both tenants and shoppers. But work will be worth rewards, according to Gillespie, who bills the project as a downtown “game-changer.”

“I would love to see more people coming downtown on business trips,” Gillespie added. “And they usually bring disposable income that would support more retail and support different venues in the area. The hotel is not the main force of business there. We’re optimistic about that, but this started with a grocery store and apartments.”

Visit lansingcitypulse.com for continued coverage as development continues along Michigan Avenue.