March 12 2009 12:00 AM

In a loss for Old Town and landlord Joel Ferguson, the Greater Lansing Visitors and Convention Center will move to the Stadium District in downtown Lansing by this fall, a coup for developer Pat Gillespie.

The good news is the bureau is staying in Lansing. The question, though, that Ferguson poses is whether the cost of the move is justified.

The bureau is a major tenant in the Grand Center building, 1223 Turner St., owned by Ferguson, an MSU trustee and Democratic Party powerhouse. Ferguson’s company, Ferguson Development, is building the new state police headquarters on Grand Avenue downtown.

The bureau’s lease, which is for 8,654 square feet, is set to expire Nov. 30. The bureau plans to move in the summer but pay rent through November. The bureau is paying just over $700,000 over a fiveyear lease.

Bureau President Lee Hladki confirmed the move to Gillespies Stadium District development on Michigan Avenue between Cedar and Larch streets, across from Lugnuts Stadium. The Lansing Regional Chamber of Commerce and Fifth Third Bank are among the tenants in a building that also house condominiums and apartments.

Hladki declined to say how much rent the bureau will pay to Gillespie. Gillespie also declined, but he said the bureau’s space will be about 7,600 square feet.

Hladki said the move was part of the groups "overall strategy to be closer to the downtown and tourism destinations," including the nearby Lansing Center, which hosts conventions and conferences secured by the bureau.

Theres likely to be some blowback, Hladki acknowledged. But, he noted, "Weve given 12 months’ notice." (Technically it was closer to 11 months, since notice was given Jan. 6).He also said the bureau plans to speak with its stakeholders and partners to find a tenant for its old location.

Ferguson declined comment for this story.

In a letter to the bureau and provided to City Pulse, Ferguson lays out all the reasons the group should stay in its Old Town location. The first is cost, and his estimates peg the total increased cost to the bureau over five years — the term of the lease with the Gillespie Group — at just over $786,000. That figure includes an estimated moving cost of $50,000 and a "build-out" cost of approximately $346,000. The build-out costs are incurred by the bureau because the space theyll occupy isnt finished; rather, it will be finished to suit its needs prior to the move-in date.

Asked to comment on Ferguson’s numbers, Hladki said, "Those are his figures. We choose not to get into a fight with Mr. Ferguson about our business plan."

The issue isnt just the cost incurred by the bureau. After all, if a company moves to newer, more expensive digs, thats its choice. Hladki says thats a price the bureau is willing to pay to be close to two big draws — the Lansing Center and Lugnuts Stadium — with a streetlevel storefront and a visitors center. The Old Town offices are on the second story and do not include a visitors center. The bureau had operated a visitors center on the first floor, but it was shut down several years ago. The bureau sublets the space.

The problem is the anticipated ripple effect on Old Town, where the bureau is viewed as an anchor.

Ferguson, whose own office is also in the Grand Center, began investing in Old Town in the 1990s at the invitation of then-Mayor Dave Hollister. He notes, in the letter, that the initial commitment of the visitors bureau to place its offices in Old Town spurred other developments and revitalizations in which Ferguson Development has been involved, including partnering with the city to obtain a state grant allowing for improvements to the River Walk.

But with the ever-tightening credit market, developers across town are finding willing investors in short supply. Even the Stadium District condominiums have been slow to sell, with advertisements for a "rent-to-own" program springing up.

Whether an all-out turf war develops remains to be seen, but the initial occurrence isnt encouraging to First Ward Councilman Eric Hewitt. "Stadium District was supposed to bring out-ofstate and out-of-city companies (into the development), not relocate them from other neighborhoods," he said.

Hladki says thats not what happened at all; rather, the decision to move was the end result of what he called a "long and careful planning process." The bureau was not courted by Gillespie or encouraged to leave Old Town. "It was a mutual coming together," Hladki added.

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