For the moment, announcements are pretty exciting. Just check out the message boards at www.develop.metrolansing.com for all the development ogling you can handle. But sometimes those trial balloon development announcements can get held hostage by demand or a bad economy.
Over the past few years there have been a lot of exciting press conferences. For a time, toward the end of 2007 and well into 2008, it seemed like a new economy of residential and office construction was being created in Lansing with new developments being announced practically every month.
There was Market Place and the razing of the Lansing City Market. There were questions on how high into the sky the plans for the grand Capitol Club Tower would reach. There was the prospect of Lansing’s being home to a real Hollywood movie studio And, the environmentally minded urbanites wondered, how many solar panels could Gene Townsend fit on the top of his Lansing (nee Kalamazoo) Gateway project?
Well, it’s been a tough year. Since last October, the economy has put many of these planned developments into a holding pattern. One local developer said that he heard a story about a group of bankers sitting around wondering, “If we were going to give a loan to a business, what kind of business would it be?” The answer: not the kind of business that seeks to construct new residential living.
For sure, Lansing has seen its share of developments come and go and rise and succumb to economic conditions. Back in the early 1990s — the pre-David Hollister days — the Birmingham-based Jonna development company wanted to build row houses at the corner of Capitol Avenue and Shiawassee Street; it never materialized, and the land is now a city parking lot overlaid with a neighborhood enterprise zone.
Then there’s East Village, a much-touted Hollister administration housing development that sprouted up on the former Boys Training School property along Saginaw Street. Burton Katzman, the developers of East Village, have put up 10 of the vacant homes for auction. Steve Bentley, Burton Katzman’s chief financial officer, said that the company has reached an agreement with financiers to “short sell” the homes through June on an online auction site. The financiers had been reluctant to use this method, Bentley said, but have loos ened recently. The company is still trying to decide what to do with the vacant land at East Village.
“We were selling OK there for a while,” Bentley said. “But the market is not what it once was.”
Of eight big and flashy developments during the Bernero administration that have been announced over the last few years, only one — the redevelopment of the Ottawa Street Power Station into the headquarters for the Accident Fund — has broken ground. (The Stadium District, Pat Gillespie’s office and residential complex, which opened in spring 2008, was announced before Bernero became mayor in 2006.) For the rest, project start dates have come and gone. But, in the name of Lansing progress — specifically, progress in the downtown area — we bring you an update of all those big ideas.
Status: On hold
March, the East Lansing-based Lawton Group made the front page when it
announced that it would turn the former YMCA building at 301 W. Lenawee
St. into a $60 million, 180,000 square-foot, 12 story office building.
from the mock-up picture of The Lenawee — online, the photo is
animated, showing us what it looks like during the day, and at night
when a dramatic line of lights extends from the entrance straight up to
the top of the building — would have added a big piece of muscle to
But, the project was announced at a time when the
economy was spiraling downward.
now, as with most development in Michigan, it has come to a grinding
halt,” Dan Essa, one of the owners of the Lawton Group says of the
project. “It’s on hold until the economy improves.”
that the project is not dead. His company owns the property where The
Lenawee would go and right now there is a need for a large anchor
tenant before financing could be achieved. Potential tenants
interested in the property, he said, “fell apart” over the last year.
Eric Rosenkrans, senior vice president at CBRE Lansing, the real estate
company representing Lawton, said that the timing of the announcement
wasn’t premature, but typical.
“That’s the typical development
way: you come up with an idea and tell people, ‘Here’s what people
thought of,’” he said. “And you see what the market brings out in going
after potential suitors.”
Capitol Club Tower
Status: On hold until demand is met
the most dramatic downtown development announcement of the last two
years was the Capitol Club Tower, a high rise of such luxurious
proportions that it was once projected to climb 20 stories. The Tower
would rise from the footprint of two vacant buildings along Grand
Avenue and would provide upscale tenants with riverfront living and
sweeping views of the Lansing area.
Local developers Shawn Elliott and
Alan Drouare initially projected the $20 million project would break
ground in late 2007 or February 2008. Several pieces have fallen into
place since then, but ground hasnt been broken and won’t be until the
developers can turn some of the “50-60” souls that have put deposits on
units into full buyers. That might convince banks to provide financing for the actual building. The
tower has also shrunk to 12 floors and will have a total of 84 units.
“The things that happen in the national economy affect things locally,”
Drouare said. “We’ve put the project in a holding pattern, but we’re
still pressing forward.”
The project has been approved for an
.80-acre renaissance zone — a zone free of local and state taxes — that
went into effect at the beginning of 2009. The developers also
purchased the South Grand parking ramp just north of Capitol Club Tower
site and recently pulled permits to start renovating the ramp to match
the design of their building. Drouare said that so far $250,000 has
been invested into the ramp for various infrastructure upgrades and
that the financing for further renovations is in place.
upside of waiting to build the tower, Drouare said, is that the thing
will take more than a year to build. By that time, he hopes the economy
will be more solid. In the mean time, the developers are still
accepting reservations on the remaining units.
other things on their mind right now,” Drouare said. “It’s not the time
to say, ‘How about reserving a luxury condominium?’ The time has to be
right. We’re waiting for the right time to bring the message out.”
Ball Park North
Status: Might start by late 2009, early 2010
Gillespie’s $25 million Ball Park North would put four buildings
ranging in height from two to six floors north of Oldsmobile Park, two
of which would overlook the ballpark.
Gillespie is optimistic
about this project, saying that one company doesn’t want to have to
wait until mid-2010 to move in and that other tenants that have
expressed interest. He’s projecting a “want to start sooner than later”
start date of late 2009 or early 2010.
However, Gillespie still has to
prepare the site for the project. He already owns the land, which is
bordered by Cedar, Shiawassee and Larch streets to the north of the
ballpark. He has to do environmental clean-up on the site, and would
still have to buy one more parcel, a city of Lansingowned garage along
Cedar Street. Judging from last year’s controversial sale of the
Lansing City Market to Gillespie, buying city land has been a challenge
“We could start before the users come through,” Gillespie
said. “We could start commercial buildings before residential there.”
City Center Studios
Status: Looking for a tenant
development, which Mayor Virg Bernero said “could put Lansing, Mich.,
in the center of the national film industry,” would build a movie
studio on that chunk of land north of Shiawassee Street between Cedar and Larch streets. A joint venture between Lansing’s Ahptic Film and Digital and the Gillespie Group, the $10 million project would build a 71,000 square-foot production space, including two 24,000-square-foot sound stages.
This project was announced shortly after the state created the most generous tax incentives for film and television production in the country. Gillespie and Ahptic wanted to take advantage of that chunk of land north of Shiawassee Street and bring a tenant to its studios. But, that tenant still remains to be found.
there’s a trick to that. Matt and , the Martyn, an executive producer
with - Ahptic, says that a tenant won’t come to the studios until it’s
built. So, the project needs to find an investor to build the studio
before a film company will locate there.
“We’ve met with all
the major film studios out west,” Martyn said. “But building and
financing a studio like that with this current market presents
It’s a chicken and egg problem: the studios want
the space ready for them to move into, but the investors want a studio
signed on and ready to go. On top of that, Martyn said, rumblings among
elected officials to cap the state tax incentives for productions does
not boost Hollywood’s confidence in making a permanent commitment to
“If we’re looking for a serious commitment, (the movie studios) want a serious commitment from the state,” he said.
Gillespie, president of the Gillespie Group, says that studios are out
looking for space, but for this project, it’s a matter of finding a
“With a one-movie commitment, it doesn’t
make sense to build a studio. We’re still working on it, but we have to
find an end user,” he said.
Status: On hold
called Kalamazoo Gateway, this is another project by Gene Townsend.
Plans for the — are you noticing a pattern — mixed-use building would
make it 60,000 square feet, with its main selling point an energy
efficient “green” design. The building would wrap slightly around the
corner of Cedar and Kalamazoo streets.
But this project isn’t happening any time soon.
neither an anchor tenant or the availability of financing,” Townsend
said. “It’s kind of a chicken and egg thing: without financing, there’s
no point to seeking an anchor tenant.”
But last year the
project did get off the ground. In order to build the Gateway, Townsend
would have need to buy city parking lot 49 and purchase the Yellow Cab
building just north of the parking lot. The purchase agreement for the
parking lot was written, state entitlements were “roughed out but not
submitted” and the availability of buying Yellow Cab is still on the
Townsend says that the hold of the project could be
traced back to February 2008 when commercial foreclosures started and
equity lenders began pulling back.
“The whole equity lending world shifted a little more than a year ago,”
Townsend said. “New construction wasn’t attractive. We had to look at
quality buildings that already existed and use the ones that we have
more efficiently. The economy needs to reach a point, and then we can
contemplate new commercial buildings. The emphasis now is on renovating
existing ones. In my mind, that’s not a bad thing.”
Status: On hold pending more interest
project goes back a long way. When Virg Bernero was still a state
senator he passed legislation to get the property known then as Ottawa
Block conveyed to the city of Lansing. At the beginning of 2008, the
state did as such and a few seconds later the city sold the 5.8-acre
parcel to developer Gene Townsend for $460,000 for a mixeduse develo p
m e n t that would include 52 condominiums.
project , which has since been officially named Sobi Square — see if
you can guess what thatstands for — includes a zonechange for a
mixed-use building at the corner of Ottawa Street and Butler Boulevard
(which Townsend personally shopped around to neighborhood groups). But,
the project is “waiting for the economy,” Townsend says. “
project is complete in its entitlements, site plan approval, zoning and
the site work has been bid,” he said. “We’re at the point where we’d
seek reservations. But we’re not going to spend marketing dollars on
that until it seems like a more likely prospect.”
bottom line is that the financing is not there. Townsend says he’s put
in applications for new market tax credits, which would guarantee
lenders at least a 40 percent return, but even that is not enough. Add
to that state workers who were a target market for the development, and
the uncertainty of the future of those jobs given a state deficit,only
hurts the project.
But, generating interest in the project is
needed to push it along. Five “good leads” on a 12-unit building,
Townsend said, could provide enough incentive to do further marketing
and develop more potential buyers.
“If people are interested, they need to tell us,” he said.
Status: Waiting for new City Market to be builtUnlike
most of the developments that are waiting on the economy, Pat
Gillespie’s Market Place mixed-used condominium complex is waiting on
something slightly more unpredictable: local government.
you may remember, last summer Gillespie bought the Lansing City Market
from the city to use the land to build Market Place. The city will use
the sale money to build a new market. But! The Lansing City Market will
not be torn down for Market Place until the new City Market is built.
estimates that the site will be ready for construction around January
2010 — a three-month delay from original plans. Right now, the Lansing
Entertainment and Public Facilities Authority is accepting bids to
build the new City Market, and it still says groundbreaking will happen
in the next few weeks.
Market Place would be two to four
floors with a commercial tenant. Gillespie says that the residential
parts of the development would be built first.
“The timing is
questionable but we do think, start to finish, that everything will
come along,” Gillespie said. “Right now, we feel pretty good about the
plans we thought about and presented. Hopefully they’ll come to
Due to an error, an earlier version of this story misspelled Ahptic Film and Digital. We regret the error.