Where's the Market Place?

Fall 2009, by some of the earliest estimates, was when construction was supposed to begin on the $23 million Market Place phase following the opening of the new City Market. In fact, construction crews were to be working within 15 months after the completion of City Market, states the development agreement between the city and the developer.

Gillespie said recently that construction will begin in early 2012, eight months after what was stipulated in the development agreement. The 3.64 acres are being surveyed and construction contracts need to be finalized, Gillespie said.

But Gillespie is quick to say that at no point was the project stalled, delayed or otherwise put on hold. Nothing was supposed to happen until the City Council approved a brownfield development plan, he said.

“You can’t use words like ‘stalled,’ ‘delayed,’ ‘on hold’ because you can’t do ‘c’ before ‘b,’” Gillespie said.

Gillespie said “I don’t recall” there being the 15-month construction requirement after City Market was done. He said the plan has been to start building Market Place in early 2012 “for the last two years.”

Gillespie doesn’t have to worry about the city taking any legal action for not complying with the development agreement.

“We remain in productive conversations with Mr. Gillespie about completing this second half of the Market Place development and do not anticipate any need for formal legal action at this time,” Bob Trezise, president and CEO of the Lansing Economic Development Corp., said in an e-mail.

Local experts say it’s typical to miss development timelines.

Eric Rosekrans, senior vice president of CB Richard Ellis in East Lansing, said economic uncertainty has led to “flexibility” between developers and municipalities. Construction delays beyond what’s stipulated in the agreement are typical, he said.

“There has to be flexibility. Chances are if one guy with a reasonable track record can’t do it, the next guy can’t,” Rosekrans said. “It’s very challenging in today’s world to hold someone’s feet to the fire given the economic uncertainty we’re in.”

Lori Mullins, community and economic development administrator for East Lansing, agrees. Typically, it’s better for municipalities to maintain a good relationship with the developer, she said.

“In general, the municipality would try to be forward thinking and consider how the project or timeline can change and still benefit the community,” she said.

So why even attach timelines to projects? What’s the point?

“It lays out what the expectations are for both parties,” Mullins said. “That construction timeline is put together in good faith, but it’s impossible to predict (if it will be met), especially with the economy in the last few years.”

Rosekrans, who also sits on the board of the East Lansing Downtown Development Authority, said similar construction delays are going on with City Center II along Grand River Avenue in East Lansing. Mullins said that development agreement has expired, though the city and the developer, Strathmore Development, still have a site plan in place.

As of this month, Market Place still calls for four buildings, including two along the river. Gillespie said a residential structure immediately north of City Market next to the river will go up first. That should take between nine months and a year to build. The building to the north of that will be “flexible” he said: “Office or retail or entertainment or housing.” The two buildings along Cedar Street were “always planned for mostly commercial,” Gillespie said.

While the residential units will attract leasers, Gillespie needs interested buyers for the commercial space before construction happens on those. He said four companies — “all confidential” — have shown interest about the space, but two of the deals were unsuccessful. “Two more are still out there who haven’t given us an answer,” he said.

Gillespie said the two buildings along the river will be four to six stories, while the Cedar Street structures will “probably be two to three stories.”

But any plans after the first building are tentative. “We’ll do one residential and then go from there. We want to make sure we hit the market. If we miss it a little bit, we can modify the second building. If we hit it perfect, we’ll start with the second plan,” Gillespie said.

Gillespie said the City Council threw a four-to-five-month kink into the timeline as it debated a brownfield incentive package. Last October, the Council voted 4-4 against granting a 24-year brownfield plan for the property. The primary reason Council members Eric Hewitt Brian Jeffries, Derrick Quinney and Carol Wood voted no was Gillespie had not yet negotiated construction contracts with local labor unions, specifically what wages would be. 

Within two weeks, Ingham County Circuit Judge Rosemarie Aquilina overturned the Council’s decision on grounds that Council couldn’t block a private project that didn’t have a project labor agreement in place.

Gillespie and the unions haven’t talked since the Council vote, Gillespie said.

“We’re going to try and utilize as much local (labor) as we can, a combination of union and non-union,” he said.

Glen Freeman III, president of the Greater Lansing Labor Council, said the delays and the lack of conversation is “not really a surprise,” though he believes Gillespie will involve local labor groups on Market Place construction. “I honestly believe he’s got a big enough project he cannot not go to responsible contractors.”

On a recent Monday, Nate Wood, a surveyor with the Haslett-based KEBS, Inc., was standing behind a tripod on the east side of Cedar Street just north of Cooley Law School Stadium. It was day four of Wood’s work to survey the topographical features of Market Place’s 3.64 acres. Construction can’t start before Wood’s task is complete.

“(The maps) will give them elevations on everything and help them determine what they need to rip out and leave,” Wood said, pointing to what’s now a large cemented lot with a patch of overgrown weeds.