Aug. 31 2011 12:00 AM

City announces plan to give Davenport University the Oliver Towers property in exchange for the college’s downtown campus. Towers would be demolished.


Another piece of the downtown Lansing puzzle may be falling into place.

As part of a draft development agreement
to be announced today by city officials, Davenport University would move
its Lansing campus to the Oliver Towers property at Capitol Avenue and
Shiawassee Street and the city would acquire Davenport’s property near
the corner of Kalamazoo and Cherry streets. The proposal calls for
tearing down the largely vacant Oliver Towers to make room for a new
Davenport campus.

The proposal is part of the city’s plan
to create a college district downtown by bringing LCC, Cooley Law School
and Davenport University into closer proximity. LCC is across the
street from the Oliver Towers property, while Cooley Law School occupies
buildings several blocks south.

The deal would mark the end of a
decade-long debate on what to do with the eight-story building that has
sat largely vacant since a fire in 2000. (See related story on P. 6.)

Davenport, a private nonprofit university
with 14 campuses and about 13,000 students throughout the state, plans
to demolish Oliver Towers to make room for a 60,000-square-foot facility
across the street from Lansing Community College’s campus. There also
would be room for 250 parking spaces, tentative plans say. The projected
completion date is August 2012.

The Oliver Towers block and Davenport’s current campus are both roughly three acres. No money is involved in the deal.

“We really are growing at this particular
location,” Davenport President Richard Pappas said Tuesday. “As we
started looking, instead of remodeling we needed a brand new and fresh
campus for new programs we’re considering. We saw a number of locations —
this particular location was exciting.”

Lansing Mayor Virg Bernero said Tuesday the deal is “serendipitous.”

“It’s a problem property for us on a
grossly underutilized block,” he said. “It’s a burned-out tower and a
surface lot — not the best use of land in the center of the city.”

Bob Trezise, president and CEO of the
Lansing Economic Development Corp., said the city envisions a college
district downtown. Davenport’s idea fit perfectly into that, he said,
thus the decision not to seek private, commercial development for the

“We think and agree with them (Davenport)
that the Oliver Towers site is a great location to build a sense of
place between students and our urban center and serves as a feeder
system in a college district,” Trezise said. “Consolidating universities
and colleges together in one area downtown … is something we’re very
excited about. We thought from an urban development standpoint, this was
the most perfect site for development.”

Bernero said seeking out a private
developer would have been a lengthy process. “We had to make a decision.
It was worth it to keep Davenport.” Bernero added the city would be
getting an “equitable return” for the property in Davenport’s campus at
Cherry and Kalamazoo streets.

Trezise said the city was “competing with
sites outside of Lansing” for Davenport’s presence. While the city has
known about Davenport’s exploration for a new site for “almost a year,”
Trezise said, the idea of using Oliver Towers surfaced about two months

Bob Johnson, Lansing’s director of
planning and neighborhood development, said it’s “high time something
positive happen on that property,” referring to Oliver Towers, which
sits across the street from his office on Capitol. For three reasons,
Johnson said this proposal is the best option: “The blight (of Oliver
Towers) is gone, we retain Davenport University” and the Housing
Commission “has new offices and a new environment.”

If the deal goes through, Davenport will
acquire the entire block downtown bounded by Seymour and Capitol avenues
and Ionia and Shiawassee streets — two parcels on three acres. The
eight-story building sits on the southern parcel and the city’s parking
lot No. 2 is on the northern parcel. Lansing Community College’s campus
begins just to the north across Shiawassee.

In exchange, the city will get about 2.7
acres on two parcels farther south downtown at the Kalamazoo and Cherry
streets intersection, across the street from the new Michigan State
Police headquarters. Those properties — at 202 E. Kalamazoo St. and 405
Cherry St. — contain Davenport’s one-story library and two-story
classroom and offices building. Property taxes are not being generated
from either of the sites.

Davenport’s current campus is about 500 feet west of the Grand River, adjacent to  Kalamazoo
Plaza, which leads into River Street Park. Davenport’s Kalamazoo Street
building shares a block with the city’s shuttered Center for the Arts
and the city-owned parking lot No. 1. The city has said it plans to tear
down the Center for the Arts building in order to create more surface

It’s uncertain what, if any, type of redevelopment will eventually happen there. 

Though the Lansing Housing Commission
occupies the first floor of Oliver Towers, Bernero said it’s not certain
the commission will move into what is not Davenport’s property.

“That’s all evolving,” Bernero said when
asked what would happen to the land the city would acquire. The Housing
Commission could move there or into some other city-owned property,
Bernero said, but he wouldn’t speculate where.

Trezise thinks the city would be well positioned by owning what is now Davenport’s campus.

“I think that area can be very valuable
for either city use or development purposes in the future,” Trezise
said. “That area could be very interesting in the future. It is very
wise for the city to tie up that property.”

However, the land swap deal is not
sealed. Before it can happen, it needs approval from the U.S. Department
of Housing and Urban Development, Davenport’s Board of Trustees, the
Lansing Housing Commission board and the Lansing City Council.

HUD needs to approve the deal because the
federal agency has a “deed of trust” on Oliver Towers, which means that
since HUD provided money to build the structure, HUD has a say in
approving its sale.

Even though HUD would need to sign off on
the development agreement, Lansing City Attorney Brig Smith said the
city owns Oliver Towers through the Housing Commission “in the same way
it owns BWL property through its Board of Water & Light.”

Smith said the draft agreement will need to be signed by the city, HUD and Davenport University. 

Michael Volk, Davenport’s chief financial
officer, said the college has been looking at remodeling or moving its
downtown campus “for a number of years.” Through market analyses, Volk
said it was evident “there is a great need in Lansing” for the programs
the school offers. “That solidified our decision that Lansing is a
market we need to invest in,” he said.

Volk said Davenport looked at “five, six
or seven properties” in and around downtown Lansing once it became
evident that building new was more attractive than remodeling its
current campus. Davenport has had a Lansing campus since 1979.

Nearly 900 students attend Davenport’s
Lansing campus and Pappas said that number is projected to reach 1,000
soon. Pappas also said that Davenport has an agreement with LCC “for
their students to come into our programs right after getting an
associate’s for a bachelor’s (at Davenport).” Pappas said Davenport also
is exploring a partnership with Cooley Law School.

“It would be a great marriage between the
three institutions being so close together,” Pappas said. “I think it
would benefit Lansing.”

Volk said the goal is to have the
development agreement approved by the city, HUD and Davenport in time
for construction to begin this winter. Ideally, the new facility would
be operational in a year, he said: “It’s aggressive, but we’ve had
really good experiences as we work through these situations.”

Johnson said one option for using
Davenport’s campus is to move the Lansing Housing Commission there, but
Johnson stressed it was merely an option. Johnson would not speculate on
what kind of future development could go on the property: "Right now
it’s about finding a home for the Housing Commission. The purpose is for
us to say, ’OK, at some point in the future maybe there is something we
could do with that property.’"

As for parking, Johnson said the city
would be "shifting parking" spaces, with the parking at Shiawassee and
Capitol going to Davenport and the parking at Davenport’s current campus
going to the city.

Otherwise, owning Davenport’s current
campus is also a placeholder for future development. "Parking sometimes
not only provides immediate (space) support, but it offers the
opportunity to say, ’Wouldn’t this be great for the private sector.’"

Johnson would not say how much either
property is worth. After the fire, the building was appraised at just
under $2 million, Johnson said. He said retaining Davenport and getting
rid of “blight” are more important than trying to sell Oliver Towers.

“An empty structure like that is probably
not the best situation,” Johnson said. “We’d love to have the space
occupied at this point.”