Feb. 20 2013 12:00 AM

Why is a development project near the Stadium District held up in Mayor Bernero's office?


Lansing developer Pat Gillespie is interested in transforming a prominent eyesore across the street from his Stadium District in downtown Lansing, but a key step in the process has been held up in Mayor Virg Bernero’s office for over two months.

The Ingham County Land Bank board approved an “option to purchase agreement” with Gillespie Development LLC in August for the property at 600 E. Michigan Ave., the southeast corner of Michigan and Larch Street. It was appraised for $60,000. The Land Bank obtained the property in July 2011 through tax foreclosure. 

The proposed development envisions a three- to four-story mixed-use building with retail or commercial space on the first floor and rental apartments above. Gillespie is working with Studio Intrigue Architects on the project.

But before it can move forward, the property needs to be rezoned from light industrial to a business district, which requires City Council approval. The Planning Board, based on a recommendation from the city’s Planning Department, approved the rezoning on Dec. 4. Typically, the Mayor’s Office then sends it to the Council for approval. But the Council hasn’t received it. Why?

Jason Kildea, director of commercial real estate for the Gillespie Group, planned on the rezoning being approved by mid January. “Here we are in late February and it hasn’t even got to Council yet,” he said, adding that he’s not sure why it hasn’t moved forward.

City Councilman Brian Jeffries, who chairs the Development and Planning Committee, is unaware of any development plans for the site. “Sometimes after the administration gets it from the Planning Board, there’s some delay for whatever reason,” Jeffries said.

Randy Hannan, Bernero’s chief of staff, said in an email Tuesday: “We are doing routine due diligence on the proposal and should have a decision soon.”

Ingham Co. Land Bank Chairman Eric Schertzing speculated that the delay may stem from lingering bad feelings toward Gillespie from Council members who lost a battle over project labor agreements in 2010 for Gillespie’s Market Place project downtown. That may be why the Mayor’s Office is hesitant to send it on to Council, he said.

“Whether they have some problem with me or the land bank or Council, I don’t know,” Schertzing said of the administration. “It feels like it’s been in the Mayor’s Office longer than it might have to be. What the reasons are, I don’t know.”

He added that the land bank spent less than $10,000 in fixing up the property, including demolishing the former gas station there. The property still needs environmental remediation work. “We made the site look ripe for redevelopment,” he said.

Schertzing said the land bank considered issuing a public Request for Proposals to redevelop the site, but Gillespie “came along.” Land bank board minutes reflect that Gillespie might deal with the limited parking on the site by building a lot on which he has an option across Larch Street behind the Stadium District.

Schertzing also said that the land bank is interested in rezoning the property “no matter who the developer is,” because the parcel ultimately should be used for some type of mixed-use development compatible with its surroundings.

John Ruge, chairman of the citizen-advisory Planning Board, said he didn’t “recall any controversy” about the rezoning. “It seemed pretty straightforward to us. Seems like a great idea and a good place for that.”

A Planning Department staff report states the obvious: “In general, the site is a blight on an otherwise vibrant commercial area and key intersection along the E. Michigan corridor.” It also notes that the properties on the north side of Michigan Avenue have already been rezoned from light industrial to business. The proposed development is in sync with what the city’s Master Plan calls for on the property.

“The proposed mixed-use development will not only be compatible with the surrounding land uses and zoning patterns but will be a vast improvement over the existing development of the subject property,” the staff report says.