(For an interview with Bob Johnson, director of the Lansing Planning and Neighborhood Development Department on this week’s “City Pulse on the Air” radio show, , click here or go www.lansingcitypulse.com.)
The Knapp’s building, Lansing’s most spectacular but conspicuously vacant downtown landmark, will be restored to its 1930s Art Deco glory for a new life as a high-end retail, office and residential complex, city officials and developers announced Tuesday.
Knapp’s Center owners George and Louis Eyde will move their East Lansing development company into the finished building, which will also house a small business incubator run by the Lansing Economic Development Co. Those two entities will occupy about 15 percent of the building’s 190,000 square feet, Bob Johnson, director of the Lansing Planning and Neighborhood Development Department, said.
“This is one for the history books,” Lansing Mayor Virg Bernero said. “I’m grateful that the Eydes had the vision and the commitment for it.”
The Eydes plan retail space on the first floor, office space for the middle three floors and 19 residential rental units on the fifth floor, with 40 spaces of underground parking.
A complex package of federal, state and local loans, grants and tax credits will finance the project, which is estimated to cost upwards of $20 million. Mark Clouse, spokesman for the Eydes, said the Eydes would put $9.2 million into the project, up front and through loan obligations. Work on the building is expected to begin in spring 2011, with doors opening in 2013.
“Next to the state Capitol and the Ottawa Power Station, the Knapp’s Center is probably the city’s most iconic, significant building,” Bernero said at Tuesday’s announcement.
The yellow and blue Streamline Moderne structure housed Lansing’s leading department store from 1937 until the store closed on an unlucky Oct. 13, 1980. It was used for office space until 2002.
Bernero said the project would return Knapp’s to its bygone status as a symbol of thriving downtown commerce.
The National Register of Historic Places lists Knapp’s as “a landmark in the progress of the modern movement in architecture in Michigan.”
Lis Knibbe, preservation expert for Ann Arbor’s Quinn Evans and head architect, sounded almost jealous.
“The coolest Art Deco building we have [in Ann Arbor] is the bus station,” Knibbe said. “We don’t have anything like the Knapp’s building.”
A bullet-sleek look, on a Queen Mary scale, is what makes Knapp’s unique. The building’s shiny skin is made of Maul Macotta, or concrete blocks faced with ceramic and metal. “Metal panel systems like the one used in Knapp’s can be seen in storefronts, gas stations and bus stations across the nation, but not in huge buildings like Knapp’s,” Knibbe said. “It’s very large for an Art Deco building.”
But Knapp’s has been idle, like a beached ocean liner, since state offices moved out in 2002.
In a phone interview Monday, an elated Bernero said the project is crucial to the city’s future “on so many levels.”
“There’s the sentimental longing to see it, the economic revitalization, and the boost to the spirit it will be for downtown,” he said. “This huge, hulking structure and beautiful Art Deco design will be preserved.”
The Knapp’s building is only a few blocks away from another crown jewel of downtown architecture, the1939 Ottawa Power Station, now undergoing its own epic $130 million redevelopment. The same architect, Orlie Munson, designed both buildings.
Several people involved in the Knapp’s deal said the Ottawa plant’s redevelopment into the world headquarters of the Accident Fund Insurance Co. was a catalyst.
Clouse said the Ottawa project set a precedent for using public-private partnerships to save an iconic downtown structure.
“It’s being done, and done well, and demonstrated that there are no buildings that can’t be saved,” Clouse said.
As makeovers go, the Knapp’s project is less drastic than Ottawa’s leap from power station to offices, but time was a complicating factor. Although Knapp’s is structurally sound, the clock is ticking on the building because of a fatal flaw in its multicolored skin.
Used in thousands of 1950s gas stations and diners, the Maul Macotta facing was cutting edge in 1937 — perhaps too cutting edge.
“They didn’t have all the kinks worked out of it,” Knibbe said. At Knapp’s, the joints between the metal panels were covered with a simple metal reglet, or molding, that let snow and rain get into the concrete behind the metal.
Later attempts to caulk up the joints made matters worse by trapping moisture inside the walls.
“There are places where it’s crumbling and places where it’s still fine,” Knibbe said. Clouse said part of one wall is so crumbly it had to be shored up.
The redevelopment will use a modern rain screen system that lets water circulate in and out of the wall. It’s not a matter of replacing a plate here and there. Knibbe called it “a substantial rebuild of the skin.”
The new facing will either be concrete or an insulation-backed metal panel. The design team may go back to ceramics or use automotive paints to re-create the building’s vivid colors.
The plan to restore the iconic skin was essential to securing $7.3 million in federal and state historic tax credits, and lays to rest longstanding fears that the Eydes would just give up and flay the building.
Eight years ago, Knibbe did a study of the Knapp’s building for the city and state historic preservation offices. “Back then, [the Eydes] weren’t ready,” she said. “Now they’re clearly ready. Seeing their change of attitude was clearly key.”
“I can’t put my finger on any one thing that made the change,” Clouse said Monday. “It was a combination of factors.”
Clouse said Eyde reps have talked with the city “for years” about redeveloping Knapp’s, but the scale of the 190,000-square-foot building made small tenants untenable. A major capital investment and overall concept, all or nothing, was the only way to go.
Over the past few years, Clouse got positive signals about the Knapp’s building from the state’s historic commission and Lansing’s EDC.
Johnson certainly had a soft spot for Knapp’s. “When I moved here from Massachusetts in 1974, I was buying popcorn, getting school clothes, riding the escalators,” Johnson said. “It was the coolest building.”
Karl Dorshimer, vice president of the Lansing EDC, said he spent many summer days looking at the gleaming Knapp’s façade while eating lunch on Washington Square.
“It just looms over downtown,” Dorshimer said. “I’d think, ‘Jeez, we gotta do something.’”
At Tuesday’s announcement, Dorshimer said he got in trouble for going up the down escalator and vice versa on his way to Knapp’s toy department.
Now he’s got a toy that takes up most of a city block. In winter 2009, after a year of dramatic progress on the Ottawa development, Johnson held a meeting in his office with Dorshimer, Nick Eyde and a financial consultant from California.
At the meeting, Nick Eyde floated the idea of getting a Section 108 loan from the federal department of Housing and Urban Development to push Knapp’s over the hump.
The Eydes would have to pay back the $5.4 million, but the loan would be secured by Lansing’s Community Development Block Grant funds.
As the others listened in, Johnson called Washington to ask if the project would qualify.
“They had some HUD official explain it to us,” Johnson said. “We talked about the location, job creation. All these things seemed to fall into place. It was sort of an ‘aha’ moment.”
Among other qualifications, Section 108 projects must have the potential to create jobs and revitalize crucial urban areas. The Knapp’s project, when finished, is expected to bring 200 to 300 new jobs to downtown Lansing.
“After we explained the Knapp’s Center to them, they said it was an ideal candidate,” Clouse said.
The $5.4 million Section 108 loan opened the door to a federal grant called BEDI, or Brownfields Economic Development Initiative (not to be confused with Brownfield Michigan Business Tax Credits). If the Section 108 loan meets final approval, the BEDI grant will toss another $2 million into the pot.
“They go hand in hand,” Clouse said.
Johnson said the $2 million BEDI will be put in reserve to help secure the Section 108 loan, lessening the risk to Lansing’s Community Development Block Grant.
The Knapp’s-sack of financial incentives also includes $7.3 million in state and federal historic tax credits, $4.8 million in federal “new market” tax credits, $1.8 million in Brownfield Michigan business tax credits, and a Renaissance Zone designation, under which state and local property taxes are waived for 12 years, then phased back in over the remaining three years.
Clouse said the federal and state credits can be sold to build up the capital needed to get the project underway.
Two tenants are already in place: the Eyde headquarters and a 10,000-square-foot small-business incubator run by the Lansing Economic Development Co., similar to the Technology and Innovation center in East Lansing.
Dorshimer said the incubator would take on businesses with a potential for growth, without regard to type. He said the space will lend itself to retail, high-tech startups and even galleries.
“It’s an ideal building,” he said. “It really inspires people.”
Johnson acknowledged that there is already vacant commercial space in downtown Lansing, but said the office space at Knapp’s would be “Class A” (state-of-the-art design, high-quality materials, prime location), and hence more in demand.
A spokesman for the project said the Eydes are talking to potential restaurant tenants.
“This space just screams ‘restaurant,’” Knibbe said at Tuesday’s announcement, gesturing toward the building’s airy northeast corner.
In contrast to the epidermal issues, Knibbe called the building’s interior “quite clean.”
“It’s a very good canvas for doing new things to,” Knibbe said.
Although layers of prismatic glass bricks funnel light into the building, much like lighthouse mirrors, Knibbe said the building is still “internally focused.”
To lighten and brighten the interior, the renovation will feature a four-story glass atrium from the second through the top floor, with a skylight.
Knibbe said the project will aim for a LEED (Leadership in Energy and Environmental Design) silver certification.
“It’s going to be an energy efficient, healthy building to work in,” Knibbe said. “It will be this state of the art office building within a historic envelope.”
At Tuesday’s announcement, Bernero praised the finance and design team.
“This could have gone otherwise,” he said. “We could have lost the building.”
“Economically, [demolition] was one of the options we looked at,” Clouse said. “But we all had an appreciation for the building, and the government has made it feasible for us to do this.”
Knibbe said the state and federal historic preservation tax credits did their job. “If you use those fundings, you have to go historic,” she said. “You can’t change the façade.”
Bernero said the Eydes’ decision to move its headquarters to the Knapp’s building was the turning point.
“When they are willing to move their family business back downtown, and make the investment work, that made me believe we were going to get this done,” he said.
Taking the longer view, Knibbe sees the Knapp’s project as another step in the ongoing reversal of automobile-focused urban growth patterns. “The younger generation is more interested in the diverse lifestyle you can have in an urban setting,” she said. “And the buildings are just sitting there waiting.”
At Tuesday’s press conference, Bernero said financial incentives only go so far. “Karl [Dorshimer] gave you the cold hard numbers,” he said. “But this is a labor of love and a leap of faith.”
For now, most of the building’s equity is wrapped up in beauty and nostalgia, but these quantities have real value. 73 years from now, it’s hard to imagine anyone moving financial mountains to restore the Meridian Mall or Eastwood Towne Center to its original form.
“We have gone through a period of great plenty, where throwaway buildings were acceptable,” Knibbe said.