At least half of the Lansing City Council now leans against the current proposal to redevelop the old Red Cedar Golf Course — more than enough votes to kill it.
Some of the most recent changes to the proposed $250 million redevelopment evoked a sharp critique from several members when the Council met last week, including concerns over the spread of student housing and the uncertain plan for market-rate housing.
This week, at least four City Council members are looking to send developers back to the drawing board, threatening to block the tax incentives to get the ambitious project off the ground.
Opposition from just three will kill the deal. Real estate agreements require six votes to pass in Lansing. Without support, the project sinks.
But developers say they are working quickly to alleviate the City Council’s concerns.
“This has just not developed into the project that I’ve been expecting over there,” explained Council Vice President Peter Spadafore. “I’m hoping they hear our concerns and bring us back a revised development agreement. We need to find something else to work with here, because I believe this would get turned down.”
The project is estimated to create 400 jobs by the time it is completed in 2023, according to the developers, Joel Ferguson of Lansing and Frank Kass of Columbus.
But those plans will never come to fruition if they can’t pass muster on the City Council. Spadafore and Councilwoman Patricia Spitzley said that absent major changes they plan to vote against the development and its tax-increment financing when it comes before the Council April 22. Councilmen Adam Hussain and Jeremy Garza are also leaning against it.
“The eleventh hour is chiming and they put forth some drastic changes at the last minute,” Spitzley said.
“They think we don’t have options other than an assisted living facility and some graduate housing,” Spitzley added. “But that’s where they’re wrong. We can still turn them away.”
Added Hussain: “I’m looking for our concerns to be addressed. I’m really not comfortable moving forward if those are not addressed. I do think the development team is listening and working to make sure some of our questions are answered, but I’m certainly a whole lot closer to ‘no’ on this project than I’ve ever been before.”
The developers plan to transform the floodplain on the edge of Michigan State University into a combination of market-rate and student housing, two hotels, a parking structure, a senior care facility, an amphitheater and various mixed-retail spaces and restaurants. A public park is also planned on site.
But the “game-changer” of a project, as it’s so often billed, was roasted by the City Council last week. Among the concerns: Two separate hotels would now be located in the same building instead of individual ones. Student housing was spread further across the site. “Active senior” housing had disappeared entirely — and so did the developers’ promise for 115 two-bedroom units.
City Council members voiced objections over the potential shrinkage, especially the larger apartments that were once said to have been designed for “multi-family” housing. Developers, in response, said their prior room estimates were only for tax assessment purposes with no bearing on reality. Those plans haven’t been finalized.
The student housing portion — as outlined by city officials — is now also planned to fit inside three buildings on the site, instead of the “one or two” as noted in the existing agreement, which the Council approved unanimously last year. Council members voiced concerns that the development plans are more geared toward students rather than young professionals or small families.
The city once billed the Red Cedar project as a “multigenerational mixed-use global village.” But Spitzley and Councilwoman Jody Washington both referred to “bait-and-switch” tactics among developers as plans were adjusted. Spadafore called it “Chandler Crossing in a swamp,” referring to East Lansing’s student apartment development and Red Cedar’s ground conditions that will need to be remedied.
Project Manager Christopher Stralkowski has been talking with City Council members to address their concerns. He clarified: Besides designated student housing, the remaining apartments will only be built into a mix of “luxury” one- and two-bedroom units that won’t be marketed specifically for college students.
He also said the first phase of the project will include one building with 600 student beds. It’s only the next phase — which could always be adjusted as construction plans continue — that’s set to include 500 more student beds. Stralkowski was unable to confirm whether the second phase includes one or two buildings.
“There was no intent on doing a bait and switch,” Stralkowski added.
But after seven iterations to the Red Cedar’s proposed development agreement, the City Council has its doubts.
“From what I’m seeing — and how things are changing with more student housing — I just don’t know if I can support it anymore,” Garza added. “I know there are a lot of what-ifs at the moment. If we’re going to be giving tax incentives, I want to know everything. As of right now, I definitely still have a lot of questions.
“I just hope they’re not trying to pull the wool over our eyes.”
The project also has some support. Because developers clarified that the project will not include any studio apartments, Councilwoman Kathie Dunbar’s initial concerns about an overemphasis on student housing have been alleviated. Councilman Brian Jackson said none of the tweaks were a “deal breaker” for him regardless.
Washington said she has no other option to taking a “pragmatic” approach. If the City Council rejects the proposal, she doesn’t think another developer would be willing to tackle the project. And that’s not a risk she’s willing to take; the “gateway” to East Lansing has far too much potential, she stressed.
“They made a commitment to make a diligent effort to market this to the non-student population,” Washington added. “As for the development itself, I’m OK with it being smaller. Everybody always says this is such a great piece of land, but nobody is really clamoring for this space. I’m not sure we’d ever have an alternative.”
Council President Carol Wood didn’t return phone calls.
Kass declined to comment.
“I don’t see anything wrong with it,” MSU Trustee Ferguson said about the proposed changes when reached by cell phone while he was attending an MSU game in the NCAA tournament last week. “Our plan speaks for itself. I’m not going to comment about this.”
Additional changes to the amended development agreement included a higher purchase price — from $2.2 million to $2.22 million — in consideration of a delayed closing date, which was bumped back to July 31. Restaurant space is also pegged to shrink from what was once about 40,000 to about 35,000 square feet.
Stralkowski said some of the changes were only made to make the project more financially viable for developers. And after feedback from the City Council, additional changes to “beautify” the project could be en route.
“Sometimes, the choices aren’t ours to make,” Stralkowski added. “Sometimes the choices are made by what it is that we know that we have to deal with on this particular site, dealing with the condition but recognizing the market, recognizing the needs and the wants of not only the Council but the residents in the surrounding areas.”
Although student housing is now proposed to consume yet another facility in the main section of the development, the number of student beds was reduced from 1,222 to 1,100. The parking structure is also now “contemplated” to be partially owned by the city. An agreement also confirmed work will be completed at a prevailing wage.
Still, Spadafore slammed developers for the “acres of hardscape and parking” proposed along the riverfront. He offered them only one ultimatum this week: Figure out a better mix of housing and green space or risk rejection for a proposed $54 million in sitework, for which developers would be reimbursed with interest by offsets in property tax payments.
Lansing taxpayers can find a better use for their tax money, Spadafore argued.
“We have a long history of underutilizing our riverfront,” Spadafore added. “We need that to change.”
Stralkowski also said the latest changes to the proposed development agreement didn’t do anything to alter the layout near the riverfront or increase the amount of hardscape or surface parking. Regardless, his team is now exploring ways to enhance the riverfront in response to Spadafore’s concerns. It’s a challenge, he contended.
“We’re being painted as being sort of the bad guy. There’s no outcome yet. We’re still working toward an outcome,” Stralkowski said. “This isn’t the first time where we’ve had to respond to changes of the plan.”
Total investment: $380 million
Purchase price: $7.5 million.
Required site work: $78 million.
City bond liability: $38 million,
which was later reduced to $10.7 million.
1,248 student housing beds in one or two buildings.
40,000 square feet retail/restaurant space.
200 market-rate apartments for
"multi-generational mixed-use global village”
55 one-bedroom units and 115 two-bedroom units.
112 assisted living and memory care units.
98 “active senior” apartments
Two hotels.
Two parking structures.
One Sparrow Hospital professional building.
Amphitheater.
Ice skating rink.
Public park.
Total investment: $250 million
Purchase price: $2.22 million.
Required site work: $54 million.
City bond liability: $0.
All bonds will now be backed by the developers.
1,100 student housing beds in three buildings.
35,500 square feet retail/restaurant space.
150 “luxury” one- and two-bedroom apartments with no specific composition for the layout spelled out in the development agreement.
120 assisted living and memory care units.
No “active senior” apartments
One, dual-brand hotel.
One parking structure.
No Sparrow Hospital professional building.
Amphitheater.
Ice skating rink.
Public park.
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