June 8 2016 12:15 AM

Bias complaint may prompt Council to forego housing approvals

The $270 million Red Cedar Renaissance Project on the site of a former golf course on Michigan Avenue is threatened by a decision by half of the members of the City Council not to vote on developments while they face discrimination charges that are being investigated by the U.S. Department of Housing and Urban Development.
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Half of the Lansing City Council, prompted by a federal housing discrimination complaint orchestrated by the Bernero Administration, is prepared to halt approval of all developments that include housing in the city, including the $270 million Red Cedar Renaissance set to break ground this summer.

After the council rejected an incentive package for 23 low-income housing units near Old Town, Mayor Virg Bernero accused four Council members — At-large members Judi Brown Clarke and Carol Wood, the Third Ward’s Adam Hussain and Jody Washington of the First Ward —of blocking the proposed development because of discrimination.

While the complaint to the U.S. Department of Housing and Urban Development is pending, Council members say they have must oppose any housing development incentives to avoid opening the city up to further legal liability as the federal housing complaint moves forward. Project approvals require five votes.

Developers and economic development officials say the boycott will delay, if not kill, projects worth millions of dollars. That includes the Red Cedar Renaissance project as well as an estimated $15 million in downtown housing developments by Pat Gillespie.

“We’ll probably wait for the water to settle a little bit,” said Gillespie. “We don’t want to be caught in the middle,” between the mayor and Council.

Bob Trezise, president and CEO of Lansing Economic Area Partnership (LEAP), said the boycott could impact a half dozen projects that the agency has been working on.

“I have a hard time believing City Council will do this,” he said. Trezise said such a move would shut down development and set the city back “a decade.”

He also noted that the move could have an impact not only on development, which brings in increased property tax revenues, but on the budget by reducing income tax from those people who would possibly move into newly developed housing.

The initial review of the discrimination complaint is expected to be completed sometime this week, said Gina Rodriquez, a HUD spokeswoman in Chicago. If federal authorities determine there is evidence to pursue a formal investigation, she said it was impossible to determine how long that would take to complete.

A formal investigation can result in a referral to the U.S. Justice Department for prosecution, or clear the way for a civil lawsuit by whoever filed the original complaint.

Bernero, for his part, accused Councilmembers of “petty political agendas” and “misguided priorities,” in a statement released to City Pulse Monday. (See P. 6.) 4He made no mention of his own role in the situation.

Not only did he host the press conference in April accusing the members of discrimination, and announced a pending HUD complaint, he also was accused by Brown Clarke, the Council president, of pressuring developer Sam Sabroury to file the complaint. Brown Clark said Sabroury in a phone call told her of the mayor’s involvement. Sabroury denied he had done so.

While the complaint focuses on the Sabroury project, the Council has advanced a plan for repurposing the former School for the Blind site in north Lansing as a mixed low-income and market-rated housing development. Due to a public notice error, the developers did not get the generous development incentive it had expected, but they have moved forward with the project.

In broad terms, the Council’s plan to halt housing approvals is part tactical, part legal.

“At this point, I don’t think I can vote for any housing developments,” Hussain said. “I think it opens the city up to serious liability.” That sentiment was echoed by Washington and Wood. Brown Clarke declined to comment.

Those Councilmembers may be acting appropriately, says Brian Gilmore, a law professor at MSU who also heads up the school’s Housing Clinic.

He said it is possible that if members voted in favor of market rate housing, opponents and federal housing officials could point to that vote as evidence of animus.

“It raises red flags,” he said.

Gilmore says without reviewing the actual complaint, which federal officials have not released, it is difficult to determine if this is politics, or a legitimate legal defense strategy at play.

This is all playing out with a backdrop of increasing acrimony between the Council and the mayor, prompted by the $160,000 plus full health benefits payout to former City Attorney Janene McIntyre, who left her post earlier this year.

The Council has gotten few meaningful facts about the McIntyre affair. Some on the Council have tried to get outside legal advice as the body tried to uncover the reasons for McIntyre’s departure, but interim City Attorney Joseph Abood has stood in the way. Use of outside legal counsel has to be approved by the Office of the City Attorney, and then only if the office determines it does not have the expertise to handle the legal issue at hand.

If a formal housing discrimination investigation is begun, the Council will face an immediate fight over legal representation. The same members of the Council have a difficult relationship with Abood. On top of that, Bernero has made no bones about whom he believes the city attorney is ultimately responsible to: the mayor. The city attorney is appointed by the mayor, with the advice and consent of City Council, and is the attorney for both branches of government.

Bernero responds

Lansing Mayor Virg Bernero is apparently undeterred by the news that new development projects in the city may be blocked while the federal government assesses whether City Council members are guilty of discrimination in the housing arena. Asked to comment, he issued this response:

“For more than a decade my team and I have worked diligently, against extraordinary odds, during the toughest economy since the Great Depression, to bring new jobs and new investment to this city. Those efforts have directly resulted in more than $2 billion in new investments and thousands of new jobs in Lansing, with even more on the way through transformational projects like the Red Cedar Renaissance. Now it appears we have a handful of Council members who are planning to derail Lansing’s progress by obstructing new economic development projects. Such a position is completely unacceptable and indefensible. It is not just an act of capitulation and unilateral disarmament in a hypercompetitive global economy, it is a declaration of war against the very people who will benefit most from new job-creating investments and new housing opportunities — the citizens of Lansing, many of whom are still struggling to make ends meet and to find quality, affordable housing for their families. Never would I imagine that the elected representatives of our citizens would sink so low as to threaten the future growth and prosperity of this city based on their petty political agendas. It is a sad reflection on their misguided priorities as public officials. I can only hope they will reconsider and change course. They will certainly be held accountable for their actions.”