March 1 2017 01:04 PM

While other cities collapsed, Lansing progressed despite Great Recession

In January 2006, newly sworn-in Mayor Virg Bernero was unpacking boxes in his new ninth floor office overlooking the Capitol. It was still the New Year’s holiday, but he was ready to get to work.

Eleven years and two months later, Bernero is figuratively starting to pack those boxes. He announced on Monday he will not seek a fourth term, paving the way for an open primary to replace him.

Bernero’s administration has been filled with ups and downs, twists and turns and continuous action. He’s created a public persona — The Angriest Mayor in America — that has served as a two-edged sword, and he’s led the city through the worst economic crisis since the Great Depression. And under his leadership he has remade the skyline of the city.

His legacy will be development projects many thought could never happen and piloting a ship through perilous economic times and budget deficits, but also of a complicated and tumultuous history of battles with city elected officials, officials from other jurisdictions and even with citizens.

“His legacy should be that he moved this city through a very, very dark time, and we came out better for it,” said 2nd Ward Councilwoman Tina Houghton.

When Bernero first took office, he inherited an $11 million budget shortfall that required serious cuts. That was two years before the rest of the country was seized by the Great Recession, but Michigan was already feeling its pressure as the foreclosure crisis spiraled. Property values were beginning to sag, and the state was cutting revenue sharing. It forced Bernero, his administration and the City Council to find cost-saving solutions while keeping the city’s essential services in place and functional.

"We can't turn the ship of city government around single-handedly. We'll need the entire staff of 1,150, from top to bottom,” he said during his transition in 2005.

The result of those austerity measures shrank the city work force, to 851 budgeted positions this fiscal year. Those cuts were achieved by privatizing the city’s information technology work as well as much of the parks department. City-county partnerships negotiated by Bernero moved Potter Park Zoo and the 9-1-1 Center employees to Ingham County government.

“His work steered the city through an era of austerity after the Great Recession,” said James McClurken, a candidate for the 4th Ward City Council seat and a Bernero appointee to the Parks Board. “He did an admirable job of keeping up services even when there was no money, and he should be proud of that.”

While the city was navigating the economic crisis and trying to prevent an avalanche of financial woes from crushing it, Bernero also sought out new investments in Lansing.

When Bernero came into office, the space across from the baseball stadium was a parking lot — the multi-story building that had sat there torn down years before by a zealous reformer, Mayor Terry McKane. The hulking Ottawa Power Station on Grand Avenue, reduced to housing water cooling equipment, cast a forlorn shadow alongside the Grand River. The downtown district was struggling; the former Knapp's Department Store stood unused.

The redevelopment of the Ottawa Power Station as the headquarters of the Accident Fund Insurance Co. was the “pinnacle” that broke through a stagnant development landscape, said Bob Trezise, CEO and president of Lansing Economic Area Partnership. In 2006, he worked for Bernero heading up the city’s economic development programs.

“This was the tough nut to crack,” Lansing Mayor Virg Bernero said in an interview with City Pulse in 2011. “That was the symbol, either of stagnation or success, and we knew it.”

“That project had a profound impact across the city,” Trezise said Monday. “It was this project that nobody thought ‘little Lansing’ could do. But we did. And the psychological impact of that was immeasurable.”

Other developments followed. The Stadium District. The Outfield. The Marshall Street Armory. SkyVue. East Town Flats. The Knapp’s Center. So much activity in fact, that as the state and country were being battered by the economic crisis, Bernero could proudly boast of “cranes in the air” as he sought reelection in 2009.

“I think the mayor should be especially proud of his work on projects like the Accident Fund rehabilitation and the proactive work surrounding the lead water line replacements,” said Lansing School Board member Peter Spadafore. He is seeking an at-large seat on the City Council this year.

But he also leaves a trail of announced projects that went by the wayside.

Twice he has announced specific plans and developers for the School for the Blind property on Pine Street. A 2013 proposal involving the Ingham County Land Bank and The Great Lakes Capital Fund (now Cinnaire) never materialized, despite City Council approval. A new proposal announced last year ran into scheduling and public notice snafus, delaying approval of payment in lieu of taxes deals to subsidize low-income housing in the new development, proposed by Cinnaire and Indiana-based TWG Development. The second proposal is still working its way through city and state authorities for various abatements and approvals.

In addition, Bernero touted the redevelopment of the Holmes Street School on the city’s east side by Spartan Internet.

In 2008, Spartan Internet Properties received an Obsolete Property Rehabilitation Act tax exemption as well as a personal property tax exemption, worth a combined $449,000, according to the Lansing Economic Development Corp., from the City Council for the Holmes Street School property. They each last 12 years. Five years late, the organization and deal came under scrutiny when it was revealed the property taxes had not been paid on time. The property was going to be redeveloped into a home for the advertising and consulting business run by Spartan Internet, with assurances to the surrounding community it would also offer a tech center for neighbors to access.

That property now stands empty, renovations half done. The former schoolyard is stacked with construction material and some of the windows are covered in plywood. A for sale sign is planted on the property’s northeast corner.

Voters in August 2012 approved a ballot measure allowing the city to sell the Waverly Golf Course, owned by the city but located in Lansing Township. It was a move to balance the city’s shrinking budgets and retain essential city services. Schostak and Brothers signed a purchase agreement for the property in 2014. The purchase agreement would have had the company pay $5.8 million for the 121-acre parcel, which it would redevelop into a retail and residential area. However, the sale was contingent on rezoning by the township.

The rezoning never happened. The Schostak development signs are gone, replaced by a for sale sign.

With 10 months left in office, Trezise said Bernero has some developments still coming. The biggest is the Red Cedar Renaissance project where the city’s Red Cedar Golf Course was on Michigan Avenue. But he also noted, “We are talking to several developers about big hotel projects in downtown” now that the deal Bernero inherited has expired that gave the Radisson exclusivity.

Over on the city’s west side, the longabandoned former GM properties have been left as wind-blown lots. But last year the Racer Trust announced it had found a buyer, Northpoint Developmen, of Missouri, for all of RACER’s Lansing-area properties, known as Lansing Plants 2, 3, 5 and 6. The Plants 2 and 3 properties are in Lansing Township, the Plant 5 property is in Delta Township and the Plant 6 property is in the City of Lansing. Together, the properties total 259.6 acres.

Without providing specifics, Trezise said the project would bring manufacturing jobs back to the properties.

“It’s a game changer for the city and the region,” he said. “It will be manufacturing back to the properties — with hundreds, if not thousands of jobs.”

Not everyone lavishes praise on the developments under Bernero.

“It was good for developers,” said neighborhood activist Elaine Womboldt. She is the facilitator of Rejuvenating South Lansing, a community activist group but spoke as an individual. “But neighborhoods were left behind.”

Penny Gardner, a resident of the Walnut Neighborhood, was a supporter of Bernero until Niowave, a high tech business he helped lure to the city, built a giant pole barn on its property. It blocked out sun for nearby properties and did not fit into the neighborhood. Neighbors were up in arms, but Bernero and his team defended the company and the pole barn. Eventually, the fight went to City Council. The Council tried to rescind tax abatements given to the company, only to be told there is no provision in state law to allow that to happen.

The neighborhood, Gardner said, was left feeling abandoned by the mayor.

Those developments are also criticized by so-called dark money groups, which do political education using untraceable funds. They’ve attacked the tax abatements given out under Bernero as sweetheart deals to developers that leave Lansing taxpayers holding the bag. Trezise notes that the developments bring jobs, and in many instances new residents, and that increases the city’s income tax rolls. He noted in the last two years, the city has posted small gains in population, reversing a trend of nearly 40 years.

“I do question his philosophy,” said Ryan Smith, president of Cherry Neighborhood Association. “I think the philosophy is more of a get-the-tail-to-wag-the-dog mentality where we bring in all these developers, we fund it on the backs of taxpayers, and I question really how much the residents and the little people of Lansing benefit from it.”

All of Bernero’s successes with the developments and budgets were also fraught with his penchant for running his mouth. A form of verbal Ebola, if you will. His straight-talking mantra morphed over time into the persona of America’s Angriest Mayor, and for most interviewed that persona was a double-edged sword. He could lavish praise on those in his good graces, and he could fill voicemail messages with profanity-laced missives. He was not above calling Lansing Township North Korea, saying 1st Ward Councilwoman Jody Washington was just her predecessor, Eric Hewitt, in drag, or calling former Council President Brian Jeffries a “piece of shit.”

“He’s proud of that title” of angriest mayor, said Councilwoman Carol Wood who ran against him in 2009. “There are times where that title has worked and there are times where that title has not.”

It did in 2008, when he caught the attention of the national media for his spirited advocacy of the auto industry bailout during its darkest time.

Houghton said that personality trait was what helped get the city through the Great Recession. “Without that I am not sure if wouldn’t be like Flint or Detroit,” she said.

But Bernero’s mouth also troubled some in the community.

“He’s very divisive. He’s a “my way or the highway,’ kind of guy,” said Cherry Hill’s Smith. “I think that was sexy to people when it first started. Unfortunately the negative and divisive tactics have really weighed hard on people over time.”

Bernero rode into office in 2005 as a progressive reformer, ousting Mayor Tony Benavides. Part of Bernero’s appeal was to the LGBTQ community. He often told the story of his brother dying of complications of HIV infection and told the community he stood with them. He pushed, along with City Councilwoman Kathie Dunbar, for the adoption of a comprehensive nondiscrimination ordinance that would include the LGBTQ community. That was adopted in 2006, a decade after the city rejected a similar law.

But he also defended the Lansing Police Department when it released the HIV-positive status of a man arrested in a gay sex sting operation in Fenner Nature Center in 2009. He ultimately sought guidance from former Attorney General Mike Cox, who ruled the city had the right to release it under Michigan’s Freedom of Information Act. In 2013, Councilwoman Washington raised concerns about a waive of anti-LGBTQ violence sweeping through Russia and particularly St. Petersburg. Her concern? The city had a sister city’s relationship with the city. She wanted to end that, but Bernero challenged her, saying the city should work with counterparts in St. Petersburg “diplomatically.”

McClurken, who is gay, said that he thinks Bernero’s commitment to LGBTQ issues was “very personal,” but in the instances above, “They weren’t just as important to him.”

On the campaign trail in 2005, Bernero hammered at Benavides when it was announced many of his top deputies were leaving the city with what Bernero, and others, criticized as “golden parachutes.” He promised to prevent such things from happening under his leadership.

Yet there have been the $650,000 settlement with former BWL General Manager Peter Lark and the $160,000 settlement with former Lansing City Attorney Janene McIntyre.

Despite his work righting the finances of the city, it remains in significant peril with a looming $600 million in legacy debt owed to former employees. Bernero was able to negotiate tough deals and concessions from the city’s bargaining units and unions, creating a tough love/hate relationship with organized labor, which had originally backed him.

One solution to the long-term debt concern recommended by Bernero’s financial health team was selling BWL. He originally resisted that call. But in 2015 — concerned that a bankruptcy judge would force Lansing to sell the BWL — he said he was “open” to studying it and tasked the Financial Health Team to do so. His decision not to seek reelection frees him to call for such a sale, although getting it through the Council so it can be placed on the ballot is a steep challenge, given that four incumbents face reelection this year and that public sentiment undoubtedly runs strongly against it.

Much of the Bernero legacy is written on the Lansing skyline and the history of the city’s budget during economic crisis — but he has 10 months left, and he has promised he’s not stopping his work for the city until his term is over. What his final legacy might be has yet to be inked.