Oct. 27 2010 12:00 AM

Just like that, Market Place is back on

Tuesday, Oct. 26 — In a swift afternoon at the 30th Circuit Court, Pat Gillespie got his brownfield plan approved for his $23 million Marketplace project after the City Council wrestled over it for weeks.

So why did it happen so fast?

City Attorney Brig Smith said he was mid-sandwich Monday afternoon during lunch when he got notice that he had to appear before Judge Rosemarie Aquilina.

Pat Gillespie and his attorneys filed a complaint Monday “for immediate consideration” against the city for not granting him approval for a brownfield plan on his $23 million Market Place redevelopment. By the end of the afternoon, Aquilina had sided with Gillespie on the grounds that the Council had no reasonable explanation, within the state Brownfield Act, to deny Gillespie.

All of this happened within a matter of hours, which puzzled At-Large Councilman Brian Jeffries. As Smith read off Aquilina’s order at the start of Monday’s City Council meeting, it was all news to Jeffries. He questioned Smith about the swiftness of the order, suggesting that Smith knew the case was coming ahead of time.

Smith stuck with the lunch story, saying he was just as surprised as everyone else to hear the news. He did not return a call for comment after Monday’s meeting.

The city can still appeal Aquilina’s decision, but that would take a five-Council-member vote, City Council Vice President Kathie Dunbar said.

But what would an appeal mean for the administration, which has trumpeted Gillespie’s project as “momentous,” if you have half of a City Council and a few peeved labor representatives who want an appeal?

Finance director Jerry Ambrose said the mayor is happy to see the “momentum” move forward, but acknowledged the underlying labor issues with the project that are “not new.”

“The mayor is committed to working with labor and the private developer,” Ambrose said. “With an appeal (to the decision), there is always room for that.”

Smith suggested during the meeting that the Council discuss these legal options in a closed session. Second Ward Councilwoman Tina Houghton made a motion early in the meeting to go into a closed session, but that was voted down 5-3 with Jeffries and At-Large Council members Derrick Quinney and Carol Wood dissenting. It needed six votes.

In Knapp’s building news, the Council unanimously approved a brownfield plan for the Eyde Co., which is looking at a $36.4 million renovation of the old department store.

A public hearing on the plan before the Council voted on it drew eight comments, mostly from City Council regulars. All eight people spoke positively of the idea of redeveloping the historic building, but three were against granting the Eyde Co. tax incentives to do so.

Rick Preuss, owner of Preuss Pets in Old Town, defended the idea of tax incentives to lure developers downtown.

“There is a cultural difference from where we are at today,” Preuss said about historic downtown retail stores compared to big box stores like Wal-Mart. “It takes great money to overcome that.”

However, the Knapp’s project downtown is unlike most brownfield plans that come before the Council. The developer is not being reimbursed for cleaning up the property through tax increment financing (TIF), but is looking for about $22.5 million in tax savings from state and federal agencies.

Another $2 million in the form of a Brownfield Economic Development Initiative grant will be applied for in a couple months that will help pay off a $5.4 million federal Section 108 loan.

The brownfield plan was drafted solely for the developers’ ability to apply for a brownfield Michigan Business Tax credit worth $4.9 million, said Karl Dorshimer, vice president of the LEDC.

Other savings include $10 million in state and federal tax credits for restoring a historic building and $5 million in federal “new market” tax credits. Because the property is in a state-identified Renaissance Zone, that freezes state and local property taxes for up to 12 years, resulting in about $2.6 million in savings.

In more brownfield business, the Council unanimously approved two resolutions amending the county brownfield plan and schedule a public hearing for Nov. 8 to extend Demmer Corp.’s brownfield plan.

The amendment to the county plan means $2.6 million more that will be freed up for the Ingham County Land Bank to rehab properties. Ingham County Treasurer Eric Schertzing, who chairs the Land Bank, said due to the growth of the Land Bank program, this extra money will need to be “borrowed” but will be paid back as blighted properties are upgraded — along with their taxable value.

The Ingham County Board of Commissioners votes tonight on giving final approval to the plan.

In other business, the Council unanimously approved the sale of the Oak Park Field Office, used by the Department of Parks Recreation, to Neogen Corp., which is looking to expand at 717 E. Shiawassee St.

The building was appraised in July 2009 for $275,000, but the city sold it to Neogen for $200,000. Jeffries said there was additional work done after the appraisal with the city assessor’s office and the Lansing Economic Development Corp., and both decided $200,000 was closer to the fair market value of the property.

The Council also passed an ordinance Monday night that rezones the property at 110 N. Magnolia Ave. in the east side neighborhood from commercial to residential. Owners of the property have said that they want to take advantage of the city’s lead abatement program, which offers incentives to homeowners trying to make their house safer.

Two resolutions out of the Committee of the Whole passed unanimously that sets Dec. 16 as an additional City Council meeting to make up for a canceled meeting in June and appoints Cynthia Ward, a Cooley Law School professor who serves on the Parks Board, to an at-large term on the Lansing Board of Water and Light Board expiring in June 2011.

From the Committee on Ways and Means, seven resolutions that transfer grant money to help build emergency shelters, rehab blighted properties and train city police officers all passed unanimously.

The General Services Committee unanimously passed four resolutions that transfer stock to new stockholders of Nuthouse, Inc., allow for a fireworks display during Silver Bells in the City next month and deny and settle special assessment tax claims to local residents.

One resident, Paul Wiegman, wanted the city to cancel a $855.38 fine for long grass and weeds on his property tax bill for a vacant lot on Butler Boulevard, but he was denied. Mai Thi Hguyen wanted the city to eliminate a $1,499.80 fine for trash and debris on her property at 1021 N. Martin Luther King, Jr. Blvd. The city agreed to settle for $749.90.