At long last, Beitler may get to buy City Hall for a hotel

Michigan State University alum John Paul Beitler remembers his undergrad years as when his interest in architecture flourished, paving the way for a successful career as a Chicago developer.

Now president of Beitler Real Estate Services, the 1967 graduate has long eyed a passion project: turning Lansing’s City Hall into a hotel.

Beitler tried to purchase it in 2017 after then Mayor Virg Bernero selected his plan from several proposals because it would save the landmark mid-century-modern building. But after taking over in 2018, Andy Schor put it on hold because the Bernero proposal for a new city hall did not accommodate police and courts. However, voters approved a $175 million bond issue, including a public safety building on Washington Avenue, clearing the way for Schor to give Beitler a green light after announcing plans for a new city hall.

Now, it is up to the City Council, which will decide on a $2.78 million purchase pact on July 22.

Judging by the lack of public opposition at Monday’s public hearing, Beitler may finally see his dream come true.

The only public comment was from a Council regular, Loretta Stanaway, who cited the “ridiculously low price.”

“We need an outside, independent, unbiased current assessment of the value,” Stanaway said, “because if it were just a hole in the ground with no building on it, it would be worth more than what we’re getting offered.”

The building was appraised under Bernero for $4.2 million in 2015 and then $3.5 million in 2021 before sinking to $2.78 million last year.

Schor said earlier that in the last nine years, “this building has significantly deteriorated. So, it’s not a huge surprise that the appraisal is a lot less.” He cited asbestos removal as one of the challenges the Beitler stands to inherit if the sale is approved by the Council.

Council members have raised questions about the difference in appraisal results, but none have indicated opposition to the plan because of it.

Beitler and his son, John Paul Beitler III, attended the public hearing but did not speak. They also declined an interview.

They said their piece on June 24, when they presented their vision of transforming the space into a 183-room hotel to the Committee of the Whole.

Beitler explained how in the 1960s he first became acquainted with the 126,575 square-foot, 10-story building while working at the former Jack Tar Hotel, now the state’s George W. Romney Building, across Michigan Avenue.

Then, the 1958 building was less than a decade old. Beitler said he’d marvel at the architectural prowess of local designers Lee and Kenneth Black. He called it “an architectural wonder and statement.”

A rendering of the Beitler plan.

“It was beautiful and something Lansing had never seen before,” Beitler said. “It has an architectural heritage that is the cornerstone of the city’s buildings downtown, and I don’t want to see a wrecking ball knock it down — not even one stone.”

If Council approves, Beitler would purchase the building “as is” and without any financial incentives attached, meaning the city would retain 100% of the property taxes. The hotel would also include a third-party restaurant, meeting rooms, a pool, fitness center and street-level retail space.

In buying and renovating the dilapidated property, Beitler said he wants to “reposition” it as a “revenue generator” for the city and local economy.

The sale would work in tandem with the development timeline for the new, $40 million city hall at the corner of Grand Avenue and Lenawee Street, now a municipal parking lot. Designs are expected around December, followed by a 14-month construction process ending in February 2026.

Under the purchase agreement, the Beitler team would close on the sale within 60 days after city employees move in. Beitler’s anticipated completion date is April 2027.

Beitler III, the company’s vice president, said the property “may not be efficient for a modern office building” but that it was “almost ideal” for a hotel.

“With a diverse population and a diverse source of uses, you have the drivers that a hotel needs to live on year-round,” Beitler III said. “And while another building may require demolition, this does not.”

The purchase would include the 60 underground parking spaces, with Beitler hoping to lease another 100 spots for valet service in a nearby city lot.

Schor noted that Beitler also “volunteered” a stipulation in the purchase agreement to preserve Leonard Jungwirth’s sculpture on the building’s west side after renovation.

The proposal has garnered letters of support from Choose Lansing president Julie Pingston, local developer Patrick Gillespie and downtown hotelier Patrick Perry, the general manager of the DoubleTree by Hilton since it opened last fall in the former Radisson, 111 N. Grand Ave.

“I have observed an increasing demand for hotel rooms that far exceeds our current capacity,” Perry wrote in a letter he sent to Council on July 1. “This shortage of rooms not only affects our ability to accommodate visitors but also has broader implications for the local economy. By addressing this need, we can ensure that our city continues to thrive.”

— TYLER SCHNEIDER