Schor ‘optimistic’ City Council will approve the sale of City Hall on Monday

FRIDAY, July 19 — Mayor Andy Schor believes a majority of the City Council plans to support an agreement selling City Hall to Chicago developer J. Paul Beitler when it goes to a vote Monday night.

“He's talked to six Council members so far. None of them have raised any objections,” City spokesperson Scott Bean told City Pulse on Friday.

The purchase agreement would allow Beitler to buy the 10-story, 129,000 square-foot City Hall building, 124 W. Michigan Ave., for $2.78 million and redevelop it into a 183-room hotel.

Under the agreement, the building would not officially change hands until the city moves into a new $40 million, 75,000-square-foot city hall facility that’s set to be built on a city-owned parking lot, 425 S. Grand Ave., at the corner of Grand and Lenawee Street.  Construction, funded entirely through a state grant, is slated to start next winter and  expected to take 14 months.

Beitler's purchase would be finalized within 60 days of the city’s move, and Beitler would be required to start renovating the building within 90 days of gaining access to it. Beitler’s estimated completion date is around April 2027.

The 1967 Michigan State University graduate has had his eye on acquiring the building since at least 2017, when former mayor Virg Bernero issued an initial request for proposals for the building and selected Beitler’s response from three bids. Beitler’s plan included renovating the old Lansing Journal Building into a new city hall. However, those plans fell through because the city didn’t have a plan to accommodate police and courts at the time.

The plan gained new life in November 2022, when voters approved a $175 million bond issue that included funding for a public safety building on Washington Avenue. With a new home for police and courts in place, Schor revived talks about selling the property and moving to a new city hall facility.

Ahead of a July 8 public hearing on the sale, Schor told City Pulse that Beitler’s interest was “fairly steadfast” over the years.

“I continually stayed in contact with him and told him that we were working on it and that he's my preference. When we got to the point where we had everything worked out, he was still interested,” Schor said.

To Schor, one of the most attractive aspects of Beitler’s plan is that the latter won’t seek any incentives on it, meaning the city would retain 100% of the tax revenue for the property after it changes hands.

“This is a straight sale, so he's going to spend his own money, for abatement and all of that, to create this hotel,” Schor said.

According to the agreement, Beitler will not be permitted to “take any action, directly or indirectly, that causes the property to be removed from the tax rolls for a period of not less than twenty (20) years, commencing with the date of project completion.”

Once construction is complete, the hotel would include a third-party restaurant, meeting rooms, a pool, fitness center and street-level retail space. The purchase would also include 60 underground parking spaces, with Beitler hoping to lease another 100 spots for valet service in a nearby city lot.

Another stipulation allows Beitler to replace any part of the building’s exterior — except a portion of its western side that features the existing City Hall nameplate and a sculpture by Leonard Jungwirth.

When he presented his vision to the Committee of the Whole on June 24, Beitler said he believes his proposal offers the city numerous economic benefits due to its close proximity to both the Capitol Building and the Lansing Center.

“What’s beneficial about a hotel is that it’s not only just the employees that you’re able to provide employment for. It’s all the ancillary services that support a hotel. You have taxi cabs, you have laundry service, liquor, food service, entertainment, retail shops that will be on the ground floor. So, this really is a revenue generator that really exceeds what the city would otherwise see if this were another use such as an office building,” Beitler said.

All that’s left to do is wait for the City Council to weigh in.

“He's confident, he's optimistic,” Bean said of Schor. “But if anyone has questions over the weekend, I think he's let all of them know he's available to talk or get them more information.”