WEDNESDAY, Jan. 15 — Why did the city of East Lansing quietly auction off public land on eBay to only a few interested parties? Who was notified about the sale? And who was pulling the strings back at City Hall?
Those are a few of the questions raised last week by newly elected East Lansing Councilwoman Lisa Babcock over last year’s controversial auction of a city-owned, six-acre parcel on Merritt Road near Costco. The City Council voted 3-1 to have those questions answered, directing city staff to produce a formal report by March.
“The point is not to be punitive,” Babcock said. “We have an opportunity to learn things here.”
Mayor Ruth Beier, who opposed the resolution, voiced concerns that it could unnecessarily humiliate city staff for no real productive purpose. She felt a resolution from Council also might’ve been too heavy-handed, suggesting staff simply be requested to examine the issue.
“We’re not looking to assign blame,” Councilwoman Jessy Gregg said. “If there was something nefarious going on, it would be delightful to uncover it, but I don’t think anything underhanded happened.”
Before it was sold on eBay for $1 million last year, the property had sat vacant for more than a decade. Residents voted by 65% to sell the land for development in 2002. Offers, however, had been sparse — at least until an ordinance passed in 2018, effectively made the parcel eligible to become marijuana dispensary.
As a result of the newfound interest, city officials said they decided to put the property for sale on eBay and notified only about a dozen interested parties about the auction. A few days later, Kodiak Landarc, a Colorado-based real estate broker with marijuana industry ties, ultimately secured the winning, $1 million bid.
But the quiet nature of the sale immediately raised concerns over governmental transparency and whether officials might have shortchanged taxpayers in the process. Some argued the land was worth a whole lot more. Kodiak Landarc posted the property for sale for $12 million a few weeks later but didn’t garner much interest.
As part of the upcoming report, city officials hope to track down exactly who was notified about the sale and determine how the starting bid of $950,000 had been established. Babcock also wants any written notes, memos and emails that staff or the City Council may have generated and exchanged regarding the sale.
“This report would place all the information in a single place,” Babcock added.
Former Mayor Mark Meadows, who is still on the Council, explained at the time that he was comfortable with the live-action bidding process because the city could “put bidders against each other” and ensure the highest offer prevailed. He also noted the goal was entirely about maximizing revenue, and a standard auction house would have likely charged a 10% fee.
Last week, Meadows was eager to support the creation of the report. He said he wants to clear the air after facing various accusations that he had somehow meddled to rig the auction in favor of a select few bidders.
“I think the way this was constructed is a very excellent, lawyerly way of getting to the bottom of this,” he said.
After the City Council faced public criticism over the auction, fueled partly by speculative news coverage from East Lansing Info, every council member recognized that the auction should’ve been more widely publicized. Still, most were satisfied to have off-loaded an environmentally contaminated piece of land for seven figures.
“It’s better than any offer we’ve had in prior years,” Meadows said previously. “At the end of the day, it was a $1 million offer on property that has $3 million in environmental problems. I’d say it was a fair deal for the city.”
Planning Director Tim Fahrenbach said a site plan for the property has since been approved. It’s still poised to include a medical marijuana dispensary, a four-story hotel and a strip mall to boot. An application by a newly formed limited liability corporation has also been submitted to divide the land into three separate parcels.
Jeff Yatooma, a spokesman for Kodiac Landarc, expects shovels to hit the dirt on Merritt Road later this month. Construction will continue in phases over the next 12-18 months, he said. But residents who might’ve been counting on the popular Wahlburgers franchise to open up shop in the strip mall shouldn’t hold their breath.
“Those discussions just never panned out,” Yatooma said. “But we’re in talks regarding some other ideas.”
Yatooma also noted that tax incentives will not be requested — nor were they offered — to support the project.