Plans develop for REO Town hotel

Purchase still depends on zoning change


WEDNESDAY, DEC. 5 — Plans to construct a five-story hotel at the “gateway” to REO Town are inching closer to reality as developers look to solidify plans for a mixed-use development off I-496 on the southeast corner of Washington Avenue and Malcolm X Street.

A public hearing has been scheduled for early next year as local developer Brent Forsberg looks to shift the parcel into the downtown business district and construct a hotel and multi-family apartments closer to downtown. The project — more than a year in the making — still remains in its conceptual stages but could start by spring.

“It’s the gateway to the city,” Forsberg explained. “We think it’s really important to have that sense of place when you’re coming into the downtown area. It’s inviting to the city’s walkable corridor, which is Washington Avenue. It’ll help make it feel like a very cohesive part of the downtown area and we like the idea of a hotel on that site.”

The 2.5 acre parcel, just south of I-496, is wedged between the Grand River and the highway and includes a vacant commercial building. A Lansing Board of Water & Light substation is across Washington to the west. East Main Apartments is just down the street to the east.

Discussions about constructing a hotel on that site have started and stalled for months, Forsberg said. But developers have since crafted a renewed vision for the land.

Preliminary plans indicate the mixed-use development would include a two-story and a five-story building along with 128 parking spots where the REO Town sign sits on Malcolm X. The concept includes a 105- to 120-room hotel. Forsberg isn’t quite ready to name the “major” hotel flag interested in the location.

The plans, at least at this juncture, remain largely subject to change at any time, Forsberg emphasized.

Other hotel chains were interested previously but since ditched the plans because of “unstable” soil conditions, Forsberg said. But the current plans promise a “renewed sense of vitality to an area that is somewhat devoid of activity,” according to the zoning request. The goal: Help connect REO Town to Lansing’s downtown area.

“We still like the idea of the hotel there because it’s a good spot with the highway,” Forsberg added. “We’re still updating our feasibility studies to see if that’s really the best opportunity. The chances that this would open next year would be tough but we’re working to get everything settled by the spring to get something going there.”

Specific development plans — and even conceptual drawings — are still incomplete. The Lansing City Council’s Development and Planning Committee approved a request for a residential-to-commercial zoning change but still have several questions about how the development will ultimately take shape in the future.

“We don’t have a clear idea about the plans but we’ll explore that as the plans continue,” said Councilwoman Patricia Spitzley.

“It has been vacant for a long time. It’s one of those things where you look at how fast REO Town is growing and it just makes sense. I think it’ll help Lansing compete for a lot of conventions downtown.”

Forsberg said the Ingham County Land Bank struck a purchase agreement with REO Gateway LLC. and Funk Zone Investors, but it’s contingent on their ability to transfer the parcel out of the city’s DM-4 residential district. The conceptual plans hinge entirely on that zoning change before they can proceed.

BWL officials have cautioned contractors to proceed with caution on that site given its location in a designated, wellhead protection area. Machinery, for example, should only be parked on paved areas because any newly exposed soils on that parcel could lead to eventual groundwater contamination, according to recent city records.

“We have a great team making sure all of that is taken care of,” Forsberg added. “We’re excited to move forward with the city on zoning. This gives us time over the winter to lock down some of the other details. We don’t really know exactly what this site is going to look like at the moment. We’re still exploring those plans.”

The hotel plans — if they come to fruition — would mark the second new hotel set in or near downtown. Developer Pat Gillespie’s 600-block project on Michigan Avenue is slated to include up to 124 rooms. Radisson Hotel on Grand Avenue has been the only other downtown convention option for years.

At least one developer also expressed a continued interest in renovating City Hall into a hotel development.

Spitzley and Councilwoman Jody Washington both spot a market for additional hotels to help welcome visitors into the capital city. Spitzley said Lansing has been passed up for high-profile conventions simply because of the lack of nearby accommodations. Washington said the development plans, accordingly, represent a “great idea.”

“We need to have some type of development there,” Washington added. “What that will look like, I don’t know. I don’t think anybody knows yet. It’s the gateway to REO Town so it’s crucial we have something in that space.”

A public hearing has been scheduled for Jan. 14. Forsberg plans to release additional details as they become available. The final purchase of the property — along with a host of other city approvals and projected funding mechanisms — will still need to be sorted out before the construction can begin on the property.

Visit for continued coverage as the development plans continue to take shape.

Editor's Note: This story was updated to accurately reflect the name of Washington Avenue.


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