City Again Names DTN as Preferred Developer for Park District

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Wednesday, August 5, 2015, 12:02 pm
By: 
Chris Root and Alice Dreger

Image: DDA-owned rental houses along Evergreen Avenue, included in the pre-development agreement approved last night.

With little discussion, East Lansing’s City Council last night unanimously approved a “pre-development agreement” with developer/landlord DTN for the Park District. The agreement covers only the publicly-owned properties in the Park District area on the west side of downtown. These include two City-owned parking lots on Abbot Road and several old houses along Evergreen Avenue owned by the Downtown Development Authority (DDA) that currently are being rented. It does not include the blighted PDIG-owned properties along Grand River and Abbot Road that are due to be auctioned at a foreclosure sale tomorrow.

The Council’s approval of the agreement indicates that it wants to work with DTN and not another developer. In mid-2013, Council selected DTN as the preferred developer for these publicly-owned properties from a field of six developers that responded to the City’s Request for Proposals and Qualifications (RFQ/P). The agreement also provides that DTN is not expected to repeat the charrettes that it held the fall of 2013 to receive public input.

The agreement that the Council unanimously approved last night changes only a series of deadlines for consideration of redevelopment plans in an agreement that is otherwise the same as one the Council approved in March, 2014. The agreement does not spell out a specific plan for the area, and the usual process for considering a site plan and possible tax incentives lies ahead. Also, any development involving the parking lots would require that East Lansing voters approve the sale of those parking lots on a ballot.

City Planning staff Lori Mullins told Council last night that in June, DTN wrote to the City requesting “reengagement” on this project following citizens’ vote to change the City Charter to lower the threshold for the City to sell public properties from 60% to 50% of those voting. That Charter change vote followed a failure to get citizen authorization last November for Council to sell the parking lots in this development plan. (Of those voting, 56.6% approved the sale, at that time not enough to pass.)

Mullins told Council last night, “Everyone wants to see [this project] move as quickly as possible.”

The scope and timing of DTN’s Park District plans are complicated by the current status of the privately-owned properties adjacent to the area covered by this pre-development agreement. Questioned by Council, Mullins said that much uncertainty remains about what will happen with the PDIG-owned properties that are currently in default, including the “big bank building” at Abbot Road and Grand River Avenue, the commercial properties along Grand River Avenue just east of Peoples Church, and the tan brick Evergreen Arms apartment buildings. Even if these seven parcels are sold at the mortgage foreclosure auction tomorrow, PDIG will have six months to come up with funds to “redeem” the properties, which means PDIG could regain control of these blighted properties.

Mullins’ memo to Council said that DTN is interested in “coordinating the development of these properties with the development of the privately-held [PDIG-owned] Park District properties.”

We asked Colin Cronin, DTN’s Vice President, after last night’s Council meeting if DTN is planning to bid on the PDIG properties at the auction tomorrow. He said, “We are trying to acquire those properties, yes. We will be there on Thursday.”

DTN’s desire to buy these properties is not new. DTN informed the City during the 2013 RFQ/P process that it wanted to incorporate the PDIG-owned properties in its plans for the Park District. DTN’s presentation to the RFQ/P Review Team in February 2013 included a “Concept Plan” for both the public- and privately-owned land. DTN attempted to negotiate a purchase from PDIG in 2013, but it fell through.

The latest version of DTN’s project plan called for “multi-family rental housing,” rentals restricted to people aged 55 and up, retail space, office space, a parking structure, and possibly owner-occupied housing above the parking structure. (See a recent staff memo for an overview, and DTN’s latest plans, from September 2014, available here.)

Councilmember Ruth Beier said that before voting in favor of the agreement she wanted to “give a message to DTN.” She said that the community input on the project had clearly shown interest in senior housing and services to support senior and neighborhood residents, including a grocery store. She said she wanted more than more student housing.

Mayor Nathan Triplett said he saw approval of the agreement as “setting the framework for discussion.” He said there was still work to be done in terms of planning and selling the parking lots.

As we previously reported, Councilmember Susan Woods received a total of $1,000 in campaign contributions from the president and vice president of DTN, representing about 10% of the money she raised for her Council campaign. Other Councilmembers do not appear to have received financial campaign support from DTN principals.

East Lansing’s Downtown Development Authority (DDA) approved the same predevelopment agreement at its June 30 meeting, because the DDA is also a party to this agreement.

DTN’s Cronin told us after last night's Council meeting that he’s “pleased,” adding, “This is just the first step in the process of trying to get working in downtown East Lansing again. A lot of hurdles will have to be overcome still, but this is the first step of what I’m sure will be a number to try to redevelop that area.”

DTN’s previous plans for the Park District included a multi-story apartment building at 404 Evergreen Avenue owned by Hagan Reality, but the option for DTN to buy that property has now expired. That property may yet be included in final plans, depending on how agreements are worked out between Hagan and DTN.

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