Downtown Albert Avenue Project Comes Out of Limbo

Above: The townhouse-style rentals just west of the properties set to be redeveloped in a similar fashion.

That smaller downtown redevelopment project that went into limbo last month, following Council’s inaction on it? This week, East Lansing’s City Council approved a site plan and special use permit for Hagan Group, LLC, for that project.

But the decision was a squeaker — 3-2, with Erik Altmann and Ruth Beier dissenting, and with the developers pushing back at objections raised by Council Members. The approval came after months of hearings, lower-level green lights, and a motion to approve by Council Member Aaron Stephens that wasn’t seconded on May 9, leaving the matter hanging at the time.

The project will span 525 and 533 Albert Avenue and will involve demolition of the existing houses at the sites and construction of a three-story townhouse-style structure featuring three separate units, each containing a basement and seven bedrooms.

The new townhouses will be nearly identical to the three Hagan Realty constructed right next door nearly seven years ago. They’re the Hagans’ best performing properties, Brian Hagan told ELi. If valued by East Lansing’s assessor at the same rate as the properties next door, revenue from real estate taxes on the properties will quadruple from this redevelopment.

Below: The existing townshouses, to the left, and the houses to be demolished and replaced with a similar structure.

Each unit or townhouse is to be licensed for eight unrelated individuals or a family. But, Hagan said, the location means that residents will most likely be students at Michigan State University.

“The reality is you're right across from campus,” Brian Hagan told ELi following the meeting.

From the early stages, the project proceeded as one normally would, Hagan said. The site plan, along with applications for a building permit and a Special Use Permit were submitted in late January. (A Special Use Permit is required because each unit has more than four bedrooms.) City staff determined the project “meets the applicable required conditions” for its zoning. The East Lansing Planning Commission voted unanimously to recommend approval.

Still, at the May 9 public hearing — with Council Member Shanna Draheim away — City Council didn’t even move to a vote. Beier raised concerns about the look of the new project versus existing homes, calling the current buildings at 525 and 533 Albert Avenue “beautiful craftsmen homes.” (They are shown below.) She also asked about the rise in occupancy and parking plan.

Also at that meeting, Altmann asked Planning and Zoning administrator David Haywood to detail how the planned project would fit with the City’s new Comprehensive Plan and whether that was brought up during Planning Commission meetings.

The new Comprehensive Plan, called “The Bigger Picture,” calls for higher density development in the area of the project, potentially with buildings up to 10 stories tall. However, the onus for the Hagans was to meet the RM-32 zoning requirements, which the project does. Haywood acknowledged this at the May 9 meeting.

After Council’s inaction on the proposal on May 9, the project ended up back on the Council agenda for this week’s meeting, on June 19. There, Hagan explained that, even though the project doesn’t fit the new Comprehensive Plan, it is profitable for them and they maximized the use of the lots to get as close to what the Comprehensive Plan would call for, while still meeting RM-32 zoning requirements.

At the June 19 Council meeting, similar issues of density and the Comprehensive Plan were brought up. For a brief period, Altmann and City Attorney Tom Yeadon discussed whether the Comprehensive Plan would hold up legally if used as a reason to deny the project. Mayor Mark Meadows asked if there was any precedent for that.

Ultimately, Yeadon hadn’t found any case law regarding the matter, and surmised that the only standard the project could legally be held to was the RM-32 zoning code.

“We got to Council and it seemed like an unnecessary standard that all of a sudden we were supposed to meet,” Hagan said to ELi after the meeting.

On top of the Comprehensive Plan concerns, Altmann and Meadows also asked about possible changes to the parking plan, potential changes to maximum occupancy, and the possibility of a rezoning.

At the meeting, Brian Hagan pushed back, noting the project as it stands is already an extremely profitable model for them. His brother, Matt Hagan, who is Hagan Realty’s lead contractor, explained how the limitations of the lot and costs make the plan they submitted the most logical.

“This is the one that makes the most financial sense for this lot,” Matt Hagan said of the plan at the meeting.

Altmann also said the project seems to be for one demographic, which Brian Hagan felt was hypocritical, coming from Council.

“Well,” Hagan told ELi after the meeting, “single-family homes built on Virginia [Avenue] that the City has subsidized, those are for sure built specifically for families. They're definitely not built for students—they're deed-restricted.” (Hagan was referring to the Avondale Square project.)

Now with everything approved by Council, the Albert Avenue project is cleared to proceed. The Hagans will need to wait to start the project until next summer, either May or August of 2019, due to current leases on the 525 and 533 Albert Avenue properties.

In any regard, Brian Hagan is glad the approval process is over.

“The project we're presenting is a proven success for us already and it's perfect for the circumstances that we have in place,” Hagan said.

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