Trowbridge Developer Seeking Additional Tax Incentive from City

The developer rehabbing the Trowbridge Plaza site, formerly the home of Goodrich Shop-Rite, is asking for a substantially larger tax assistance plan than the one to which East Lansing’s City Council previously agreed. His request will come before City Council at their work session tomorrow, Tuesday, September 23. The Red Cedar Community Association, the neighborhood in which the project resides, has "strongly urge[d] a rejection of this request" in a letter to Council.

Kevin McGraw, principal of Caddis Development Group, already obtained in May a commitment from East Lansing for a Tax Increment Financing (TIF) plan worth $1.4 million to the developer for this project. TIF works by capturing real estate taxes from a development and channeling it back to pay for eligible expenses.

McGraw is now asking for a plan that will channel an estimated $1,756,528 of tax revenue back to the developer instead of a maximum of $1,400,000 that was included in the original TIF plan. The proposed change would essentially cost the City of East Lansing an additional $356,528 in revenue over 16 years.

According to the City staff memo about this matter, the new request is occurring because “the Developer discovered an error in the tax estimates.” Details on the supposed error have not been made public.

On August 28, at a meeting of the Brownfield Redevelopment Authority (BRA), McGraw stated that the request arose from additional project costs and lower anticipated value of the development due to downsizing the new building from 5 to 4 stories, a change that already was made before the original TIF plan was approved. At the BRA meeting, City Manager George Lahanas opposed McGraw’s request to increase the TIF plan.

In a letter to the East Lansing Council signed by Ruth Ann Stump on September 18, President of the Red Cedar Community Association, the neighborhood group said, "Any information regarding the condition of the property for Brownfield money should have been known at the time the project was proposed. The city budget is already strained and such post-approval financial changes benefit the developer and penalize the city's financial status as well as send a message that future financial development agreements are open to change." (To view a PDF of the letter, click here.)

City Council’s work session will take place at the courtroom located in City Hall on Tuesday, September 23, at 7 pm. The meeting opens with an opportunity for any citizen to comment on this and any other matter of concern. For the agenda of the meeting, click here. The agenda provides hotlinks to relevant documents, including the staff memo.

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