Zoning Board Denies Appeal from Marijuana Business Looking to Open on Grand River Ave.

The East Lansing Zoning Board of Appeals has denied a variance that the applicants hoped would pave a path for a second marijuana provisioning center to open on Grand River Avenue, less than 1,000 feet from one already granted approval.

Traverse City-based ABCD Properties, LLC, purchased the now-closed Oades Big Ten party store (above) at 1108 E. Grand River Ave. in 2018, hoping to turn it into a location for their marijuana business, Fresh Coast Provisioning.

But ABCD Properties effectively lost out on receiving the required local Special Use Permit for 1108 E. Grand River Ave. on April 23, 2019, when East Lansing's Council awarded a permit to a competitor, Compassionate Associates.

Compassionate Associates (operating as CA-East Lansing, Inc.) has all the required local approvals to operate a marijuana provisioning center at 1234 E. Grand River Avenue (below), in a building that has housed student apartments. It has not yet opened.

East Lansing’s marijuana regulations allow the sale of marijuana in only four special “overlay zones” and require that marijuana dispensaries be at least 1,000 feet apart in the area known as “East Village,” the area bordered by Bogue Street on the west, Hagadorn Road on the East, Grand River Avenue on the north, and the Red Cedar River on the south.

Since Compassionate Associates’ location in the East Village is about halfway between Bogue Street and Hagadorn Road — which are a little more than 2,000 feet apart — Compassionate Associates’ approval from Council effectively precludes any other marijuana provisioning centers from opening along Grand River Avenue in the East Village.

ABCD Properties was hoping to convince the Zoning Board of Appeals (ZBA) on Wednesday to provide a variance to override the 1,000-foot setback requirement.

The vote came down 6-1 against that request.

“They’re asking us to basically overrule the City Council’s decision,” said ZBA Chair Brian Laxton in explaining why he believed the ZBA should deny ABCD a zoning waiver. “They’re trying to get a second bite of the apple.”

ABCD Properties argues that regulations for marijuana sales in East Lansing are unfair

City Council’s decision in November 2018 to restrict marijuana sales to four “overlay zones” was aimed at facilitating the establishment of outlets for medical marijuana sales while also keeping the businesses out of the downtown core, away from single-family neighborhoods and schools, and away from each other so that they don’t become too numerous or concentrated.

In March 2019, City Council decided that in three of the overlay zones, marijuana provisioning centers would have to be at least 500 feet from each other’s lot lines. Only in the East Village/East Grand River Avenue commercial corridor would they have to be 1,000 feet apart.

At the ZBA this week, Traverse City attorney Michael Corcoran, attorney for ABCD Properties, argued that the 1,000-foot separation was arbitrary and capricious, since in the other overlay districts, only a 500-foot separation is required.

But East Lansing Planning and Zoning Administrator David Haywood cited testimony from former East Lansing Mayor Pro Tem Erik Altmann who had noted in previous related discussions that the East Village is special: the Downtown Development Authority generally opposes marijuana sales in its jurisdiction (and East Village is within the DDA’s district), and university officials do not want provisioning centers close to campus.

Then-MSU President Satish Udpa came to Council on March 26 and, according to the staff report on ABCD Properties’ variance request, “strongly objected to locating marihuana establishments near the university campus.” (In Michigan, governments spell marijuana with an “h.”)

Bait and switch on an earlier parking variance request?

One reason Compassionate Associates won out at Council over ABCD Properties is the very limited parking at the old liquor store, which is squeezed between a Subway sandwich shop and an Admiral gas station. In July, ABCD Properties did get a variance that would allow the business to reopen the liquor store with its relatively limited parking.

Corcoran suggested at ZBA this week that the granting of the parking variance in July meant the perceived parking problem for a marijuana provisioning center at the old liquor store had been solved.

But Laxton strongly objected, saying that when ABCD Properties came to ask for the parking variance in July, Corcoran had specifically claimed, in the words of the staff report, “that they no longer were pursuing a medical marihuana facility and that the variance was necessary to re-establish the liquor store or future commercial use.”

ABCD had a plan for winning, then Council changed the rules of the game

Corcoran also complained about Council’s decision in March to repeal an East Lansing regulation requiring a 1,000-foot separation between provisioning centers and liquor stores. ABCD Properties had been hoping that that separation requirement would give them a sort of monopoly. When buying the East Lansing liquor store, ABCD Properties was apparently hoping to close the liquor store and then sweep up the only marijuana permit along Grand River Avenue.

Council’s decision in March to remove the setback requirement between liquor stores and provisioning stores, and the awarding of a provisioning center permit to Compassionate Associates, essentially dashed ABCD Properties’ hopes.

“My clients didn’t need to open a crumby old beer store,” Corcoran said, explaining why they originally bought the property.

He said a marijuana business could demand three times the rent of a liquor store, and would revitalize business for the surrounding area.

“That’s like having a Chase Bank in there, [instead of] a liquor store,” Corcoran said.

City Council’s latest marijuana-related decision in October, allowing for recreational marijuana sales at locations approved for medical marijuana sales, does mean that a lot of money is riding on these local decisions, approvals, and denials.

The 90-minute ZBA hearing wasn’t without drama.

At the meeting, Corcoran grew visibly angry and apologized for that before the sole supporter of the applicants on the board, Alexis Vlhakis-Cole, made a motion to approve ABCD Properties’ application.

“I feel these are exceptional circumstances that are not relevant to other property owners,” Vlahakis-Cole said, noting the holding of the liquor license and the rule change for such businesses.

Vlahakis-Cole’s motion to approve did receive a second for purposes of debate. But she did not persuade any other ZBA members to join her position for the final vote.

“I don’t believe a substantial property right has been taken,” said board member Andria Ditschman. “You don’t always get the best and highest use.”

Corcoran suggested at the meeting that his clients will take their zoning appeal to the next level by appealing in circuit court. Even if they were to succeed, the company would still need to go back and try again to obtain approval for the Special Use Permit from the East Lansing City Council.

Note: The Big Ten Party Store on Clippert St. in Lansing was also called "Oades" but is now called "Sparty Liquors" according to a person answering the phone at that location.