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A weekly show from the folks at East Lansing Info breaking down all the news and happenings in East Lansing, Michigan.
Hello, and welcome to East Lansing Insider. This is Dustin Dufort Petty, a reporter with East Lansing Info. I am joined today by our managing editor, Luke Day. It's been a busy week in East Lansing as far as development projects have gone. City council's made some decisions that will affect the future of many of those several of those projects.
Dustin DuFort Petty:Luke, do you wanna break down what happened?
Lucas Day:Yeah. So there was two big developments that were on the city council agenda. One was about 750 beds in a housing development, 12 story development called the Howard that's been planned for Downtown East Lansing where the student bookstore currently is 400 block of Grand River. And then the other one was about 430 units and 10 story building that was planned for the Bailey Parking Lot. And the Bailey Parking Lot development was denied by city council where the the Howard was approved.
Lucas Day:So there's gonna be a new 12 story building that is built on Grand River. The estimated timeline on that is about two years there. It looked in the agenda. I don't know if because there's been some votes pushed back that construction will start later, but, the initial timeline at least was for that the the current building that hosts student bookstore and some other retail spaces to be demolished in August. And then for the, apartment to be finished in July 2028.
Lucas Day:So they're trying to hit the ground on that pretty quick. This is the first big development that we've seen downtown since there was, three or four of them pre COVID. Right before COVID, had that big boom where you had all those developments. And this is the first one since then. So these two these two developments have kind of been going alongside each other for the last close to a year, ten months.
Lucas Day:They've been getting discussed publicly. They were going through city meetings as early as late last year. And I mean, my question throughout the process was, is this an either or thing where the city's only gonna approve one of them because they've talked about, you know, do we need this downtown town housing even though we've got studies that say, yes, you do need downtown housing. The city council had previously set a goal to add 1,100 housing units. So this doesn't quite add what they set their goal for, but it does take out a good chunk of it.
Lucas Day:And, yeah, when these were going through the process together, my question was is in neither or because they seem kind of reluctant. Parking was the big was the big debate. The developer is gonna be allowed to lease about or required, I guess. Required to lease about 220 parking spaces again for 750 beds for people who live in the the unit, those are city parking spaces. Other than that, there's not on-site parking.
Lucas Day:So there's concerns about, residents using the nearby neighborhoods for parking, visitors, illegally parking, things like that. And that was that was the main holdup.
Dustin DuFort Petty:A couple questions, Luke. When Greg originally floated this idea to counsel and to the, commissions, it was a fee in lieu he was proposing to get around the diversity housing requirement. Where did the final approved proposal land on with that? Will there be a fee in lieu, or is the requirement itself looking to change?
Lucas Day:Well, so the way that the fee the fee in lieu is where you pay a fee to get around this requirement that you've gotta put 25% of your unit or 25% of your units in new downtown developments are dedicated to people that are moderate income. We've seen it used on seniors. That's actually the only way the ordinance has been used before for senior housing or owner occupied. What ended up happening was the initial development was 15 stories tall, and then Greg shrunk it down to 12 stories. Greg and Harbor Bay Ventures who's who's the developers that have brought it.
Lucas Day:They they shrunk the development down to 12 stories, and then they met a couple of incentives that the city put out. One of them was meeting some environmental regulatory standards. It's called LEED Platinum. There's you earn a bunch of checkpoints for environmental things you do in your construction and then how the building's gonna operate. And then mass timber, which the city tried to incentivize a couple of years ago, was another one.
Lucas Day:So when they shrunk it down to 12 stories and then when they did these things to meet the city's incentive requirements, they were allowed to build it by right. They called it even though it's really not by right, they still need a site plan approved by the city. But because it was by right, they didn't need a special use permit. The special use permit is what triggered that diverse housing requirement. So because there's no diverse housing requirement because the building's by right, there's no need for a fee in lieu.
Lucas Day:When Greg initially talked to us about this, the amount I think they're offering to pay was like $5,000 a year a unit or a bed. And just compared to other fee in lieu programs that Big 10 universities have, that was a very low bar of the city, put together a kind of a compilation of what like Penn State and Columbus and all all the all the big 10 schools do for their fee in lieu programs and $5,000 were well below what everybody else was doing. And so the city is looking at reworking that and maybe putting a fee in lieu option in place that will be more than what developers had had initially proposed. But, I mean, as it stands right now, what the city got is their these environmental standards, the lead standards that they wanted and they previously incentivized is is the benefit that they're getting, I guess, because even though even though the mass timber, which, again, the city wanted to incentivize helped the developer get that buy right status. They were gonna do a mass timber building anyways.
Lucas Day:That was already part of the plan. So that wasn't something that was new that was added to meet their requirements. So, essentially, the city lost whatever fee in lieu money that Ball Line was offering because the building was built by Wright. There's still not a fee in lieu program in place for the city right now, and there's no diverse housing in this.
Dustin DuFort Petty:How important was Greg himself to this development? He really appeared at so many council and commission meetings. He met with us early in the stages to try to get the word out there. 530 didn't really the 530 Albert development didn't really have that connection with a a personal I don't wanna I don't wanna say celebrity, but, like, a a figure a notable figure who was really pushing for it. What how important was Greg in the process?
Lucas Day:You know, I I mean, it's hard for me to say what what Greg did versus what Harbor Bay Ventures and Mark Bell and Evan Williams, I think, are the two kind of frontmen for that. I mean, Greg understands the city well, and I mean, I don't even wanna criticize that Bailey Street development. I think I thought, you know, kind of from a jump that both of these developments like, you hear a lot of complaints about out of town developers coming in and building things to make money. And I'm not disputing that these guys wanna make money. Like, that's that's the goal of businesses.
Lucas Day:But it was clear that both of these developers understood what the city was asking for, understood the city's goals, and implemented community feedback in these projects. Like like I said, this is the Howard, which is named after Howard Bauhlein, which is Greg Bauhlein's father and is a longtime businessman. Greg's part of the DDA. He pays attention to what's happening in the city. I'd imagine that Harbor Bay, his partner, also paid attention what's going on in the city because these same two groups work together to build the landmark apartments in East Lansing, the landmark in Neumann Lofts.
Lucas Day:So they're familiar with the area. And when you see things like mass timber that's site plan, it tells me that they were paying attention to what the city was looking for because that's something that I think was put in place in 2024 that the city had it as an incentive. Well, it ended up the incentive ended up helping them get that buy right status. They weren't seeking the buy right status to begin with. So I think that was just kind of a part of the project that they knew that the city wanted.
Lucas Day:And so it was included. They think it can be a cool architectural thing. I've heard I I I mean, the MSU's new engineering buildings and mass timber structure, they're kinda cool buildings. Like, it's gonna be different than the other apartments we've got. But, I mean, like, the one at at the Bailey Street parking lot, that's that's a that's a space that the city again, previous city leaders previous city leaders have said that they wanted to develop.
Lucas Day:It was almost developed a few years ago. I can remember former mayor Ron Bacon had written a letter in support of and then this five story workforce housing project that was proposed there fell through because he changed his mind at at the meeting. Lost three to two. You know, you're one vote away from that already being an apartment right now, when it was voted on three years ago, and he changed his mind. Don't I know if was at the meeting or right before the meeting, but when he was the last vote on that, I certainly thought it was about to pass.
Lucas Day:And so this is a space that the city apparently wants to develop. We've now seen this project, the earlier project, and I understand these developers were meeting with the neighborhood groups early on, a lot of the business owners. They're so the first project that they offered was a 13 story apartment building, which again ran into that exact same issue with the city's diverse housing requirement. They said it's it's not it's not financially possible for them to build this with that requirement there because they were also going to build two stories of public parking that would replace the the the current surface parking lot. And losing those parking spaces is is, again, the number one complaint that you'd heard from business owners and residents.
Lucas Day:They say that they need that parking. You know, you heard John Howard from Flat Black and Circular saying, you know, we've got people coming in picking up heavy things, and they don't wanna go and find the nearest parking parking structure to bring it to. Mike Krueger said that while the analysis is that the city showed was that parking lot's not really utilized very often except for busy days. He said, My employees use it. They don't always Or I saw emails from We got an email from one of his employees, actually.
Lucas Day:Don't know if he said this, but she said that she doesn't feel safe walking after home after one of her shifts, so she needs that parking right behind them, which which makes sense. And Mike had talked about even though the city's analysis didn't show that, you know, this is this parking lot's being heavily used, you know, on on a Wednesday. They make their business on a weekend and game days, and so it'll make a difference when those when those times come around. So, you know, just like I don't think I should be telling the city planners, like, what's a good use of space. I don't think I should be telling these business owners how to run their businesses or what they need to run their businesses.
Lucas Day:But that initial plan did seem to strike that middle ground where the city was going to retain that parking parking lot. It's going to build on a surface parking lot, which, you know, I've just heard urban development people say that surface parking lots are a waste of space.
Dustin DuFort Petty:During the meeting, we saw Bob Metzger drop that bomb. Can you talk a little bit about that? They're gonna lose the parking spaces anyway, aren't they?
Lucas Day:Yeah. So the the part and I should have mentioned that earlier is that the parking space is it's or the parking lot's mostly privately owned. The Metzger Fabian family owns about two thirds of it. And a very frustrated Bob Metzger came to the meeting and said, you know, we offered you this five story workforce housing development. The old mayor changed his vote at the meeting.
Lucas Day:Otherwise, we'd we'd have we'd have this development that we previously proposed. He said, we brought you a proposal with parking. We brought you without parking. It's impossible for me to develop this space that you guys told me to develop. Because according to Bob Metzger, the city said, We're not going to do another long term parking agreement with you.
Lucas Day:You need to find a developer. You need to develop the space. We want this space developed. And so he did. And now these two developers that we've seen go through this process in purse or, you know, through the city's approval process and spent close to a year, I think, on both of these projects.
Lucas Day:And then he said there was actually a third developer that came in, kind of poked around, didn't feel real comfortable with the city's approval process because, again, I think it's important to highlight the city does use subjective criteria to approve these projects. You know, some of the same criteria that was used to reject this Bailey Street, project was parking issue parking concerns, traffic congestion, compatibility with, nearby buildings. You heard those exact same concerns risen about raised by some people about the Howard. I've I've heard that in one of our reporters working on this, heard that Detroit Wing Company actually moved out of, their space at the State News Building because they were concerned about losing business while the Howard was being developed. And and so when you've got the subjective criteria, the the developers are wondering if it's worth the money to pursue the projects.
Lucas Day:We heard from Ms. Bailey Street developer in March that they had spent around $500,000 in pursuit costs of that project. And that was before it got completely redesigned to cut off three stories. So they spent a bunch more money on it by the time it was all said and done. And so you are taking a gamble when you come into the city.
Lucas Day:And so if they're not getting clear indications of what need to be done for a project to get through, it's a risk. And what ended up holding up that initial Bailey Street proposal that had the parking was, again, that that diverse housing requirement. They said we can't afford to build know, spend millions of dollars building you guys two two stories of public parking. And I'm sure there would have been some sort of mechanism for them to make money back over time through a parking agreement with the city, but that wasn't in place yet. And also meet your diverse housing requirement.
Lucas Day:They said if you lower it down to 10%, we think we can, or if you give us a tax break. And the city declined to do those things. And when they did, they, you know, they did something similar to the Howard. They shrunk their project. They met the they put in place those environmental standards that the city had incentivized so they could build it by right to get away around that diverse housing requirement.
Lucas Day:But I think what happened was part of the way that they shrunk it was cutting out two stories of public parking. And that was a cost saving for them too. And that upset the business owners. So you're back to the same problem that the project had a couple of years ago.
Dustin DuFort Petty:You mentioned that there was a developer who took a look at the Bailey project and didn't wanna be involved because of the history of the city. Are we gonna find that same problem with the Evergreen properties, which are again gonna be coming up for sale this this later this year from the DDA. Will it be hard hard to find a buyer if people are afraid to go through a a city government that doesn't always know what it wants? Is that fair to say?
Lucas Day:Well, I mean, it's definitely changing priorities and requirements aren't clear. So a little while back, I talked to Erica Rosebrook, who runs Michigan. She's the director of Michigan State University's four H not four H, MSU's Extension on Local Government Finance and Policy, something like that. She's a local government expert. She's real smart.
Lucas Day:And she said, what I've learned working with developers is you've just got to tell them what answers they're going to get. And, like, I don't think that those answers were always clear to developers just watching this go through. Like, a lot of the times when I'm at these meetings, I know what's going to happen before a vote comes, and I had no idea with either one of these projects what was gonna be approved and what was gonna be denied. And again, the same criteria that was used to deny that Bailey Street parking lot because it's subjective, I think you could apply it to the Howard too. And what Doctor.
Lucas Day:Rosebrook told me is that you don't have to get rid of your subjective criteria for developments. A lot of the times, launch A lot of communities, you can build things if you meet very rigid guidelines because they wanna incentivize developments. And so they say if you do x, y, and z, you're gonna be allowed to build. City council can't reject it. Like, you've just gotta meet our requirements.
Lucas Day:Other cities like East Lansing where there's more draw for developers because of the university across the street, they'll they'll be subjective so that they can kinda steer what they get or decide, you know, features of projects that they do and don't want. And, she said that's fine. Just tell them early on before they've spent all their money, like, what they need to do do to get a project approved. She said there's no magical, complicated construct that gets us to work. It's it's pretty simple.
Lucas Day:You just tell people what they need to do. And I don't know if that was made clear. Like, they were telling them about new parking requirements in June, and that was after these projects have been kicked around for nine months. Like, Evergreen, I would think that the city wants to get rid of because they've already spent millions of dollars on it. This is a property that East Lansing bought in 2009, and they spent about $5,000,000 on it.
Lucas Day:They've already spent that much, I think, on interest payments alone. And there's been several iterations of projects that have been proposed for the space. We saw a it was it was a big office proposal when I was an undergrad actually writing for the state news right before COVID and then COVID hit and nobody needs office space anymore. And then there was another developer, River Catas, who was partner with the city for a while, they kicked around a couple ideas. Eventually they came back with student housing, and the city said they don't want student housing.
Lucas Day:And that was the last one before the city announced that they'd actually sold it. I think that was last year. And then everything got real quiet for several months. And then we found out from the DDA that that had fallen through. And so people I mean, there's challenges with the site.
Lucas Day:It's kind of like an awkward shape. There's environmental contamination on the site. And then and then in the past, we've seen the city try to partner with develop developers on this. So maybe if you're holding their hand, like, it'll it'll help it get through. Of course, it hasn't happened at this point.
Lucas Day:The developers may just need, like, some flexibility to be allowed to develop. Like, they're not going to spend, I think the DEA is looking for, like, $4,000,000 on this property. They're not gonna spend money just, you know, to bring a project to East Lansing for community pride. They're gonna wanna wanna make money for it. And what makes money in the city is student rentals.
Lucas Day:And so, you know, my question after this Bailey Street parking parking lot project fell through is if that gives an opportunity to the Evergreen properties to fill that student housing vacuum that I I believe our developers certainly believe is still there. But who knows? The city's been trying to find, like, condos and owner occupied things for quite a while. So they may try to incentivize that. There's been talks of the city just buying it.
Lucas Day:The city already bought it. There's been talks of the city just doing their own thing there. They brought in a bunch of MSU students a while back, some urban development students who pitched all sorts of different plans, like using it just as a city space was one of them. Then you've got to pay off the rest of your principal payment on it. But who knows?
Lucas Day:Nobody's had luck with it to this point.
Dustin DuFort Petty:You mentioned that Evergreen might become the new focus of student housing since the Bailey Street apartment complex failed. I know you've been looking into the possibility of this enrollment cliff at Michigan State University, whereas there just won't be enough students enrolled at MSU or other colleges throughout throughout the the state. Are we building for students who might not be coming anymore?
Lucas Day:Yeah. And that's one of the questions that mayor Eric Altman asked pretty early in the process is what happens if these buildings are empty. And I think that there's a lot of unpredictability with the enrollment cliff. Like, some communities like Mount Pleasant, which host Central Michigan University have just been, like, really hit hard by population drops because Central Michigan's enrollments, I think, been cut more than in half. Like you have seen a lot of schools get lose students, and it's made an impact on their towns.
Lucas Day:Now having said that, East Lansing has most has been spared from that. Like, Lansing and Ann Arbor have continued to draw students here. The stats that I saw showed that there's been a fluctuation of like a few thousand from ten years ago to now. It's been very steady, the number of students that the university has been bringing in. And the university is still concerned about the possibility of an enrollment cliff.
Lucas Day:And the enrollment cliff is happening for all sorts of reasons. Part of it is just the cost of college is more expensive. Like, is this going if the university seemingly, you know, approves tuition increases every single year without much of a thought of it. Like it's just getting rubber stamped. It's just going to happen.
Lucas Day:So if that keeps happening, is college going to be a rich kids endeavor and not much of an opportunity for others. I mean, it's certainly possible if you're projecting a while out for that. I know the federal cuts are also a concern because that impacts things like financial aid. Having said all of that, I am as concerned as MSU is about this, and I I know MSU is concerned about it. Their admissions director told me, when I spoke with the base is it Bay City that hosts Ferris State?
Lucas Day:This was a while back. Oh. Big Rapids. So I I I talked with the city manager from Big Rapids a while back. Big Rapids is the home of Ferris State University, and you've seen reporting about the enrollment clip at Ferris State hitting Big Rapids, because they've lost a they've lost a fair amount of students too.
Lucas Day:Not not as dramatic as central, but a a good amount. But what he told me is that the news reports that have, talked about the enrollment cliff causing Big Rapids to lose lose its population. He thinks that those are wrong, actually. He thinks that the Big Rapids population decline is because the census was, conducted in 2020 and their students were at home because of COVID. What he said is that he's you know, he was aware that Ferris State had lost students.
Lucas Day:He thinks that those students that had been lost had lived in surrounding communities. He said, when I go around, I don't see fewer people than I did ten years ago. It doesn't seem like it. It seems like, you know, the the developments that are close to campus in Big Rapids are still getting filled up. It It seems like businesses are still able to hire students.
Lucas Day:And so there is that component of, is it not these new developments that they're adding that are going to face issues finding students? Is it the outlaying areas? Is it, you know, Meridian Townships, some of the outskirts on that? Is it like Skyview, those new apartments that Lansing put up ten years ago or whatever that was? Is there always going to be a demand for students to walk to campus?
Lucas Day:Because it's not like the university is gonna go away. Even if it does see a decline in enrollment, there's always gonna be students. If we lose some and how many we we lose, like, that's anybody's guess.
Dustin DuFort Petty:I wanna ask you one more question about the 530 Albert, the Bailey development. Like you said, a few years ago, the vote ended up being two three. Council, did not approve it. This time, it was, one four. Steve Whalen being the only one who voted to, rubber stamp it.
Dustin DuFort Petty:Did Steve talk to you about what his, reasoning was to, support the project?
Lucas Day:Well, I I don't necessarily know that Steve did support the project. Steve didn't vote with the motion to deny. And that could be because I I didn't talk to him after the meeting. It was 01:00 in the morning. I I mean, he could have wanted to delay.
Lucas Day:He could have wanted to approve. He he could have had he could have disagreed with the reasons that were laid out for denying, which were part of the motion. So I I don't necessarily know that he wanted to approve it, but he didn't vote with the motion. Yeah. I'm I'm not I'm not sure why Steve voted that way.
Lucas Day:I'll I'm sure we'll follow-up with him eventually. Oh, I we and we'll follow-up eventually with city council members on if this is still a place the city wants to develop. Again, I think it's really important to note that the city spends a lot of time on things like their comprehensive plan update. They spent a year on that plan, maybe even more than a year. And the plan says that they want to build that the city wants to build dense housing close to campus.
Lucas Day:And you did see one project approved that was dense housing built close to campus, but that was not always you know, it was far from a guarantee. There were a lot just a lot of uncertainties while that was going through. And there I I I just wondered if, developing that parking lot is still a priority for the city, if the city is able to explain, like, what they need to see to approve a project finally because we've seen so many different variations. And, when you make these plans, I I think that there's gotta be more more credence given to them than maybe the people that even speak at the meetings because they take input. Like, the comprehensive plan took input from hundreds of people, and you're just not gonna see that many people that go to the city council meetings.
Lucas Day:And when the developers are using your plans to make you know, to roll out their proposals and things like that. Yeah. I I I I'd be I'd be curious to hear from city leaders on if they've got disagreements with the comp plan, if there's more I'd just like to hear a better explanation for why they denied that Bailey Street parking lot project and if if there's a project that could work through that doesn't have parking or if parking is an absolute necessity. Because again, like I don't want to tell Mike Krueger, the peanut butter owner, peanut barrel owner or the flat black and circular owner or any of the other business owners that spoke that I know better than them about what their business is on. I just think that needs to be made clear by the city that if that parking does need to be, replaced, like, like, they they they should be making that very clear because it does seem like, you know, this is an area that makes sense to develop.
Dustin DuFort Petty:Thank you, Luke, for speaking with us today about the development downtown. Again, that was Luke Day, managing editor of East Lansing Info. We will see you next week for another issue of East Lansing Insider. Have a good week.