I wonder if they use some sort of number/ scale charts that informs their decisions. It seems quite arbitrary. When they build something in Lansing Township or Grand Rapids is it taking away from Lansing? I see no logic in this. I am hoping the Mayor will work to reverse this poor decision.
It sounds like they have multiple issues with the project. They're talking about him building the pads to sell to others for development, which I hadn't heard. They suggest that the project might not benefit the region, which I disagree with. They also hint that the project may be viable/profitable without their funding.
There's too many unknowns for me to pass much judgement here. I haven't seen all the details of the project, I'm not familiar with MEDC's criteria and I don't know what kind of project they've supported in the past. I guess this one is just wait-and-see at this point.
Looking at it from a distance, we're talking a project with a large student housing component (very highly profitable), two hotels (likely financed, operated and possibly owned by another entity), two senior housing buildings (virtually guaranteed money), some retail and market rate apartments (moderately profitable) and to add to that the county is doing a massive drain project that will benefit the development greatly at little to no direct cost. None of the buildings or public spaces rendered look to be fantastically designed or of particularly high quality so the money certainly isn't going there. Maybe there isn't much justification for MEDC money.
This is state TIF (tax increment financing) we're dealing with if I'm understanding this correctly. And this money isn't for the actual buildings, but for site preperation, infrastructure improvements, soil abatement etc. It would appear that the developers started those activities expecting to be granted the TIF money. The way these things always work is that the state essentially pays for the site prep, and the developers use their money to actually build the projects on the prepared land. Continental Real Estate says in one of the pieces I've linked to that they don't have the money to do both. I don't doubt that.
The MEDC seems to have something out against this project in particular. As you can see by the list of the projects they've allowed the TIF for, they've approved projects both much less worthwhile and cheaper and projects much more expensive. Red Cedar is not out-of-the-ordinary. Unless the paperwork was poor, again, there is really no logical reason for them to reject this one.
TUESDAY, March 23 — Developers of the Red Cedar project have reversed their plans and are continuing construction despite being turned down for state funding.
The developers announced Friday they would halt the project after the Michigan Strategic Fund rejected millions of dollars in tax incentives to help support it. The $274 million project is at the old, formerly city-owned Red Cedar municipal golf course on Michigan Avenue near Frandor.
Christopher Stralkowski, project manager for Continental Ferguson, today announced the construction team will move forward with a “private investment” of $274 million.
He declined to say whether his company would seek additional tax incentives, including the possibility of a third attempt to secure a tax increment financing package on 30 years of eventual property taxes on the site.
The loss of the state TIF money will downsize the project, but it's better that something get built instead of nothing. They can always phase this in, sell certains parts of the land for development, etc.
That is pretty good news considering what was being said just a few days ago! It will be good to get on the other side of the present bizarro world we find ourselves in and perhaps then they will be able to market the part of the site. Maybe someone with bigger and better plans will get involved. I think that they are continuing to build here despite all state funding problems says to me that this is a great location and the developers know they will make money here. Also, I am hoping the continuation of construction breaks the jinx once and for all and we see something nice going up on that spot.
They've had to make changes, of course, so there is now a proposed 11th amendment to the development agreement. It seems the biggest changes include the total elimination of the underground parking structure, and reduction in student housing from 1,100 beds to 792 beds. Everything else is nearly exactly the same as of the previous amendment.
I still can't for the life of me understand who all of the surface parking is for on the southeast part of the lot. It's not really close enough to be for the development. I guess the good thing is that you've still got buildings fronting Michigan and each will have ground floor retail and restaurant space. Also, you have pedestrian/cycle access points from the River Trail and the Brody Complex.
Here's the picture from the agenda showing the sea of parking in the southeast. This really needs to be stopped. When I look at it all I see is leveling of ground for a future building. Is this amount of parking required by code? Can that be reduced? This will essentially become a leased lot for MSU freshmen who the university doesn't allow to park on campus.
I agree. It's exactly what the Frandor area should be moving away from. With all of the land dug up to make the waterways, they could build a second hill to rival Frandor hill.
The LSJ did a story on this, today. Apparently, the extra surface parking is instead of a Phase 2 of student housing. But I'm pretty sure the previous iteration of the project also included a surface parking lot over that way. And, really, why build a parking lot at all if your plan is to eventually develop that plot?
Anyway, this is all to shave $12 million off the cost of the development and help it get through the MEDC who has brought up that they don't want to fund student housing.
Comments
There's too many unknowns for me to pass much judgement here. I haven't seen all the details of the project, I'm not familiar with MEDC's criteria and I don't know what kind of project they've supported in the past. I guess this one is just wait-and-see at this point.
Looking at it from a distance, we're talking a project with a large student housing component (very highly profitable), two hotels (likely financed, operated and possibly owned by another entity), two senior housing buildings (virtually guaranteed money), some retail and market rate apartments (moderately profitable) and to add to that the county is doing a massive drain project that will benefit the development greatly at little to no direct cost. None of the buildings or public spaces rendered look to be fantastically designed or of particularly high quality so the money certainly isn't going there. Maybe there isn't much justification for MEDC money.
https://www.michiganbusiness.org/reports-data/brownfield-tax-increment-financing-projects/
This is state TIF (tax increment financing) we're dealing with if I'm understanding this correctly. And this money isn't for the actual buildings, but for site preperation, infrastructure improvements, soil abatement etc. It would appear that the developers started those activities expecting to be granted the TIF money. The way these things always work is that the state essentially pays for the site prep, and the developers use their money to actually build the projects on the prepared land. Continental Real Estate says in one of the pieces I've linked to that they don't have the money to do both. I don't doubt that.
The MEDC seems to have something out against this project in particular. As you can see by the list of the projects they've allowed the TIF for, they've approved projects both much less worthwhile and cheaper and projects much more expensive. Red Cedar is not out-of-the-ordinary. Unless the paperwork was poor, again, there is really no logical reason for them to reject this one.
Construction back on at rejected Red Cedar development
The loss of the state TIF money will downsize the project, but it's better that something get built instead of nothing. They can always phase this in, sell certains parts of the land for development, etc.
https://www.lansingmi.gov/AgendaCenter/ViewFile/Agenda/_04132020-3044
I still can't for the life of me understand who all of the surface parking is for on the southeast part of the lot. It's not really close enough to be for the development. I guess the good thing is that you've still got buildings fronting Michigan and each will have ground floor retail and restaurant space. Also, you have pedestrian/cycle access points from the River Trail and the Brody Complex.
Anyway, this is all to shave $12 million off the cost of the development and help it get through the MEDC who has brought up that they don't want to fund student housing.