Ottawa block powers up
Gene Townsend’s Ottawa Block development grows cooler and grander. And spawns a Neighborhood Enterprise Zone.
Neal McNamara / Lansing City Pulse
When local developer Gene Townsend began talking to Lansing city officials about his Ottawa Block project last year, Mayor Virg Bernero tried to tell Townsend how it should look — because, after all, the mayor would have to sign off on it. Bernero advised that the Ottawa Block plan would have to be grand and really cool, said Townsend said last Friday, retelling the story. Townsend recalled being a little affronted, telling Bernero he would leave it up to experts and market research to determine the scale of the project.
And what did the research show and the experts find? The Ottawa Block project should be grand and cool. The plan for Townsend’s project was announced late last year, and so far, it is not shaping up to be lame or small.
It appears that Townsend’s new urbanism idea for Ottawa Block would significantly change the Genesee/ Downtown/Capitol Complex area. Townsend would build 76 condo miniums on the mostly vacant prop erty, bordered by Butler Boulevard and Ottawa, Ionia and Sycamore streets.
There’s also a planned mixed-use building, with loft-style condominiums above and retail on the ground floor, that would bring water to a residen tial desert, bordered on the south by a big parking lot and even bigger state government buildings. There’s also a planned Neighborhood Enterprise Zone that would encompass every thing between Saginaw Street, Martin Luther King Jr. Boulevard, Walnut Street (with a jog west on Shiawassee Street) and Pine Street. Residents, developers or prospective homebuy ers would be given tax breaks on new residential construction.
The breaks wouldn't apply to commercial prop erty. Townsend unveiled the project late last year amid a drizzle of other developments. Townsend bought the Ottawa land from the Lansing Brownfield Redevelopment Authority, which bought it from the state for $460,000. The state had owned the property for the better part of 50 years, and it at one point had plans to use it for a governor’s mansion, or perhaps offices. The Ottawa deal was closed Jan. 8, with Townsend taking owner ship of the property. The project has an estimated cost of $12 million.
There are nine existing structures, seven of which will stay. Of those nine Townsend owns four, two of which he will keep. The rest are privately owned or owned by the state.
Since the project was announced, plans for Ottawa Block have changed. Townsend is predicting 76 condo miniums, 24 more than originally announced. The first 12 will go up mid block along Ottawa. We could start to see dirt being moved toward the end of the year, Townsend estimated.
One interesting part of the first building is that parking will go beneath it, slightly below street level. According to the Townsend’s plans, you wouldn’t be able to see any cars. Another hinge of the project, liter ally, is the mixed-use building at the corner of Ottawa and Sycamore. In earlier plans for the building, it faces Ottawa Street. But Townsend is con sidering changing the building into an “L” shape, so it would wrap around the corner of Ottawa and Sycamore. There would be 5,000 square feet of retail space, which would be room enough for four stores, with “very dramatic” two-floor lofts above.
“The corner would be anchored bet ter by an L-shaped building,” Townsend said. “More people. More energy.” Also since the beginning of the year, Townsend has received a few “gifts” from the state and local gov ernments for the project. In March, the project was approved for a 20 percent Michigan Business Tax credit, which equals out to about $1.8 million.
The credit is so high, Townsend said, because the project will be Leadership in Energy and Environmental Design (LEED) certified and mixed use. Other factors are that it will increase neigh borhood density and is being built in an “urban core.” That $1.8 million, Townsend said, will be passed on to those who buy his condominiums.
“In this market, you’d be deluding yourself if you think you can keep (the money),” he said. Townsend has also been approved for tax increment financing — a device that captures property taxes — to repay his costs for cleaning up envi ronmental contamination. The TIF will take 18 years to repay Townsend the estimated $1.9 million it will take to clean up the site. The reason the TIF will last so long is the Neighborhood Enterprise Zone, which would give homebuyers a 50 percent break on property taxes (and homeown ers a 50 percent break on the val ue of any major home improve ments).
To qual ify, a homeowner hiring a contractor must make $5,000 worth of improvements; if a homeowner makes the improvements on his own, the value of them must be at least $3,000.
Bob Trezise, head of Lansing’s Economic Development Corp., said that the Ottawa Block has spurred a the new Neighborhood Enterprise Zone and that the city hopes hom eowners, or prospective homeowners, will take advantage of the tax credits to fix up or build new homes. Trezise said the city has had limited success with existing enterprise zones — by last count there are 20 in Lansing, mostly scattered throughout the center of the city, not including this newest one. “For whatever reason, people haven’t been taking advantage” of them, Trezise said. There is a joint Genesee/Downtown neighborhoods meeting scheduled for 7 p.m. Thursday at Grace Lutheran Church to inform residents about the enterprise zone, plus the progress of the Ottawa Block.
One of the last things Townsend has to do for Ottawa Block is market it. He has hired Redhead Design Studio in Old Town to brand the project. The brand, including a new name, could be rolled out as soon as the end of October.
But in the end, the Ottawa Block will bend to the will of the market, Townsend said. He’s not going to build what he can’t sell and what people can’t buy. “It’s silly to predict what the market will call for,” he said.