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subterranean Jun 21, 2009 2:51 PM

City Center II could advance by fall
By Kate Jacobson
The State News
Published: June 15, 2009

Tonight’s East Lansing City Council agenda includes one item that is familiar to the council and the residents of East Lansing: a request from the City Center II developer for a fourth 90-day extension to finish securing funds for the project.

The $116.4-million project, which has been in the works for almost 10 years, is scheduled to begin in the fall, city officials said.

Because of a bleak economy, Strathmore Development Company, the developer, has experienced difficulties obtaining funds to finance the project. To the dismay of some residents, the plan is moving forward, as city officials hope the final pieces of the project fall into place.

City Center II is supposed to modernize the vacated Citizens Bank building and the 5.5 acres that sit at the corner of Abbot Road and Grand River Avenue.

Originally planned to be a counterpart to City Center I — located on the corner of M.A.C and Grand River avenues — the project has transformed into a multibuilding, mixed-use facility, complete with a preforming arts theater, parking garage and space for residential and retail space, among others. Construction of the parking garage, which is the first part of the project to be built, is slated for spring 2010.

“It took seven years to get the land all together, but this is not unusual for downtown developments like this,” said Jim van Ravensway, director of East Lansing’s Department of Planning and Community Development.

Finding finances

The $112-million funding the developer needs for the project should be completed in the next 90 days, Strathmore President Scott Chappelle said.

The financing comes from cash equity from the buildings’ existing owners, traditional bank financing, mezzanine financing, tax-increment financing and Michigan business tax credits. The rest of the almost $5 million in financing will come from the city.

Chappelle said he has received commitments for the $112 million. However, a portion of the commitments are in the form of equity participation, a relatively expensive option to finance real estate projects. He’s currently trying to obtain cheaper funding options for $54 million of the money he needs.

Strathmore is pursuing $28 million in financing backed by either a loan from the U.S. Department of Housing and Urban Development or lender Freddie Mac, Chappelle said. He is looking to garner another $26 million in financing with New Markets Tax Credit Program, part of the U.S. Department of Treasury, and traditional bank financing.

Because of the frozen credit markets, Chappelle has had some difficulties securing those funds.

Problematic projects

Two of Strathmore’s other developments have resulted in somewhat messy results.

A project in Bear Creek, Mich., resulted in a legal dispute with the township about the approval process for the development.

“Bear Creek Township acted improperly by not approving our project despite complying with the local ordinance,” Chappelle said in an e-mail. “The project was finally approved by the Michigan Court of Appeals and we are still trying to resolve the issue of damages.”

Bear Creek Towship Supervisor Dennis Keiser could not be reached for comment.

An Ann Arbor project also brought controversy to the company when the city claimed that Strathmore filed documents late, causing a check to bounce and a divide between the developer and the city. The project currently is stalled.

Connie Pulcipher, senior city planner for Ann Arbor, declined to comment. Chappelle said there are no financing options for the project, but the company still plans to pursue it.

East Lansing officials said they are not worried about the company’s track record.

“We have examined all litigation that they’re party to,” City Manager Ted Staton said. “We certainly don’t see anything that would disqualify them for candidacy.”

Construction concerns

The project will bring a big building into a neighborhood where it might not fit, said Ann Nichols, a resident living near the project and a member of the city’s Community Relations Coalition.

After working with the city on the project, Nichols said the voices of the residents were heard, even if their initial wants weren’t addressed by project changes.

“I, and most of my neighbors, I think, have pretty much resigned ourselves to the fact that we fought the good fight,” she said.

“People aren’t thrilled about it, but we have decided that it’s going to happen and we need to be positive about it.”

Phil Bellfy, a resident in the project area and associate professor of writing, rhetoric and American culture, is opposed to the development. When the project was proposed, Bellfy did not like Strathmore’s design and started a petition against the development. It was later submitted to the city.

“They’re changing the character of this community, and it’s bad,” he said.


The city instituted a flexible plan for construction and didn’t hammer down any specific dates. Staton and van Ravensway said they are confident demolition will begin in the fall.

“It’s very feasible to have our project under way by then,” van Ravensway said. “But there are so many things that have to be completed before we’re finally able to get to that point.”

The city and Strathmore have acquired almost all the properties required to build City Center II.

Purchases for the two remaining properties are on track to be completed by the end of the month, Staton said.

He said once the demolition occurs, there is a 30- to 36-month window before construction of the two larger multi-use buildings will be completed, Staton said.

“If you believe in a business cycle, there are 30 to 36 months (before) we could be staring at a whole different economy,” Staton said.

Published on Monday, June 15, 2009

LMich Jun 22, 2009 6:00 AM

I love how they spun news of them asking for a fourth extension as a possible start date for this project. lol I don't have any doubt it will happen, but this is hardly what I would have titled the story, to be honest.


The city instituted a flexible plan for construction and didn’t hammer down any specific dates. Staton and van Ravensway said they are confident demolition will begin in the fall.
Notice that it was Staton and van Ravensway who said this and not the developer. We've heard it all before, and that's just talking about site prep, not even the start of construction.

subterranean Jun 22, 2009 3:25 PM

Agreed. I'm just tired of that site, which could and should be one of the most lively sections of town, continuing to lay vacant and drab. That's supposed to be the grand entrance to the city.

As far as the rendering is concerned, I'm actually quite impressed. I know a lot of things can change in a short period of time, but compared to City Center I, this is a major improvement. The brick boxes that have been going up in E.L. as of late fall incredibly short of anything I would consider inspiring. Not that CC II is incredible or anything, but compared to anything that has been built in Lansing or E.L., it's quite an improvement in my opinion. Now if only the developer of East Village can manage to not Disney-fy the project, we might have the workings of a nice little city on our hands.

DeBaliviere Jun 22, 2009 3:27 PM

So is City Center II way too big as compared to the surrounding structures?

subterranean Jun 22, 2009 7:47 PM


Originally Posted by DeBaliviere (Post 4319709)
So is City Center II way too big as compared to the surrounding structures?

Sure. But E.L. seems to be going in this direction.

LMich Jun 23, 2009 7:08 AM

It's quite oversized, yep. But, downtown East Lansing is ridiculously undersized given the population of East Lansing and MSU. One of East Lansing's biggest failures has been that the city long ago went down a road of trying to stunt the growth of the downtown that looks like a downtown for a city half EL's size.

June 22 - Accident Fund & Boarwalk Construction


East Bank Boardwalk

West Bank Boardwalk

Stretch, with the Michigan State Police Headquarters (u/c) seen down the river...

It seems the entire downtown riverfront is under construction. The new City Market as broken ground, as well, and work is to be started on the Capitol Club Tower (if it's to be believed) sometime in the next few weeks.

UpNorthMI Jun 23, 2009 2:04 PM

LMich, if the state troopers pull out of their lease, is there any demand to fill it with something/someone else. btw, I don't really think they won't move in. I'm guessing its just some lip service by the Gov.

LMich Jun 24, 2009 2:54 AM

It's not lip service by the governor. She's the one that wanted this project. It's the state senate making idle threats. They know that the state house will never quash this, so they are just making a statement.

And, no, no one else could fit the space. It's being built specifically for the needs of the state police, so even if another tenant were found, they'd have to do quite a bit of work work it around a new department.

UpNorthMI Jun 24, 2009 3:07 PM

Oh yeah, your right about the Gov, sorry bout that.

On another note, I drove by Lansing on Sunday (127 South) and was wondering what all those cranes were towards downtown. Thanks for the pics.

LMich Jun 25, 2009 5:06 AM

You could see the cranes from way over on US 127?

BTW, renderings of the new boardwalks

UpNorthMI Jun 25, 2009 2:58 PM

I could see a crane, we were at a standstill and I had time to peek over in that direction without worrying about slamming into the ass end of somebody. But yes, I could see the Capitol dome and what I think is the Light and Power or Water building...don't know for sure.

LMich Jul 9, 2009 3:54 AM

It's finally coming to pass:

GREG DeRuiter/Lansing State Journal

The City Club of Lansing is being torn down today in downtown Lansing to make way for the building of the Capitol Club Tower condos.

City Club razed in downtown Lansing

Melissa Domsic • • July 9, 2009 • From

The former City Club is no more after crews tore down the building in downtown Lansing to make way for a high-rise condominium project.

But it might be some time before the project rises from the rubble. Developer Shawn Elliott's planned Capitol Club Tower - consisting of 12 stories and a mezzanine - is on hold as he waits for financing.

"With the current banking environment, it's still going to be some time before we can get that going," Elliott said Wednesday as the City Club came down. "However, we're trying to make all steps of progress we can make, and this is one of those steps."

Clumps of white-painted bricks fell to the ground and gutters swung from the roof as a backhoe dug through the 1861 riverfront building Wednesday morning. The City Club, at 213 Grand Ave., was closed about six years ago due to problems with its roof, asbestos and the plumbing, electrical and heating systems.

Mayor Virg Bernero remembers attending meetings and dining at the club.

"There's a nostalgic part of me," he said. "Certainly, there are good memories there, but the reality is not every old building can be saved."

The building was so deteriorated that there weren't any historic characteristics to preserve, Elliott said.

The two-story structure should be completely razed by today. It could take up to 10 business days to remove the materials from the site, Elliott said, adding that he'll recycle as much as possible.

Demolition, site work and property abatement will cost about $50,000. Elliott already put about $4.5 million into the $20 million to $25 million project.

This spring, he started improvements expected to cost $300,000 to $400,000 to the South Grand Avenue parking ramp adjacent to the City Club. Elliott purchased the ramp from the city and will offer permit parking.

Another 40 or 50 permit parking spots will be temporarily available at the vacant City Club site until construction starts.

Elliott said he hopes to break ground this year on the condo project if the market stabilizes. The project, initially announced in 2007, was expected to be finished by 2011.

At one point, the developers thought an 18-story tower would be in order. They have since settled on 12 stories.

Between 40 and 60 of the high-end units are reserved for the 80-unit condominium tower, Elliott said. He returned several deposits because of the delay.

Extensive tax incentives will essentially free residents from most local and state taxes for 12 years. Developers also hope to obtain special private sector loan programs for residents.

That could make monthly mortgage payments for a $180,000 to $200,000 unit comparable to rent of $1,100 to $1,200. Condos will range from 700-square-foot, one-bedroom units to penthouses spanning 1,500 square feet or more, Elliott said.

A recent market study concluded the downtown needs at least 75 more condominium units, said Bob Trezise, president and CEO of the Lansing Economic Development Corp.

"Bringing new people to live in the city and to live in the downtown is a critical element to our overall economic development efforts," he said. "It's about jobs and a sense of place."

Capitol Club Tower is one of several development projects downtown.

Work continues on the new headquarters for Accident Fund Insurance Co. of America on Grand Avenue. And a building slated to be the new home for the Michigan State Police is nearing completion at Grand Avenue and Kalamazoo Street.

DeBaliviere Jul 9, 2009 2:16 PM

Good news or bad news? Looks like it was a cool building.

LMich Jul 10, 2009 4:48 AM

Losing a historic building is almost always sad/bad, but in this case, it's at least being replaced by something, and something that will more ably utilize the riverfront.

The building (blt. 1861) was one of the oldest buildings remaining in the immediate downtown core, but had fallen into disrepair after the City Club moved to the suburbs.


BTW, I'm surprised the neighboring Goodrich Building is not being mentioned, as it will also have to come down to make room for the tower:

DeBaliviere Jul 10, 2009 4:38 PM

Thanks for the pics! Can't believe the CITY Club would move to the burbs!

LMich Jul 28, 2009 4:35 AM

The Troppos (upscale restaurant) expansion has begun according to the State Journal:


Construction on Lansing's Troppo underway

Melissa Domsic • • July 27, 2009 • From

An expanded dining room, patio, bar, kitchen and banquet facilities are all part of Troppo’s plans for its new restaurant, now under construction.

Troppo, located in 5,000 square feet at Washington Square and Michigan Avenue, plans to double its space in a new two-story building across Michigan Avenue.

Tavern on the Square, also located on Washington Square, is projected to move into Troppo’s current location. The new Troppo will be located adjacent to the One Michigan Avenue office building.

Construction will take four to six months, said Jason Keusch, executive chef.
Construction was originally slated to start early this year, but was delayed when the project lost some of its bank financing, said Bob Trezise, president and CEO of the Lansing Economic Development Corporation.

Restaurateur Kris Elliott then raised cash from investors for the more than $1 million project, Trezise said. Elliott also owns Tavern on the Square.

The EDC also will loan $440,000 to Troppo for restaurant equipment.
The loan comes from federal dollars granted to the EDC about 20 years ago, Trezise said.

Troppo still has $224,000 to pay on its EDC loan for the current restaurant location.
They’ll pay off half of that upon closing on the new loan next month, then pay the rest in a year, he said.

“We’re building another building in real hard economic times, and that’s the kind of faith the private sector has in the city,” Trezise said. “This is going to show visitors to the state, week in and week out, that something is really happening in Lansing.”
Pictures to jog the memory:



Matthew Dae Smith/For the Lansing State Journal

LMich Aug 3, 2009 4:41 AM

August 2nd

BTW, it seems that the mayor already has a tenant lined up for their current 10-story headquarters on the other side of downtown, though, he's only saying that it'll be 400 employees. That was quick, and it's good that we're not playing a game of 'musical office space'.

One of the weekly alternative papers in the city have labeled the current headquarters the "RoboCop" building:

It's actually an historic building that was both vertically expanded and totally reconstructed.

LMich Aug 9, 2009 5:49 AM

This development, below, is one of two brew pups, downtown, scheduled to reopen, this year:

Rod Sanford/Lansing State Journal

Coming soon: Michigan Brewing Co.'s Lansing location, MBC, will be non-smoking and offer 16 kinds of beer and a full menu. Some beers will come from Webberville, where the company is based, and others will be brewed on site.

Downtown brew pub readies to open doors

Melissa Domsic • • August 8, 2009 • From Lansing State Journal

Michigan Brewing Co.'s downtown Lansing location is nearing an opening date, a year later than expected.

As with several area commercial developments, the company's plans to open a brew pub in August 2008 were delayed by a tight credit market that made financing difficult.

But officials say plans are back on track and the 50-employee site on Washington Square near Kalamazoo Street should open within a few weeks.

"It's been proposed for a while but the economy made it difficult to get the necessary financing," said Ernie St. Pierre, general manager for the company's expansion. "We finally worked it out this spring."

The cost of the project has not been disclosed by the privately owned company.

Michigan Brewing Co., based in Webberville, opened in 1995. Its 76,000-square-foot headquarters includes a brewery, pub, tasting room, distillery, winery and store that caters to home brewers and wine makers. Its beer is distributed in 10 states and Sweden.

The company also recently started brewing musician Kid Rock's American Badass Beer line.

Crews are putting the final touches on the Lansing location, MBC, at 402 S. Washington Square.

The 4,000 square-foot facility formerly housed the Greenhouse Bistro, but has been mostly vacant for a couple of years, St. Pierre said.

The pub will be non-smoking and feature 16 kinds of beer and a full menu.

Some beers will come from the Webberville location, and others will be brewed on site, St. Pierre said. The company has finished hiring about 50 mostly part-time employees for the new spot.

"We feel it's kind of a real opportune location," he said.

St. Pierre hopes to draw customers from Cooley Law School and the proposed Michigan State Police headquarters at Grand Avenue and Kalamazoo Street.

The brew pub isn't the only business hoping to cash in on the state police building, which could bring 560 workers downtown if the move is approved.

A Chinese restaurant is slated to open next to the pub at the former site of the Petit Cafe, 400 S. Washington Square.

The state police headquarters is the draw for the new restaurant, said Bob Trezise, president and CEO of the Lansing Economic Development Corp.

"To me, it's another testament to how valuable having those state troopers coming downtown as an economic multiplier effect," he said.

The property owner, Sui-Wah Chan of Ann Arbor, could not be reached for comment.

Al Maywood looks forward to the renewed activity on his block. Maywood owns the Downtown Smoking Club at 406 S. Washington Square.

"It's a good thing to come down to this area," he said.

After all, he said, cigars go with beer.

subterranean Aug 27, 2009 5:39 PM

They are taking out the windows on the Accident Fund, and yesterday I saw them tearing down parking structure over Grand Ave. I'll try to get some pictures this afternoon.

Rizzo Aug 27, 2009 9:12 PM

Here's two from yesterday

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