Documents Released Highlight Decision to Redevelop Bailey Street Parking Lot – East Lansing Information

In the heated public debate over the proposal to redevelop the privately owned portion of the downtown Bailey Street parking lot (Lot 11), critics of the proposal have taken to tasking the Metzger/Fabian family, which owns the land. Some suggested the family should continue to let the city of East Lansing lease the land for parking, because it benefits nearby businesses, rather than pursue a redevelopment deal.

The Metzger/Fabian land — which includes the western two-thirds of Lot 11 — is currently under a sales agreement with American Community Developers (ACD). The developer has proposed building a five-story “workforce housing” apartment building on the site, known as 530 Albert Ave.

This presentation was submitted by ACD to the Planning Commission. It’s annotated by ELi using labels to help readers orient themselves.

Now, internal communications released by the city to ELi under the Freedom of Information Act (FOIA) confirm what the Metzger/Fabian family’s attorney told the Downtown Development Authority in August — namely, that in mid-2022, city representatives “expressed interest” in order to develop the lot “

Then-Planning, Construction and Development Director Tom Fehrenbach informed the family that the city would refuse to enter into another long-term lease to use the land for public parking. He copied then-City Manager George Lahanas in communications.

“We are still seeing very low overall occupancy of our parking system,” Fehrenbach explained, writing to the Metzger-Fabian Parking Lot 11 Alliance on July 15, 2022. “Although, from a parking occupancy standpoint, we have recovered to some extent.” “Given the pandemic, our long-term trend of declining overall occupancy suggests we are overpriced for parking. Therefore, the city has significant additional parking available to meet future demands on the system as new businesses emerge for the foreseeable future.”

According to Fehrenbach, the city cannot continue to take the financial hit on “costly private space for our parking operation, while a significant portion of our parking system on city property is underutilized.”

Director of Planning, Construction and Development Tom Fernbach (ELi file photo

Fernbach said he wanted to make sure the family understood “that our long-term intention would be to cancel the lease and reconfigure the lot” to offer paid parking “on city property only,” in the eastern third of the city. a lot.

The city offered only a short-term lease that would bring the family significantly less money than a previous lease, according to a letter from the family dated Aug. 12, 2022.

The letter states that in 2021, at the height of the coronavirus, when downtown parking was dramatically reduced, the family was earning about $120,000 a year from parking. This was “significantly less than the ‘market rent’ rental payments compared to the current value of the land.”

By mid-2022, even though many motorists were returning downtown, Fernbach was offering the family just $100,000 a year for the plot of land.

The family rejected the offer. But Fernbach advised the council on Aug. 16, 2022, to continue with the $100,000-per-year offer. The council accepted this advice by a 4-0 vote. The city’s firm stance on the parcel led the family to seek redevelopment.

On September 27, Bob Metzger wrote to Fehrenbach that he looked forward to working “with you/your development team to collaborate on the long-term future of the property on Albert Street and how we can move forward with planning for the next property.” Best use.

“We realize that the recently concluded one-year lease will not be renewed and we need to move on with life after the car park. With all the exciting development projects that have taken place at EL in recent years, we believe there is huge potential for Albert Street. We would like to To learn more about the city’s vision for downtown and the 500 block and ask for your help in identifying potential development groups that might be interested in our parcel.

Family members and city staff then met, and on October 19, Bob Metzger wrote to Fehrenbach “to share my appreciation for meeting with the Metzger/Fabian families last week.” He said the family “looks forward to collaborating with the city on the best use of the parking lot development.”

“We’re starting to set our sights and I think there’s already some awareness among the development community that the package is in the works (which I’m sure you’re aware developers are gossiping about).”

In May, ELi broke the news that ACD was submitting a proposal for on-the-ground workforce housing. Subsequent investigative reports showed that ACD pushed the city to submit a letter of support for its request for state support for the project and that Mayor Ron Bacon signed a letter before announcing the proposal, without consulting with the rest of the council.

A rendering of the building that American Community developers envisioned for what is now much of the Bailey car park along Albert Street. This is shown looking south-west from Albert Street.

A recent study of parking in downtown East Lansing showed that the system remains largely underutilized, with the Charles Street and Division Street ramps experiencing particularly low occupancy. This was true even before the pandemic. (See ELi’s previous reports on this matter in 2019 and 2018.)

The ACD project, if built, would involve leasing approximately 115 parking spaces at a discounted rate to tenants on the Division Street ramp. Lot 11, which currently contains a total of 121 spaces, will be reduced by a total of approximately 90 spaces through this development.

The city and developer also anticipate that during construction, the city’s portion of the parcel will be closed for more than a year to be used as a staging site for construction.

Owners and managers of businesses in the area said they would lose many customers and may be forced to close if Lot 11 stopped providing the current level of parking.

Recent analysis of city center parking conducted by expert consultants indicated that approximately 86% of public city center parking is currently in garages. Only 14% are on the streets or on lots, which is a low percentage compared to other cities. If this project is built, this number will drop to 11%.

At the Aug. 23 Planning Commission meeting, ACD Vice President Chris Young told the assembled business representatives: “I realize (the parking lot) is the lifeline of your business.” But he added: “We believe that affordable housing should be a human right for people.”

Chris Young, vice president of American Community Developers (ACD), talks about the 530 Albert Ave. project. Before the Planning Commission on Wednesday, August 23, 2023. Young spoke the next day at the Downtown Development Authority. (Dylan Leese for Ellie)

Young expressed the developers’ understanding that this parking lot “will disappear” regardless of whether this development is approved or not.

If constructed, the project will provide 122 apartments to house individuals or families with incomes between 40% and 80% of the area median income. This currently equates to an annual income of $30,000 to $80,000.

Federal and state financial assistance for the project will strictly limit the amount of rent that can be charged and these restrictions will remain in place for a minimum of 30 years.

The U.S. Department of Housing and Urban Development (HUD) will regulate rentals. Based on current rates set by HUD, a renter earning about $30,000 per year (40% AMI) would pay at most $656 for a studio apartment, $703 for a one-bedroom unit and $844 for a two-bedroom unit. These rents include electricity (including heating and cooling), water, sewer, and trash costs.

Students will not be permitted to rent under federal regulations that allow public funding for this project. A “student” is defined as anyone enrolled in a fifth semester within the last 12 months, including graduate students. These rules, established by Congress, only provide exceptions for students with dependents of parents who are primary tenants and pregnant students, Young explained.

In August, a majority of the Planning and Development Affairs Committee supported the project proposal.

The proposal now moves to the City Council for final say with a public hearing scheduled for October 3. See all ELi reports about the 530 Albert Ave project. here.

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