As Big MSUFCU Project Proceeds, What Does the Owner of Dublin Square Say Now?

With the new Michigan State University Federal Credit Union office building in downtown East Lansing now expected to be completed in June 2023, so far the building under construction on Abbot Road generally matches the renderings MSUFCU presented during the approval process. Yes, that includes that seven-story brick wall facing the Dublin Square pub next door. 

So, what hasn’t turned out to match what was pitched during the approval process? And what does the owner of Dublin Square – who delayed the project’s start to protest construction plans – have to say now?

In a twist, Paul Vlahakis tells ELi construction has gone well, all things considered.

ELi reported in November 2020 that a protracted dispute between Paul Vlahakis, real estate developer and owner of the Dublin Square property across the street from City Hall, was holding up commencement of the MSUFCU project. 

Vlahakis said he was concerned about how construction would impact his business. But in April 2021, the credit union’s President and CEO April Clobes brought a different take, telling ELi Vlahakis had wanted a joint redevelopment deal including his property in exchange for allowing construction to proceed through an easement.  

By last fall, the work had finally started, following some changes in plans. The credit union pulled the building back three feet from the north-side property line shared with Dublin Square, allowing space for construction workers to operate generally within the credit union’s property. 

East Lansing’s Downtown Development Authority also demolished a series of publicly-owned buildings to give the credit union a much bigger construction site through a short-term land-lease deal. 

And, after all the tension, Vlahakis now tells ELi the experience has been pretty positive. 

In response to an email request for comment, Vlahakis wrote, “To this point[,] they have done a great job with their development and have been very respectful of our business and property.”

He said that, early on, there were issues with dust, debris and vibrations. “But any issue we had, MSUFCU and Granger [the construction company on the job] responded to and corrected soon after we brought [it] to their attention,” Vlahakis said.

Vlahakis also praised City staff members Adam Cummins and Heather Pope for doing “a great job facilitating several meetings to resolve early construction issues as well.”

Dublin Square has been a happening night spot lately even with the ongoing construction. Vlahakis said this is because his team “continue[s] to work very hard to respond to the needs of our customer base and try to provide a safe location for students and residents to frequent.” 

Vlahakis said he’s been very happy with the recent offerings at the bar and the positive response from patrons.

“We will continue to do our best to provide a great option in East Lansing for food as well as night life,” he wrote. “We recently hired a new chef and will be adding new menu items and bringing back some old favorites for both lunch and dinner and will be further utilizing our great event space for parties this year.”  

What about the lane and sidewalk closures around the site? 

Again, Vlahakis said it has been handled “very well, in my opinion. In fact, the closures seem to slow down the traffic and make the corner much safer for pedestrians.”

“All in all,” Vlahakis said, “I am happy that MSUFCU continues to invest in our community, although the wall several feet from my patio blocks views and sunlight, it at least is as aesthetically pleasing as you can make a brick wall.”

Yes, that wall was part of the public approval process. But the large construction site was not.

In August 2020, the Planning Commission voted 6-1 to recommend approval by City Council of the project proposal, with the commissioner who voted against saying it was just too much building for such a small piece of land. 

The City Council followed with unanimous approval a month later. The renderings presented then included that seven-story brick wall facing north.

The reason for that windowless wall was simple: The expectation was that the Dublin Square property would eventually be redeveloped with a tall building. So, it made no sense, given that the MSUFCU and future Dublin Square structures were expected to come all the way to the property line, to build anything other than a solid surface. (No point in windows that would eventually meet a wall.)

After the redesign pulled back three feet from the line to try to accommodate Vlahakis’ objections to the construction plan, the plan for the north-side brick wall remained. Doing otherwise would have required substantial redesign, which would be costly and time-consuming and would have still left the potential for windows facing a wall just a few feet away if the neighboring property were redeveloped with a tall building. 

The wall looks as it was rendered for the public, except for a narrow added space between the building and the Dublin Square porch.

That said, at the time of the public approval process for the project, there was no hint the construction site would sprawl to become what it has. Plans then showed only a one-lane closure on Abbot Road and one-lane closure on Albert Avenue wrapped around the west and south sides of the site for construction. 

Now, the project has taken over a large chunk of publicly-owned property on Evergreen Avenue and has involved a months’ long total closure of Albert Avenue just west of Abbot Road. 

Asked to explain the greatly expanded construction zone, MSUFCU’s CEO Clobes said by email, “All closures have been implemented in effort to protect our community members from construction activities, and all closures have been reviewed and approved by the City of East Lansing to date.”

She said the eastbound lane of Albert is back open and will remain open, and that the change in plan on Albert Avenue “was implemented to account for the new traffic signals, which were installed at Albert and Abbot, which caused us some changes to our crane position and lifting plan to avoid the new obstacles. When this plan was proposed to the city we had ensured that the additional lane closure would be installed while the Albert EL Fresco is in place,” to coordinate closures in the area.

According to Clobes, Granger and the credit union “have also offered bi-weekly meetings with neighbors and have developed good working relationships to work with our neighbors,” a claim supported by Vlahakis’ remarks.

What is the new project expected to bring?

The credit union will relocate its downtown branch from next to Peanut Barrel in the 500 block of Grand River Avenue to the ground floor space in the new building and will populate several of the upper floors with credit union back-office workers. According to Clobes, marketing will start in the fall to seek tenants for the unused space on the ground floor and above.

The second floor will include a community space for meetings and events, available by permission of the credit union.

The hope is the building will add key demographic users to downtown, including office workers who might then shop, dine and live downtown at rates not before seen. Community members drawn to events on the second floor might also add shoppers and diners to downtown.

At the celebration of the groundbreaking in July 2021, Peter Dewan, outgoing Chair of the DDA, told those present, “MSUFCU’s project is clearly helping the City of East Lansing achieve its dreams for an attractive, vibrant, successful downtown.”

Relatively controversial among downtown business owners, the project eliminated downtown Lot 4 (the parking lot that had been next to Dublin Square) and has  no onsite parking and no dedicated drop-off/pick-up lane. The expectation had been that building users coming by car would park in the newer Albert Avenue ramp or the older Grove Street ramp on the other side of Abbot Road. 

Since the end of pandemic shut-downs, both of those ramps have seen substantial increases in use. Meanwhile, Lot 15 (across from City Hall) has been leased to the Graduate Hotel for valet parking per a prior agreement with the hotel’s developer. Even with the valet parking nearby, the line at the Graduate Hotel has been snaking around the block across the street from the construction site.

Downtown parking is likely to get tighter when the MSUFCU project opens. Some non-motorized transportation advocates watching the situation tell ELi they hope the increased challenges of driving and parking downtown will lead to more people walking, biking, and using buses and scooters instead of cars.

What about tax benefits?

When the land sale for the MSUFCU site was approved by voters in March 2020, City Manager George Lahanas noted the project would bring an increase in property and income taxes to the City. But how much remains to be seen. 

If workers are simply relocated from other East Lansing locations, there will be no net increase in City income taxes. Still, increased spending downtown could have a positive economic effect. And the hope is it will lead to more office usage downtown. (The last time an office tower was built in downtown East Lansing was about 35 years ago, when University Place was built. That’s the Marriott Hotel complex near Ann Street Plaza.)

As for property taxes, because the new MSUFCU building falls in a special economic tax-capture region, over $200,000 in new property tax revenue generated by this project – money that would otherwise go to the City of East Lansing, Lansing Community College and CATA – will instead go to East Lansing’s Downtown Development Authority. 

For perspective on what a boost that will represent to the DDA’s income, this fiscal year, the City expects the total of taxes captured and redirected to the DDA to come to just under $1 million for the whole area.

The taxes captured by the DDA from the MSUFCU project will help the DDA make up for the loss of income experienced in the destruction of income-producing buildings involved in providing MSUFCU the additional construction site space along Evergreen Avenue.

Last week, the DDA voted on measures related to demolition of the last two of the DDA’s income-producing rental buildings along Evergreen Avenue. The public debt owed on those properties plus two other adjacent properties still stands at about $5.1 million, roughly the same as what the DDA owed at the outset of the debt when the properties were purchased for redevelopment in 2009. That’s because the DDA has only been paying interest on the debt. 

There’s no active redevelopment project in the works for the DDA properties, and the income from the MSUFCU project won’t make it possible for the DDA to pay off the debt. The City Planning Department and DDA expect that debt will have to be refinanced by 2025 based on presentations at last week’s DDA meeting.

Correction note (Sept. 2, 2022): The original article stated that the University Place complex with the Marriott Hotel was built 40 years ago. We corrected this to indicate it was built about 35 years ago. ELi thanks the reader who sent in this correction.