City’s Evergreen Avenue Land Deal Will Leave Significant Debt Even After Sale
Last summer, ELi broke details about an agreement the city reached to sell properties on Evergreen Avenue, land that the Downtown Development Authority acquired $5.6 million in debt to purchase, debt that has now been twice refinanced.
Over the course of more than 15 years, the properties have cost the city millions of dollars, a figure that will continue to grow even after the sale becomes official.
The city paid more than three times the value of the four parcels because it had hopes of steering a development in the area, according to previous reporting from East Lansing Info.
In the years since, several plans to develop the area have fallen through.
ELi spoke with East Lansing Community and Economic Development Director Heather Pope and obtained hundreds of pages of financial ledgers to learn how much the properties have cost taxpayers over the 16 years the city has owned the properties.
According to Pope and the documents, the DDA has lost $2,047,889.55 so far, without paying down the debt the city acquired to purchase the properties.
Pope informed ELi that as of June 30, 2025, the outstanding balance was $5,705,160. An interest payment of $107,770.50 was made in September.
Two more payments are due in April – $355,000 on the principal and another $107,770.50 in interest.
The sales agreement the city reached with Landmark Properties and Consulting, LLC is for $3.4 million if the developer builds owner-occupied condominiums and $4.1 million if the development consists of rental units, City Manager Robert Belleman told ELi in September.
In June 2026, the balance will sit at $5,134,620, Pope said. If the property sale goes as planned, the DDA will still be left between $1.7 million and $1 million of debt on the properties.
The documents obtained through the Freedom of Information Act outline 17 fiscal years. In 12 of those years, the city lost money on the properties.
Between 2010 and 2021, the DDA earned an average of $295,000 each year, largely from revenue from five rental homes spread across four parcels.
“The bottom line is that the DDA general fund account balance has been supporting the Evergreen properties,” Pope said,”which they knew would happen based on how long they’ve held them. That was never unexpected. For a number of years, there were rental properties there, and that covered the cost. But then we started tearing down some of those properties and no longer rented them.”
Pope said that the DDA is covering the costs and debts on the Evergreen properties since they stopped renting the homes.
The last time the properties showed more revenue than costs was in the 2017 fiscal year.
In 2021, three of the properties were demolished to allow Granger Construction to use the area for staging for the construction of the MSU Federal Credit Union building at 311 Abbot. The DDA still earns some revenue from this agreement, “but nothing like when you had multiple single-family homes,” Pope said.
In 2022, the DDA stopped renting the remaining two houses.
“We’re estimating that the net income loss for fiscal year 2025 was about $552,425.23,” Pope said. “That includes the debt payments [of $573,122], offset slightly by revenue from Granger Construction [$20,679]. We no longer pay taxes on the properties, but we do maintain them.”
The city has until 2035 to pay off the full debt to its creditor Webster Bank.
Right now, Pope said the city is still working through due diligence on its sale of the properties, a period between an accepted offer and closing on a sale where the buyer gets time to inspect a property, according to Experian. Pope said due diligence should take about six months. ELi has requested an interview with the prospective buyer.