The developers of Newman Lofts, the 55+ age-restricted apartments that are part of the Center City District development, confirmed to City Council Tuesday night that four apartment units there are currently being rented by people all under the age of 55.
This violates City zoning law as well as being an apparent violation of the agreement made with the City in 2017 when the Harbor Bay/Ballein Management team obtained the right to use public land for this private development. It also violates the terms of the permit granted by City Council for the building.
The developers came to Council Tuesday night seeking a change in the local law and in the agreements to allow them to rent to people under 55 at Newman Lofts. But it turns out they’re already doing that.
The issue came to light because during public comment, Mary Fielding, a Newman Lofts tenant, informed the Council that Harbor Bay is renting units there to people under the age of 55. She said they were using a federal law, later in discussion identified as the Federal Housing for Older Persons Act, as justification.
When Council member Lisa Babcock followed-up, asking Steve Willobee and Mark Bell of Harbor Bay if there were units being rented with no one over the age of 55 in them, they confirmed Fielding’s report.
Of the 91 units in Newman Lofts, 25 are rented, and 4 of those are now rented to people all under age 55.
“[It is] hard to be asked to change a commitment made to the community, apparently, when you see the other party changed it behind our back,” Babcock said with evident frustration during the Council’s discussion of the situation.
To justify the company’s actions, Willobee cited a line in the Master Development Agreement made between the City and the developer, a line which reads that the units in Newman Lofts “shall be designed to be leased and shall be leased to residential tenants age 55 and older in accordance with the Federal Housing for Older Persons Act.”
Willobee noted that for a project to be defined as 55+ housing under that federal law, “at least 80 percent of the units must have at least one occupant who is 55 years of age or older.” The Harbor Bay team has read that to mean that only 80 percent of the apartments in Newman Lofts must be restricted to people aged 55+.
But whatever the federal law says, the City’s Ordinance 1384, under which the Center City District project was developed, is clearly more restrictive.
Ordinance 1384 clearly states that for big housing projects downtown, at least 25% of the total housing units must be “owner occupied, restricted to residents 55 and older, restricted to low to moderate income housing or restricted to some other occupancy that would add diversity to the area.”
Harbor Bay obtained the right to put in a big student-attracting building along Grand River Ave. (The Landmark) by agreeing to also build the age-restricted 55+ building (Newman Lofts) on Albert Ave.
Of the options allowed by Ordinance 1384, Harbor Bay chose the 55+ restriction.
And, when City Council approved the Site Plan and Special Use Permit for the project in 2017, it specifically listed the approval as requiring “92 apartments reserved for 55 years and older.”
The City can opt to take a number of actions in response to learning of the illegal rentals. It might, for example, withdraw the Certificate of Occupancy for the building, but this would create serious difficulty for the tenants.
The City could also take action on the violation of the City’s zoning code by seeking fines and even jail time, as the City Attorney did when he threatened a man with arrest over an approved driveway. Violations of Ordinance 1384 constitute a misdemeanor which can be punished with fines of up to $100 per offense per day, or up to 90 days in jail.
“Each day that a violation is permitted to exist shall constitute a separate offense,” according to the law. The City has used this law in the past to fine individual landlords thousands of dollars at a time over single units.
Prior to Tuesday’s discussion, Harbor Bay sent two letters to then-Mayor Ruth Beier and Council in April, seeking to find a compromise on the restriction while claiming the problems are all due to Covid-19.
During discussion on Tuesday, it became apparent that now-Mayor Aaron Stephens had intended to have a public discussion with the developers at some point, but that he became irritated after Harbor Bay’s Aug. 27 press conference and letter-writing campaign during which they threatened the City with a lawsuit, wrote to the Newman Lofts tenants suggesting they might want to move out, and launched an attack on East Lansing Info.
Council members seemed stunned to learn that even while Harbor Bay was threatening legal action against the City if the 55+ restriction wasn’t permanently removed, they were apparently already violating that part of local law, their building permit, and their agreement with the City.
Harbor Bay’s tactics didn’t aid their efforts to “have a discussion.”
“I’m never inclined to negotiate with someone threatening to sue me,” Babcock told Bell and Willobee.
Bell’s and Willobee’s answers only seemed to frustrate Council more and more. They were asked but gave what Council members viewed as inadequate answers to whether they have tried to lower the rents or make the building more disability accessible.
Council member Ron Bacon specifically asked about Harbor Bay’s financial situation regarding Newman Lofts, asking what contingencies they had built in for other calamities, like the housing market collapse of the Great Recession.
“Let’s have that discussion,” Bell said, indicating he was willing to share that information in private, at a later date.
Both times when Bacon directly tried to get an answer as to what level of renting would make or break them, Bell and Willobee “went around it,” Bacon said.
“I have no sense of where they are going with the math,” Bacon said.
“[I have] never seen an issue that has so unified my email box,” Babcock said of many community members’ vocal opposition to the request.
Mayor Aaron Stephens drew his decision to not take any action on this item, he said, mostly from the people he represents. Like Babcock, Stephens said he has heard a uniform and resounding “no” from the community on whether they think Harbor Bay should be granted this request.
He’s heard from Newman Lofts tenants like Fielding and the six other citizens who called in to the meeting on Tuesday to specifically say they did not want Harbor Bay to get its wish.
“People have said they want this deal honored. And I hear that from the people, who guide me,” Stephens said. “That’s where I am at, at least for now.”
Update: This article was corrected on Sept. 16 at 8:30 a.m. to clarify that Mary Fielding did not herself identify the specific federal law the developers are using as justification for renting to people below age 55; that law was identified by the developers in the subsequent discussion.
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