City Council Firmly Opposed to Developers’ Ask on Newman Lofts

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Alice Dreger for ELi

Bob Trezise of LEAP (Lansing Economic Area Partnership) and Mark Bell of Harbor Bay Real Estate at the celebration of the project in May 2018. In the background is the construction site where the parking garage and Newman Lofts would rise.

All five members of East Lansing’s City Council tell ELi they are unequivocally against removing the age restriction on the Center City District senior rental apartments, a change that would allow the units to be rented by anyone, including students.

ELi broke the story yesterday that members of the team that developed the Center City District project have been asking City leaders about the possibility of their being allowed to remove the age restriction on Newman Lofts that now requires residents be age 55 or older.

As we reported yesterday, the developers, Illinois-based Harbor Bay Real Estate and local Ballein Management, have had trouble renting the 92 apartments in Newman Lofts. They’ve had no trouble renting to students in the unrestricted Landmark building on Grand River Avenue, also built as part of the project.

Responding to a request for comment, Mayor Ruth Beier told ELi yesterday, “As long as I am Mayor I will do everything in my power to stop this from happening. This is not what we negotiated, agreed to, and memorialized in the development agreement and Brownfield [tax increment financing] plan.”

Beier says Mark Bell of Harbor Bay already knows where she stands: “Three weeks ago I let him know that I would oppose [age-unrestricted] market rate housing on our signature development in the downtown.”

At the May 2018 celebration of the project, Harbor Bay’s Mark Bell speaks with Steve Willobee. At the time, Willobee worked for the LEAP and was a vocal advocate for the project, arguing it was “transformative” and in the public’s interest to help fund with a $58 million tax incentive plan. Shortly after the deal was signed, Willobee took a job working for Bell at Harbor Bay Real Estate.

The Center City District deal was supported by a $58 million tax increment financing deal – mostly used to pay for the new parking garage – and was predicated on an East Lansing law that requires developers dedicate at least 25% of units in a big downtown housing project to something other than student-attracting apartments.

That zoning law, called Ordinance 1384, gives developers three options for how to satisfy the 25% requirement: build housing for people aged 55 and up, and/or owner-occupied condo units, and/or housing for people earning low-to-moderate incomes.

Council member Mark Meadows was Mayor when the idea of the deal was first announced in February 2017 in an extraordinary press conference. Asked yesterday for a comment on the request from the developers to convert Newman Lofts, Meadows declared he is “in complete opposition to that.”

Gary Caldwell for ELi

Newman Lofts, above the parking garage built as part of the project (photo by Gary Caldwell for ELi)

Said Meadows, “They would immediately be in violation of the 25% rule and we would have to revoke the [Certificate of Occupancy] for the Grand River portion of the project. If they are having trouble filling them up, then they need to lower rents and begin to more aggressively market them.”

Meadows concluded, “In any event, if they make an ask like that, I want their books audited.”

Mayor Pro Tem Aaron Stephens was not on Council when the deal was made and the site plan approved, but agrees with Meadows that the developers need to do more to try to fill Newman Lofts with the target population.

“What steps were taken to fill these units? Were lower rents offered? What was the initial interest (because often there were claims in the beginning of a lot of interest before the site was completed) and how did that translate to actual [rentals]?” asked Stephens.

Stephens said that when he was campaigning in 2017, many people doubted Newman Lofts would work for seniors given that it was built right next to student housing and above noisy downtown bars.

Council member Lisa Babcock, elected as a challenger candidate in November 2019, also said she does not understand why the senior housing was built there, rather than facing the quieter vista of campus. She added that the interior design raises questions.

“I’ve heard from several seniors who were surprised and disappointed by the lack of design features that help as you age, such as door handles with levers, rather than knobs. As a 53-year-old, I definitely find those features helpful, even if they’re not necessary for me yet. Omitting them seems like an bad choice, whether they were required or not.” 

As we reported yesterday, the developers elected not to use universal design – a disability-accommodating architectural approach – in building Newman Lofts, and the City’s zoning code accidentally left out the requirement for universal design in this project.

Council member Jessy Gregg, also elected as a challenger last year, told ELi yesterday, “It seems awfully soon to expect a change this dramatic. It hasn’t even been a year since Newman opened for occupation.” (In fact, it’s only been about six months.)

Gregg continued, “Although I was not on council when this deal was struck, it’s my feeling that Harbor Bay/Ballein Management would not have been given the right to develop their student-focused Landmark building without honoring the diversity-in-housing clause” in East Lansing’s zoning code.

“They chose the option of 55+ housing,” said Gregg, “and I don’t think there was any confusion over the expectation that Newman Lofts would be dedicated to senior housing in perpetuity.”

The current Mayor and Mayor Pro Tem, at least, are open to the possibility of some other kind of conversion.

Stephens said he would ask the developers, “Could owner occupied units work here instead?”

Said Beier, “The developer has many options that I will consider, such as a long-term lease agreement with Michigan State University to house visiting staff, converting some units to condos, converting some units to office, and converting some units to low-to-moderate income housing in the building.”

Such changes would require changing the development agreement. If a change resulted in uses outside of the three options for diverse housing in Ordinance 1384 – the law meant to diversify the downtown resident population with the goal of ultimately changing downtown – that Ordinance would also need to be amended or repealed.

Related: Center City Developers Want to Convert Senior Housing to Allow Student Rentals

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