Council Waffles Over What to Do About Newman Lofts

East Lansing’s City Council broadly instructed City Staff on Tuesday night to continue delaying enforcement against developers Harbor Bay and Ballein Management (HB BM) for zoning violations stemming from the renting of three apartments in Newman Lofts to people under the age of 55. 

City staff informed Council that they have sent a proposal to the developers — a proposal City Attorney Mike Homier said at Council’s meeting that he hasn’t yet seen. Homier said he is scheduled to meet with the developers’ lawyers on Wednesday morning (Feb. 10). 

As of publication, the three sets of under-age-55 tenants remain residents of Newman Lofts. Both Homier and several members of Council stated on Tuesday that their ultimate goal in this matter is to get HB BM to comply with the law and the Master Development Agreement made between HB BM and the City for the project.

Council did not vote directly on the matter, but after the group — which included Homier, Director of Planning Tom Fehrenbach, and City Manager George Lahanas  — discussed the situation at length, Mayor Aaron Stephens asked each member of Council what they wished to see happen. 

Homier told Council that he expected to know more about what might come of his negotiations with the developers at the next full City Council meeting in two weeks (Feb. 23), at which point they may take a more substantial action. 

Tuesday’s discussion comes three months after Council voted 4-1 in November to delay for 60 days enforcement for the violations. The violations had been revealed to them by Harbor Bay’s representatives two months earlier, during a September meeting, at public comment. 

The stated goal in November had been to reach a “mutual agreement” with the developers over who is actually allowed to live in Newman Lofts. City law, the Master Development Agreement, and the current City Attorney all say it’s just people over 55, but the developers have challenged that, at least in the past.

Council member Lisa Babcock, the lone dissenting vote to November’s delay of enforcement, said on Tuesday night that she preferred to go forward with levying the appropriate fines for the zoning violations ($100 a day per each day a violation occurred, each illegally-rented unit representing a separate violation).

When Babcock cited the specific portion of the zoning code outlining the punishment options — Sec. 50-33 (b) — Homier could be seen taking notes.

It’s unclear exactly when each of the three under-55 tenants signed their year-long leases, but HB BM has indicated the leases end in “Summer 2021.” That being the case, at least in theory the City could at this point levy more than $60,000 in fines against HB BM.

“We are on the cusp of treating small landlords very differently than this one, large entity,” Babcock said. She referred to cases where small landlords had received notices of fines and threats of arrest, including “the driveway case.”

In response, Stephens and Mayor Pro Tem Jessy Gregg said they welcomed a new, less stringent approach to zoning violations than previous Councils.

On the issue of Newman Lofts, Council member Ron Bacon said he was fine delaying enforcement until the three tenants moved out, indicating he was comfortable with those tenants being allowed to stay in Newman Lofts beyond the terms of their current lease until they left “naturally.” 

Bacon did say he wants some trigger for acting on enforcement, so the specter of fines is present in negotiations. But, he said, he didn’t want to do something that would potentially force people to move in winter during a pandemic.

Dana Watson also agreed with delaying enforcement, saying that she was already under the impression the November vote indicated as much. She did say that she expects the three tenants to not be allowed to stay beyond the terms of their current leases, noting that people in public housing are forced to move on short notice for various reasons, like their income going up. 

Gregg, the self-described “pushover” of the group, was fine delaying any enforcement until the tenants decide to move, similar to Bacon’s stance. Her rationale was that these people moved to East Lansing in good faith, not intending to rent illegally. 

It’s also become evident to Gregg and others that the three under-55 tenants are not college students. Gregg suggested she would be in favor of  taking enforcement action if the tenants were students, arguing that the current tenants do meet the general spirit of the zoning code provision aiming to create diversified, non-student housing downtown. 

Gregg, along with Stephens, agreed with Bacon about not wanting to take a role in possibly causing people to be forced out. 

Lastly, Stephens spoke to what he hoped would happen. He said he wanted this situation clarified, speaking mainly to Homier at this point. 

Homier explained on Tuesday that the goal of his negotiation with the developers’ lawyers will be to create an amendment to the Master Development Agreement that would clarify who is allowed to live at Newman Lofts — people over 55 — and remedy the situation involving the three current under-55 tenants. He explained that there may not ultimately be a proposal both parties agree to. 

Fehrenbach and Homier assured Council that the developers have backed off their stance that they can, in fact, rent to a limited number of people under 55 at Newman Lofts.

Stephens said that if some sort of agreement couldn’t be reached, then enforcement would be necessary. He also asked Homier to look into the different forms enforcement could take. Watson had also asked earlier in the meeting what enforcement might entail.

While action on the Newman Lofts violations could come sooner, potentially before the end of the month, depending on Homier’s meeting, Council seems willing — with the exception of Babcock — to wait until the leases expire this summer to take any direct action against the developers. 

“Whenever we come back as a Council, we’ll have a little more educated discussion about this,” Stephens said.

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