The DDA will soon hire an executive director, who will focus on carrying out the DDA's work. Up to this point, the DDA has relied on city staff like Community and Economic Development Administrator Heather Pope. (Dylan Lees for ELi)

DDA Zeroes in on Marketing Firm for Evergreen Properties; Revises MOU for Executive Director

The Downtown Development Authority (DDA) is renewing attempts to sell its properties downtown on Evergreen Avenue, as the DDA singled out a firm to market the properties at its Thursday, Aug. 8 meeting. 

The properties, which are near the new MSUFCU building, Valley Court Park and People’s Church, have been owned by the DDA since 2009. 

Multiple members of the DDA indicated they would like Savills, a large, internationally operating firm, to solicit buyers for the Evergreen properties. The company’s Detroit branch responded to the city’s request for marketers, along with one other firm.

Photo showing the location of the DDA’s Evergreen Avenue Properties bordered in yellow. (Dylan Lees for ELi)

Savills proposed a one-year contract that pays 6% of the sale price if the sale is more than $1.5 million or $90,000 for a sale of less than $1.5 million. DDA members had pause about the price tag and agreed to allow City Attorney Anthony Chubb negotiate a contract. It is expected a contract will be before the DDA at its September meeting. Savills indicated it is open to negotiating compensation in its proposal.

DDA members have said that they do not have specific plans for the property and are excited to see the proposals brought by the market. Savills singled out a couple of developments it believes could work in the area in its pitch. 

“Our high-level analysis shows that a multi-family project would be successful here, but we would be open to discussing other ideas such as hospitality or build-to-suit office with the Downtown Development Authority before moving forward,” the proposal reads. 

The city last tried to reach an agreement on a development with River Caddis, but that fell through last year after years of extensions and shifting project proposals. River Caddis initially proposed building office space at the site, but their proposal morphed into student housing after about three years. At that point, the DDA declined to renew an exclusive development agreement with the company.

John McGraw of River Caddis Development at the DDA meeting on Thursday, May 25, 2023. (Gary Caldwell for ELi)

In Savills’ proposal, they list the location downtown, manageable size and public control of the property as strengths. The proposal says that it is helpful that the DDA controls the site because it can be sold to developers with entitlements attached and “shovel ready.”

Their proposal also noted challenges, like the awkward dimensions of the parcel, proximity to recent large developments and potential opposition to development from neighbors. 

Savills was chosen over one other applicant, Catina Willis Realty, a smaller company that offered to do the marketing for a lower rate of 5% of the sale price. 

Selling the properties is a priority for the DDA because each year the bonds used to purchase the properties require more interest payments. The property was purchased in 2009 for more than $5 million. Last year, the DDA refinanced the debt on the properties to avoid financial “catastrophe.” The DDA is funded by East Lansing taxpayers. 

DDA reviews new Memorandum of Understanding for DDA executive director.

At the last City Council meeting, council rejected a proposed Memorandum of Understanding (MOU) between the city and DDA regarding hiring and employment of a new DDA executive director. The DDA executive director is a new position currently being created.

Councilmember Dana Watson was absent from the meeting and Councilmembers Erik Altmann and Mark Meadows raised concerns that the MOU violated the city charter by giving powers to the DDA that should go to the city manager. A motion to have Chubb provide a legal opinion on the matter was made, but it failed in a 2-2 vote, with Altmann and Meadows against. 

East Lansing City Councilmember Mark Meadows at the Tuesday, Nov. 14, 2023, City Council meeting. (Dylan Lees for ELi)

At its Aug. 8 meeting, the DDA discussed a new MOU that tweaked some of the language from the previous version. The DDA didn’t vote on the MOU because the agreement will be before City Council at its next meeting on Aug. 13, before coming back to the DDA to vote on. 

The new MOU states that the executive director “will be selected by the City Manager with the input of the DDA.” The previous MOU said the director will be selected by the DDA but will meet employee eligibility requirements. 

Additionally, there is language in the new MOU to allow the DDA to give the executive director feedback in an annual “360 review.”

Much of the rest of the language in the MOU remains the same as before, including that the DDA will reimburse the city for funds used to employ the executive director, the executive director will receive the same benefits as other director-level city employees and that the DDA will establish the pay rate of the executive director. 

While the DDA did not have an official vote on the MOU, DDA Vice Chair Luke Hackney said a DDA subcommittee does recommend the new version. 

The executive director figures to play an important role for the DDA. Up to this point, the DDA has relied on city provided staff to carry out its work.