Development Agreement with PK Tabled, Mash Bar Approved at June 20 Council

A discussion regarding a stalled affordable housing project near Valley Court Drive and Evergreen Avenue gave insight to what Council has learned about making deals with large developers and how agreements will be approached in the future. 

Additionally, Council approved a new bar to be built attached to Jolly Pumpkin and approved several appointees to commissions during the June 20 Council meeting. 

Council did not reach a development agreement with PK Companies for Evergreen properties – yet.

Council tabled a development agreement with PK Companies LLC. However, the decision was made for procedural reasons and does not appear to be a long term roadblock for the company to eventually build affordable housing downtown. 

Council addressed two items related to the Evergreen properties. The first was the development agreement and the second was a first reading of an ordinance that allows PK to make a service charge in lieu of taxes. Because PK’s financial model for the project requires the service charge, City Attorney Anthony Chubb advised Council to keep votes consistent on the two items. 

The ordinance for the payment in lieu of taxes requires readings at two separate Council meetings to pass. Because the second reading won’t happen until the July 11 meeting, Council decided to table the development agreement until that meeting. 

“I don’t like being placed in the position of having to say what I’m going to do on a vote that’s down the line,” Councilmember George Brookover said. “A whole lot of things can happen in three weeks… To me it’s logical to defer this and vote them [both] at the same time.”

Chubb said he believes PK and Convexity could still make the deal work if the development agreement was tabled and voted on at the July 11 meeting. 

If the purchase agreement is eventually approved, Interim Director of Planning, Building and Development Tim Dempsey explained PK will have four years to get a project “up and off the ground.” And if it fails, the city will have the option to purchase the property for $1.5 million. 

The affordable housing project was initially supposed to be built as part of a three-part project by developer Convexity. The developer built the first two parts of the project – The Abbot Apartments and The Graduate Hotel – but did not follow through on the affordable housing component. 

If the development agreement is to eventually go through, Convexity would be freed from the agreement and PK, which is more experienced in building affordable housing, would take over, Dempsey explained. 

Mayor Pro Tem Jessy Gregg said it feels “not great” to let Convexity out of the deal but that bringing affordable housing has been a top priority for Council. She said the situation revealed a flaw in the city’s “25% rule” that requires at least one-fourth of new, big downtown developments be for people with low or moderate income levels, for people age 55 and up, or sold as owner-occupied condo apartments. 

“We have for-profit developers that are using a very different funding model from the overlapping tax credits that need to be lined up in order to have a successful low-income housing [project],” she said. “What bothers me is that Convexity told us they could do it when I think, genuinely, that they probably couldn’t from the beginning because it’s so far out of the way that they fund their other projects.”

Still, Gregg indicated she will set her frustration with Convexity aside and allow the project to be transferred to PK. 

“At the end of the day, what we want is low-income housing and we finally have a developer in front of us that demonstrably can do it,” she said. 

Bacon agreed that watching the process unfold has taught him about the complexities involved with affordable housing projects. He highlighted the importance of the city choosing “compatible” partners in deals to ensure there is follow through on commitments. He also said the city needs to be clear about what it wants from developers and the 25% rule may be setting developers up to lie.

“It’s kind of like a dating app,” he said. “I think we’ve put them in a position to say that they can do certain stuff that they can’t do.”

A development agreement for the deal with Convexity was made in 2018 and predates any current council member. 

The proposed project would create a six-story apartment building with up to 99 housing units, at least 72 of which would be affordable, Dempsey said. “Affordable” means the apartments are available to people making less than 80% of the area median income.

Dempsey clarified restrictions will keep students from living in the building, for the most part. 

Mash Bar, an extension to the Jolly Pumpkin, has been approved.

Council approved a site plan and special use permit allowing BL Mash East Lansing LLC to build a roughly 4,800-foot white box space adjacent to Jolly Pumpkin. The same operators will run both bars/restaurants, which will be connected to one another.

The Mash Bar is pitched as being a more professional setting than the nearby college bars. The special use permit will grant a Class C liquor license for the Mash Bar and Jolly Pumpkin. Dempsey explained the current license allows Jolly Pumpkin to sell its own brewed products. The Class C license allows for other brands to be sold. 

Dempsey said the new bar will have seating for about 150 diners and maximum occupancy of 160 people. There will also be about 20 additional outdoor seats. With a capacity of 396 people between the Mash Bar and Jolly Pumpkin, Brookover asked if there was enough parking.

Dempsey explained when the project was initially approved in 2017, it was determined there was adequate parking. However, at that time the space that will be Mash Bar was classified as general commercial space and not specifically designated to be a restaurant. 

The Mash Bar will only be open to people 21 and over after 11 p.m., which Dempsey said is consistent with bar/restaurant approvals in East Lansing in recent years. 

Ultimately, Council voted 3-1 in favor of approving the site plan and SUP, with Brookover as the lone vote against and Noel Garcia being absent from the meeting. 

Three people were appointed to four commissions on the consent agenda.

The consent agenda was approved without discussion and appointed a few new commissioners, among other actions. 

David Ledebuhr was appointed to both the Downtown Development Authority and Brownfield Redevelopment Authority. Both of those appointments are for partial terms ending June 30, 2024. 

Rebecca Kasen was appointed to serve on the Human Rights Commission. Kasen serves as Executive Director at the Women’s Center of Greater Lansing and recently announced she plans to run for City Council. 

The final approval appointed Brock Howard to serve on the East Lansing-Meridian Water/Sewer Authority Board for a partial term ending Dec. 31, 2024.