Documents Released Shed Light on Decision to Redevelop Bailey St. Parking Lot
In the heated public exchanges over a proposal to redevelop the privately-owned portion of the downtown Bailey Street parking lot (Lot #11), critics of the proposal have taken to task the Metzger/Fabian family who own the land. Some have suggested the family ought to continue to let the City of East Lansing lease the land for parking, because it benefits nearby businesses, rather than pursuing a redevelopment deal.
The Metzger/Fabian land — which comprises the western two-thirds of Lot #11 — is currently under a sale agreement with American Community Developers (ACD). The developer have proposed building a five-story “workforce housing” affordable apartment building at the site, known as 530 Albert Ave.
Now, internal communications released to ELi by the city under the Freedom of Information Act (FOIA) confirm what the Metzger/Fabian family’s lawyer communicated to the Downtown Development Authority in August—namely that, in mid-2022, “city representatives expressed the desire for the lot to be developed.”
Then-Director of Planning, Building & Development Tom Fehrenbach communicated to the family the city would be refusing to enter into another long-term lease to use the land for public parking. He copied then-City Manager George Lahanas on the communications.
Writing to “The Metzger-Fabian Parking Lot 11 Alliance” on July 15, 2022, Fehrenbach explained, “we continue to experience very low overall occupancy of our parking system. Although from a parking occupancy standpoint, we have largely recovered from the pandemic, our long-term trend of low overall occupancy suggests that we are overbuilt in parking. The City, therefore, has significant additional parking available to meet future demands on the system with new businesses coming on line in the foreseeable future.”
According to Fehrenbach, the city could not continue to take a financial hit on “costly private space for our parking operation while a significant portion of our parking system on City property is underutilized.”
Fehrenbach said he wanted to make sure the family understood “that our long term intention would be to cancel the lease and reconfigure the lot” to offer pay-by-space parking “on the City’s property only,” the eastern one-third of the lot.
The city offered only a short-term lease that would net the family much less money than an earlier lease, according to a letter from the family dated Aug. 12, 2022.
The letter states that, in 2021, at the height of COVID-19 when parking downtown dropped precipitously, the family was earning about $120,000 per year from the lot. That was “well below ‘market rent’ lease payments relative to the current value of the land.”
By the middle of 2022, even though many parkers had returned to downtown, Fehrenbach was offering the family only $100,000 per year for the lot.
The family rejected the offer. But Fehrenbach advised Council on Aug. 16, 2022, to stay the course on the $100,000/year offer. Council accepted that advice in a 4-0 vote. The city’s firm stance on the lot led the family to seek redevelopment.
On Sept. 27, Bob Metzger wrote to Fehrenbach that he was looking forward to working “with you/your development team to collaborate on the long-term future of the property on Albert Street and how we can move forward for planning for its next ‘best use.’
“We recognize that the one-year lease that was recently finalized will not be renewed and we need to move forward with life after the parking lot. With all the exciting development projects that have happened in EL in recent years we believe there is huge potential for Albert Street. We’d like to learn more about the city’s vision for the downtown and the 500 block and ask for your help in identifying potential development groups that may be interested in our parcel.”
Members of the family and city staff subsequently met and, on Oct. 19, Bob Metzger wrote Fehrenbach to “share my appreciation for the meeting with the Metzger/Fabian families last week.” He said the family was “looking forward to collaborating with the City on the best use for developing the parking lot.
“We are starting to put out our feelers and I think there is already some awareness among the development community that the parcel is in play (as I’m sure you know, developers are gossips).”
In May, ELi broke the news that ACD was bringing forward a proposal for workforce housing on the land. Subsequent investigative reporting showed ACD had pushed the city to provide a support letter for their application for state support on the project and that Mayor Ron Bacon signed a letter before the proposal was made public, without consultation with the rest of Council.
A recent study of parking in downtown East Lansing showed that the system continues to be significantly underutilized, with the Charles Street and Division Street ramps suffering particularly low occupancy. This was true even before the pandemic. (See ELi’s prior reporting on this from 2019 and 2018.)
ACD’s project, if built, would include the rental of approximately 115 discounted permit-parking spaces for tenants in the Division Street ramp. Lot #11, which currently has a total of 121 spaces, would be reduced by a total of about 90 spots by this development.
The city and developer also anticipate that, during construction, the city’s portion of the lot would be closed for over a year to be used as a construction staging site.
Owners and managers of businesses in the area have said they will lose many customers and potentially have to close if Lot #11 ceases to provide the current level of parking.
The recent analysis of the city’s downtown parking by expert consultants noted that, at present, about 86% of public parking spots downtown are in garages. Only 14% are on the street or in surface lots, which is low compared to other cities. If this project is built, that figure will drop to 11%.
At the Planning Commission meeting on Aug. 23, ACD Vice President Chris Young told the business representatives gathered, “I get that [the parking lot] is a lifeblood for your businesses.” But, he added, “We believe affordable housing should be a human right for people.”
Young has expressed it is the developers’ understanding that this parking lot is “going away” regardless of whether this development is approved.
If built, the project will provide 122 apartments to house individuals or households earning between 40% and 80% of the area median income (AMI). That currently equates to annual incomes of about $30,000 to $80,000.
Federal and state financial assistance for the project would strictly limit how much rent can be charged and those restrictions would remain in place for a minimum of 30 years.
The U.S. Department of Housing and Urban Development (HUD) would regulate the rents. Based on current rates set by HUD, a tenant earning about $30,000 per year (40% AMI) would pay at most $656 for a studio apartment, $703 for a one-bedroom unit and $844 for a two-bedroom unit. Those rents include electricity (including heating and cooling), water and sewer, and garbage costs.
Students would not be allowed to rent under the federal regulations that enable the public funding for this project. “Student” is defined as anyone who is enrolled in classes five of the last 12 months, including graduate students. Young has explained that these rules, set by Congress, provide exceptions only for student-dependents of parents who are the primary tenants and pregnant students.
In August, majorities of both the Planning Commission and the DDA supported the project proposal.
The proposal now moves to City Council for the final say with a public hearing scheduled for Oct. 3. See all of ELi’s reporting on the 530 Albert Ave. project here.
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