Documents Show Harbor Bay’s Persistent Efforts to Change Deal

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Gary Caldwell for ELi

Newman Lofts, the 55+ age restricted apartments in the Center City District.

Since its inception in 2017, the Center City District has generated a lot of news in East Lansing. So much, in fact, that ELi has compiled a new comprehensive timeline of its coverage of the project.

To better understand more recent happenings on this project — East Lansing’s largest-ever public-private redevelopment — ELi submitted a Freedom of Information Act request to the City of East Lansing for emails between the City Council, the Downtown Development Authority, Brownfield Redevelopment Authority, and the developers of the Center City District since March 15, 2020, roughly the onset of local Covid-19 public health measures.

The totality of the 219 documents obtained by ELi  helps paint a fuller picture of how Harbor Bay Real Estate Advisors — specifically CEO Mark Bell and VP of Government Affairs and Public Relations Steve Willobee — have been lobbying to change the deal.

Below is a timeline of some key events and time periods with notes drawn from the documents.

March 29, 2020: Bell is sent a letter from Timothy S. Bradley of TSB Capital Advisors — a “long-term partner” in the Center City District — that delves into the impacts of Covid-19 on the “capital markets” and commercial real estate. Bradley informs Bell that “immediate effort and steps must be taken” to demonstrate the financial viability of the project for all parties.  

The letter reads, in part: “Understanding the uniqueness related to the financing of your developments, everything must be on the table for reconsideration with all your public and private partners. We understand the complexity related to these discussions in normal circumstances, but as we are all aware, these are not normal circumstances.”

Alice Dreger for ELi

Mark Bell and Steve Willobee at the celebration of the project in May 2018. Willobee worked at the time for LEAP, but now works for Bell.

April 1, 2020: Bell emails then-East Lansing Mayor Ruth Beier. He made no mention of the 55+ restrictions but evidently wanted to discuss measures to help the project with the mayor:

“At your earliest convenience, I kindly request that you, Steve [Willobee] and I jump on a call to discuss Center City District, and the impact COVID-19 is having. I’ve attached a letter, in order to give you context ahead of the call,” Bell wrote to Beier. He sent a letter along the same lines attached to the email.

In his own letter, Bell also referenced and included the letter from TSB Capital Advisors. Beier replied, including City Manager George Lahanas on her answer, instructing Bell to meet virtually with Lahanas and someone from the City’s planning department.

April 2, 2020: Bell meets virtually with Lahanas and Tom Fehrenbach, Director of Planning, Building and Development, according to a later letter Bell sent to Beier.

Raymond Holt for ELi

Then-East Lansing Mayor Ruth Beier at the Feb. 27, 2020, meeting.

April 16, 2020: Bell emails a second letter to Beier, Council, the DDA, and the BRA. He also CC’d numerous downtown business owners. This letter called for leadership from Beier and warned, ominously, of worse economic troubles than the ones already present without the aforementioned leadership.

The letter didn’t make any specific requests. Unlike his email earlier in April, where Bell offered effusive pleasantries, the April 16 version was to the point. Bell’s letter ended by noting “we’re in this fight together.” 

Beier wrote back later that day: “Hello Mr. Bell, Thank you for the letter. Yes, we are certainly all in this together. Ruth.”

June 10, 2020: According to East Lansing’s public meetings disclosure page, then-Mayor Pro Tem Aaron Stephens met with Brendan Ringlever, Patti Tremblay, Dennis Denno, Willobee, and “interested parties” at Foster Coffee Co. and Newman Lofts.

July 2020: While not directly related to this FOIA, the resignations of Beier and Council member Mark Meadows on July 14 undoubtedly changed the dynamic of relations between the City and the developers. 

Also in July the issue of refinancing the bond used to cover roughly $25M of the construction came up. Currently, there’s a payment due to the bondholder (a company owned by Mark Bell’s father) on Dec. 1, 2020, and not enough money saved from the Tax Increment Financing system to cover it. Per the agreements, the developers are to pay for any shortfall in the bond trust.

Aug. 5, 2020: Bell and Willobee meet with Mayor Aaron Stephens at Newman Lofts to discuss removing the 55+ plus restriction. A day after the meeting Bell emailed Stephens.

“Regarding our issue, I trust that you’ll make the right decision for the East Lansing community, which is all I can ask for,” Bell wrote to Stephens. “Steve and I will plan to follow up shortly on the matter. Leadership is needed most in these most unfortunate, pandemic times. To that end, I thank you for your leadership and service as a public official.”

Mayor Pro Tem Jessy Gregg also met with the developers, separately, to discuss their request.

Aron Sousa for ELi

The Landmark, part of the Center City Development, seen from Michigan State University’s campus.

Aug. 23, 2020: Stephens emails Lahanas to get Harbor Bay’s project on the agenda for Council’s soonest discussion-only meeting, which is set for Sept. 15, 2020.

It later became clear that neither Bell nor Willobee followed up with Stephens and that Stephens didn’t inform them at the time he was placing the item on an agenda.

Aug. 27, 2020: Harbor Bay holds a press conference lambasting East Lansing’s Covid-19 response and demanding a permanent removal of the 55+ restrictions on Newman Lofts. They sent a letter, written by the Milwaukee-based law firm Foley & Lardner, to City Council outlining the same. 

“If the City Council will not engage in good faith efforts to resolve this impasse by removing the age-based housing restriction by September 30, 2020, HB BM will resort to appropriate legal action,” the letter reads, in part.

Sept. 15, 2020: At the discussion-only meeting, Council, Bell and Willobee discussed the issue at hand. 

Ultimately, Council was not receptive at all to removing the restrictions after Bell and Willobee failed to make a compelling case. (Council is under no legal obligation to change the restriction, it’s worth noting.)

However, after a tip from a Newman Lofts resident earlier in the meeting, Willobee was asked if Harbor Bay was illegally renting to residents under age 55 at Newman Lofts. He confirmed they were

Sept. 21, 2020: The City issues Harbor Bay a notice of default on the Master Ground Lease for violations of the Zoning Code.

It gave them 60 days to remedy the issue. 

November 2020: Theoretically, by the end of November, the four units being rented to people under age 55 at Newman Lofts should be vacated by those people.

If not, the City is empowered to continue taking action against the developers like writing tickets for each individual violation (which would be each day each unit was rented illegally) or, as an extreme option, revoking an occupancy permit, or terminating the ground lease gives the developer rights to the airspace in which Newman Lofts was constructed.

Correction: This story was updated to say that Foley & Lardner is based in Milwaukee and not Detroit.

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