The Center City District developers have been saying that they need the 55+ age restriction on Newman Lofts lifted specifically because the Covid-19 pandemic has made that restriction untenable.
Repeating the developers’ party line, Harbor Bay’s Vice President of Government Affairs, Steve Willobee, told City Council on Sept. 15 that Covid-19 is scaring seniors away from senior housing.
Willobee told Council members in no uncertain terms that the problem was not the developers’ failure to market the apartments well, nor that the rents are too high, nor the lack of universal design (accessibility) features in the apartments. Covid is to blame for only 25 of the 91 units being rented.
But Mark Meadows, who was East Lansing’s mayor when the deal was made, tells ELi that Harbor Bay’s attempts to get out of the age restriction started a full year before the pandemic – months before the building opened in Sept. 2019.
In an interview with ELi late last week, Meadows recalled a phone call that he had with Willobee in Spring 2019.
“Steve Willobee called me to ask if I thought the city would be willing to massage its requirement,” Meadows said, explaining further that “the gist of that conversation was ‘We would like to change the requirement so that we could be allowed to rent the units to someone under the age of 55.”
“And my reaction at that time was that I will absolutely never agree to that.”
Meadows said he believes Harbor Bay’s reps called to ask the same thing of then-Council member Ruth Beier, “and my memory of my conversation with Ruth was that she told them exactly the same thing. I had a conversation with George [Lahanas, the City Manager] about this at that point in time, just to inform him that I’d had the conversation with Steve Willobee.”
Recalled Meadows, “I had told Steve Willobee there’s not a ghost’s chance in hell that I will ever agree to that.”
The City has issued violation notices
City Manager George Lahanas announced at City Council this Tuesday that, earlier that day, the City issued Harbor Bay notices for the zoning code violation and violation of the ground lease that allowed the developers’ use of public land for the construction of Newman Lofts.
Said Lahanas to Council, “We will be awaiting their compliance. I would also say, because this issue has come up pretty recently, I’ve been involved in this project since its infancy. I think it’s a great and exciting project and it’s come out very well. I think the project should stay 55+. That’s how it was envisioned, that’s how it was shown to the residents of East Lansing. And that’s what all of the participants, including the City, bargained for.”
Harbor Bay has now been given 60 days by the City to correct the problems.
That means Harbor Bay has 60 days to move the under-age-55 occupants out of the four apartments they are currently occupying.
Developers agreed to restriction when they got the right to lease public land
The 55+ age restriction on Newman Lofts stems from East Lansing’s Ordinance 1384, City Council’s attempt to diversify the demographics of downtown residents. That zoning law requires that 25 percent of housing units in new big downtown redevelopments be restricted to (a) owner-occupied condo apartments or (b) lower-income renters or (c) seniors aged 55+.
In 2017, as the Center City District deal was being struck, Harbor Bay opted for the third choice, claiming they had proprietary market research to support their decision to pair Newman Lofts with The Landmark, a student-focused apartment building on Grand River Ave. built on land owned by the Balleins.
The approved site plan, Special Use Permit (SUP), and Master Ground Lease for the Center City development all codify the age restriction on Newman Lofts.
The ground lease – a legal agreement made between the City and the developers – is what allowed the developers to build and own Newman Lofts, because Newman Lofts is built over public land. Violation of Ordinance 1384, according to Meadows, constitutes a clear violation of the ground lease.
If the developers don’t “cure” the “defect” of the illegal rentals, the City can terminate the lease of the air space above the public land.
In our recent interview, Meadows told ELi that the violation of the law and agreements is “cut and dry” and that “it’s important that the city react to this pretty rapidly.”
Meadows, a lawyer, also responded specifically to Willobee’s claim that the Federal Housing for Older Persons Act (HOPA) allows the developers to rent up to 20 percent of Newman Lofts to people under age 55.
Says Meadows, the rule Willobee cited is a minimum requirement and does not negate East Lansing’s law and agreements which indicate that all the Newman Lofts units must be rented to people over 55.
“No one of those documents is contrary to any provision in any other part of the documents. Consistent, all the way through,” Meadows said.
Meadows added, “not only are they in violation of the documents that they executed, not only are they in violation of the SUP [Special Use Permit] that was issued, they’re in violation of federal law because they can’t possibly rent to these individuals [under age 55] without violating the age verification requirements of the federal law.”
Says Meadows, if Harbor Bay remains in violation of the zoning code, the City could begin writing tickets and charging one count of a misdemeanor for each day each apartment is illegally rented. The misdemeanors are punishable with fines or up to 90 days in jail.
But if the developers fail to fix the problem and the City moves to terminate the public land lease, that could be a much bigger problem for Harbor Bay and the Balleins.
This week’s packet of communications to Council includes letters in support of Harbor Bay from people with financial interests in the project. It also includes a new round of letters criticizing Harbor Bay from residents of Newman Lofts along with other citizens. (View them here.)
UPDATE: The City has now posted the letter to Harbor Bay’s Mark Bell. See it here.
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